Blazing File Folders
Bill Perschetti was typing a letter when he found himself looking down the barrel of a gun.
The office manager of Summerville and Associates had heard the front doors of the offices crash open, and someone yelling, "Police! Police!" He thought it was just a joke. Then he looked up and saw a six-foot-tall man wearing jeans and a bulletproof vest, aiming at his head.
"Step away from the computer," the man, who turned out to be a cop, told him.
"I thought it was just somebody screwing around," Perschetti says. "The furthest thing I could imagine was a police raid until I saw a .9 mm pointed at my head. Then I was praying it was a police officer."
Perschetti doesn't generally get a lot of guns pointed at him. Summerville and Associates is a Chandler insurance subrogation agency, in essence a collection agency for insurance companies. Most of the time, the only sounds in the office are voices speaking into phones, the tapping of fingers on keyboards.
On Wednesday, April 29, however, the usually quiet office was the scene of a full-scale raid.
Investigators from the state Department of Insurance fraud unit aided by officers from the Department of Public Safety, and the Mesa, Gilbert and Chandler police departments, confiscated hundreds of files and papers, computers, and even pay stubs from one employee's desk.
Perschetti and his three co-workers who were in the office at the time were covered two-to-one by officers with drawn weapons, screaming orders at them, all in search of papers that might prove insurance fraud.
Maria Summerville, the owner of the agency, has filed a motion to have her files returned and the search warrant thrown out.
"You don't go bursting into an insurance office in the Valley National Bank building like they're going to kill you," Larry Debus, an attorney for Summerville, says. "If you're on East Van Buren doing a drug bust, that's different. . . . But these guys were just cowboys."
Two months after the raid, Summerville has not been charged with any crime. The Department of Insurance says it has turned the case over to the Attorney General's Office, which says it is still reviewing the facts.
But the path that brought the police to the door of an insurance agency with guns drawn is a twisted one.
The AG's Office and DOI pass the buck when it comes to explaining why the cops came in with guns drawn. They blame it on DPS, which in turn says it was DOI that told the officers Maria Summerville could be violent. Summerville, however, wasn't even in the office at the time of the raid.
Moreover, the search warrant the cops were executing has its roots in a tangle of civil litigation between Summerville and Farmers Insurance, the national insurance company that she used to do some work for. Summerville and her attorneys suspect Farmers instigated criminal charges and the raid in order to get its hands on files it hasn't been able to get through its civil lawsuit. Farmers' attorneys won't comment on that theory.
Now, the AG's Office appears to be backing down, returning some of the papers to Summerville. And the severity of the raid raises the question: Should the Department of Insurance be acting like gangbusters?
Standard procedure doesn't require the kind of entrance the police officers made at the Summerville insurance agency; whether to go in with guns drawn is a judgment call, made on a case-by-case basis.
In fact, the officer in charge of the raid says it's the first time he's drawn his weapon while serving a Department of Insurance search warrant. The AG's Office and DOI can't offer another example of when guns have been out while serving a fraud warrant.
"This is the most outrageous thing I've ever seen as a lawyer, and it frightens the hell out of me," Carol Cure, Summerville's civil attorney, says.
But finding out why the call was made to bust into an office with guns out isn't easy. The agencies responsible for the raid blame each other for the decision.
Summerville and Cure met with James Norwood, the DOI's lead investigator on the case, and Nicholas Cornelius, the assistant attorney general assigned to the case, after the search warrant was served. When she asked why the police came in with guns drawn, she says Cornelius blamed it on DPS.
"I asked him, why the guns? He just said, 'That wasn't us,'" Summerville says. (Cornelius confirms that he said this.)
That's the standard answer for everyone involved. Cornelius says it was up to DPS. Terry Cooper, chief of the fraud unit for DOI, says the same thing.
"The only person that can answer [for the decision to draw weapons] is DPS," Cooper says. "I would assume they have great reasons to do what they did. Usually, when you go in with guns drawn, you believe that there's some threat to the lives of the officers."
DPS Sergeant Ramon Figueroa, who was in charge of the raid, said he decided his team should unholster their weapons because Norwood, the DOI investigator, told them that Maria Summerville had a history of violence and access to weapons.
Both Cornelius of the AG's Office and Cooper of DOI say that's not so.
But Figueroa insists that's what he was told by Norwood, the DOI investigator who went along on the raid. Norwood is on vacation and couldn't be reached for comment.
Figueroa never saw any reports or paperwork on the earlier arrest; he took Norwood's word for it, he says.
The arrest Norwood was apparently referring to dates back to 1992, when Summerville was accused of waving a gun at an ex-boyfriend in a domestic dispute. Summerville told a probation officer at the time that she took her ex's gun and dropped it, causing it to accidentally discharge.
She later pleaded no contest to endangerment, a misdemeanor which is considered "non-dangerous," and was released from her probation early.
For Figueroa, it just came down to a safety call, based on what he knew at the time.
"What's the difference between white-collar crime and any other crime? They can kill you just as dead as anybody else," he says. "I'd rather be justifying like I am right now going in with weapons drawn than going in with weapons holstered and having a dead officer on my hands."
But, as it turned out, Summerville wasn't even there when the warrant was served. The precautions the officers took for her were wasted on the four agency employees present at the time of the raid.
While Perschetti was in his office typing, Chris Werner, Maggie Pinckard and Shannon Zook were all standing together in an office off the lobby, reviewing a file. Then the door burst open. The officers pointed guns at them and began screaming orders.
"They came in like a swarm," Werner says. "They came in like it was a crack raid."
