Ex-Louisiana Citizens Chief Charged With Theft, Fraud

The former chief of Louisiana’s state-backed insurance company was booked on 14 counts of theft and released from custody on bond, as he prepares to fight allegations that he fraudulently spent about $30,000 of the firm’s money for personal travel and entertainment.

State District Judge Don Johnson set the $50,000 bond in a private meeting with Terry Lisotta, his lawyer and prosecutors from the state Attorney General’s office. Lisotta was then booked, processed and released from the East Baton Rouge Parish prison, said his lawyer, David Courcelle.

David Caldwell, head of the attorney general’s public corruption division, said he didn’t consider Lisotta a flight risk.

“I don’t think he’s going to run, but I do think he’s going to have to face the music. And I think he knows that,” Caldwell said.

Lisotta’s arraignment has not been scheduled, but Caldwell and Courcelle agreed it won’t happen until January 2009.

Lisotta faces 14 criminal counts, all stemming from an investigation by the Legislative Auditor’s Office that questioned $106,000 of Lisotta’s expense reports from 2003-06.

Among other allegations, Lisotta is accused of submitting fictional expense accounts and getting reimbursed $3,321 for insurance conferences he did not attend or did not pay for. One of the criminal counts accuses Lisotta of getting $1,495 in Citizens reimbursements for fees to attend the Property-Casualty Industry’s conference in New York – though investigators say Lisotta, as a guest speaker, wasn’t charged the fee.

Courcelle has said Lisotta is innocent, and his spending occurred with approval and knowledge of the governing boards of Citizens and two other firms he worked for: Louisiana Automobile Insurance Plan, the state’s high-risk auto pool; and the Property Insurance Association of Louisiana, which managed Citizens and LAIP.

“I definitely believe that Mr. Lisotta is being used as a scapegoat,” Courcelle said.

Caldwell said he would consider some form of plea deal for Lisotta, but stressed that any deal would depend on what information Lisotta can provide that implicates others involved.

“Whether other actors were involved … is certainly a concern to us,” Caldwell said.