Owner of insurance company in Rosebud County sentenced to more than four years in prison for defrauding customers

BILLINGS — A Forsyth businesswoman who admitted defrauding customers through her company, Rosebud County Insurance Inc., by spending their payments for insurance for her own personal expenses was sentenced today to four years and three months in prison, to be followed by three years of supervised release, and ordered to pay $155,436 restitution, U.S. Attorney Jesse Laslovich said.

Kileen Moria Hagadone, 57, pleaded guilty in August 2023 to wire fraud and aggravated identity theft.

U.S. District Judge Susan P. Watters presided. The court allowed Hagadone to self-report to the U.S. Bureau of Prisons.

 “When we pay our insurance premiums, we expect to have coverage when we need it.  Here, Hagadone’s clients, including a community college, logically thought they had coverage because they paid for it. But Hagadone did not just cheat them of coverage, she stole their hard-earned money and spent it for her own personal use. The good news is she did not get away with it, and the only reason she didn’t is because of the diligent and collaborative work of the office of the Montana State Auditor, FBI, and Rosebud County Sheriff’s Office in investigating this case,” U.S. Attorney Laslovich said.

“This is a shining example of inter-agency cooperation. In this case the Commissioner of Securities & Insurance (CSI) for Montana and the U.S. Attorney’s office on the federal side. CSI opened this investigation and worked closely with our federal counterparts to bring this to an appropriate and just conclusion. Ms. Hagadone was licensed with our agency in a position of trust. She breached that trust and put her clients in harm’s way. We are pleased to see justice for the victims and consequences to Ms. Hagadone,” said State Auditor and Commissioner of Securities and Insurance Troy Downing.

The government alleged in court documents that Hagadone’s company, Rosebud County Insurance Inc., was an insurance brokerage business that acted as an intermediary between customers and national insurance companies. Hagadone was to negotiate insurance contracts for her customers and then receive and transmit customer’s payments to the companies for the policies. Hagadone received clients’ premium payments but failed to send the money to the insurance companies, resulting in her customers not being insured. Instead, Hagadone repeatedly lied to her clients and embezzled the money for personal expenses. The scheme ran from about 2020 until April 2023.

The government further alleged that one of the victims was the Chief Dull Knife College of Lame Deer, which paid Hagadone $91,883 in 2021 for a whole year of insurance coverage. Hagadone was supposed to send the money to the insurance company. Instead, Hagadone kept the money and set up a fraudulent premium finance agreement by falsely impersonating an employee of the college. This allowed Hagadone to pay for the college’s insurance premium in installments, but she failed to make the installments and the college’s insurance was canceled in April 2022.  Hagadone concealed this cancelation from the college. Hagadone continued the scheme and in November 2022, she created a fictitious insurance policy for the college. She charged the college $98,893, which it paid. Hagadone stole the money and spent it. As a result, the college was unknowingly without insurance from about April 2022 until April 2023.

The government further alleged that Hagadone cheated and lied to other customers in a similar way, although the amounts paid were typically smaller.

Assistant U.S. Attorney Colin M. Rubich prosecuted the case. The Montana State Auditor, Commissioner of Securities and Insurance, FBI and Rosebud County Sheriff’s Office conducted the investigation.

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