Faked Drowning Leaves N.J. Man All Wet; Scheme Involved Collecting on Life Policy

A Tinton Falls, New Jersey man was sentenced to 60 months in federal prison recently for his conviction on charges of conspiracy and false distress in connection with his and his wife’s scheme in which they reported his fake drowning at a Long Branch beach for the purpose of collecting on a $1 million life insurance policy, U.S. Attorney Christopher Christie announced.

U.S. District Judge Garrett E. Brown, Jr., who presided over the eight-day trial, also ordered Derek Nicholson, 31, a/k/a “Jacob Milsner,”a/k/a “Michael Way,” and “Anthony Jackson” to pay $5,000 in fines and $24,945 in restitution, which has been paid, and ordered him to serve three years of supervised release upon the completion of his prison sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all of that time. Nicholson has been held in federal detention since prior to the beginning of the trial.

On Dec.1, 2004, the jury returned guilty verdicts on both counts of the two-count Indictment charging Nicholson and his wife, Nikole Nagle, 26, a/k/a “Nikole Nicholson.” The Indictment, which was returned on Aug. 19, 2004, charged both defendants with one count of conspiracy to defraud State Farm Life Insurance Company and one count of false distress.

During the trial, jurors heard testimony from 18 government witnesses and reviewed evidence that reportedly detailed a scheme whereby Nicholson and Nagle attempted to collect on a $1 million life insurance policy covering Nicholson after falsely claiming that he had disappeared while swimming at the New Jersey beach.

In convicting the defendants, the jury found that on June 11, 2003, Nicholson applied for a $3 million life insurance policy naming Nagle as the beneficiary. Nicholson then obtained two prepaid cellular telephones in the fictitious names of “Jacob Milsner” and “Michael Way.”

During the trial, testimony and evidence were presented that reportedly showed on July 24, after State Farm issued a $1 million life insurance policy, Nicholson used the Milsner telephone to make travel arrangements aboard Amtrak to California in the name of “Anthony Jackson.” Two days later, on July 26, Nicholson and Nagle traveled to a beach located in Long Branch in order to stage Nicholson’s disappearance.

While at the beach, Nagle falsely reported to a lifeguard, and subsequently to law enforcement, that Nicholson had disappeared while swimming in the ocean. That same day, Nicholson, using the train tickets that he had obtained in the name of “Anthony Jackson,” reportedly boarded an Amtrak train to California.

On Aug. 1, Nagle made a false claim for the proceeds of the life insurance policy to a representative of State Farm. At that time, the representative informed Nagle that without Nicholson’s body it might take years to settle the claim for benefits. The next day, Nicholson used the “Milsner” cellular telephone, while in Illinois, to call the Sea Bright Police Department and falsely reported the sighting of a body in the ocean that matched his own physical description, according to testimony and phone records introduced as evidence.

The defendants were arrested on May 12, 2004, after the government obtained criminal complaints and warrants.