Pinckard says she immediately feared for her safety. "The only thing I could think of was, am I going to get out of here okay?"
As the employees were herded into the lobby of the office, the officers began asking where Maria Summerville was. They didn't know, and were separated for questioning by Norwood.
While the fraud investigators searched the office, Norwood and another investigator--a woman the employees couldn't name--questioned them.
They were eventually released by the officers. But, they say, they were allowed to leave only after Maggie Pinckard demanded to know if she was under arrest. She says that when she was told she wasn't, she began walking out and called to the others that they didn't have to stay, either.
Summerville and her attorney arrived soon after, and the search went on until about 4:30 p.m.
But the experience still lingers in the minds of Summerville's employees.
"I'm not ashamed to admit that I went home and cried that night," Werner says. "I'm a newlywed. I have a family to provide for. I just kept thinking, what if something had happened?"
Perschetti says he now feels like he's being watched. Pinckard reports being afraid even when she's at home. The other people in their building look at them strangely now, they say.
And every time someone comes to the door of the office now, everyone pauses, for just a moment, until they know who is there. When they come back from lunch, they call out to one another, just so there are no surprises.
"I just kept thinking, it's an office. It's a business," Werner says. "It's not a meth lab."
The raid on the Summerville agency is just the latest tangle in the long history of civil litigation between Summerville and a former employer.
The warrant that sparked the raid on Summerville's business came about with the help of a local heavy hitter, former U.S. attorney Melvin McDonald, who was hired by Farmers Insurance to help in its case against Summerville.
McDonald went to DOI and the AG's Office on behalf of Farmers Insurance in April. McDonald and another attorney from Farmers, according to court records, laid out their case against Summerville to Norwood.
Over the last few years, Farmers and Maria Summerville have been immersed in a dispute over collection work she did for the company, starting in 1994.
Summerville is mainly in the business of collecting debts owed to insurance companies, mostly by uninsured motorists. She generally gets 25 percent of what she collects.
In 1995, Summerville and Associates was fired by the insurer.
Farmers sued Summerville in 1996, claiming that she did not return the money from collection files to the company. Summerville countered that she only withheld funds from Farmers because she hadn't been paid by the company for her work.
In a deposition, Summerville said that when Farmers fired her, she purged all of the company's files from her computer. After that, many of the hard copies of her records were stolen from her office in a burglary, she said.
But earlier this year, the company found two former employees of Summerville's who testified that she still had collection files belonging to the company. McDonald presented the affidavits to Norwood, as well as other material from the civil case. Norwood later interviewed the two in person, and gathered information from other insurance companies about Summerville as well, according to court records. Then he got his warrant.
McDonald acknowledges that it's unusual for him to represent an insurance company. But his firm does insurance work, and when Farmers needed advice on how to proceed with possible criminal accusations against Summerville, the company came to him because he is a criminal lawyer, he says.
This isn't the first time a major insurance company has leveled charges at Summerville. DOI's Terry Cooper says Travelers Insurance made a similar complaint last year. But, he concedes, the department didn't do anything about it.
Summerville and her attorneys say the two ex-employees, Brian Jones and Brian Fink, are simply disgruntled and looking for a way to get even for being fired.
Jones could not be reached for comment for this article. Fink declined to comment.
Summerville and her lawyers say that the search warrant was a way for Farmers Insurance to look for records she's already sworn she doesn't have.
McDonald and another attorney for Farmers won't comment about Summerville's charge that the search warrant was an attempt to sidestep the civil process.
But McDonald will say that neither he nor Farmers ever gave Norwood any information that would lead him to believe Summerville or anyone in her office was dangerous.
"Absolutely not," he says. McDonald says he found "nothing that suggested to me that she was anything but just another person."
McDonald has had clients who were served search warrants with weapons drawn despite the nonviolent nature of the offense.
"I had the same type of reaction . . . which is, this is completely unnecessary. They were strictly criminal fraud cases, and they [the police] went in the same way," he says. "They scared the living pizzazz out of some people."
The AG's Office says DOI has to use DPS to serve a warrant, because, by law, the fraud unit's investigators can't do it themselves.
However, Representative Wes Marsh, a Republican legislator from Scottsdale, introduced a bill last session that would have changed that. Marsh's bill would have allowed the fraud unit's investigators to become certified peace officers and carry weapons.
The bill failed, but Summerville's attorney, Larry Debus, fired off a letter to Marsh about the incident at the agency.
"This is a perfect example of why we should not authorize anyone but real police officers to carry guns," he wrote. "I understand that a lot of these agencies want to get certification. These are cowboys that want to play policeman and it is not that type of profession."
In his letter, Debus points out that overzealous officers can cost government agencies big bucks in civil judgments. And they can also cost the state criminal convictions as well.
Debus cites a case he won last year, Arizona v. Jon Charles Campbell. Campbell was charged with resisting arrest after plainclothes investigators from the AG's Office broke up a meeting in a private home on the suspicion that he was promoting a pyramid scheme. Campbell was never charged with any other crime. And before the case could get to the jury, the judge dropped the charges, based on the tactics of the arresting officer, including not properly identifying himself as a cop.
"I was so shocked by a number of things in this case," Judge Michael Wilkinson said in court. "I am shocked that the Attorney General's Office believes that this was proper police work. . . . I intend to write a letter to Attorney General Woods to make sure that this position is not part of the standard issue for special agents, because this is clearly improper based on the information you had beforehand and based on the Constitution of the United States."
The AG's Office appears to be backing off Summerville now, at least in part. It's released some files back to her--after several demands from her attorneys--and said, in a letter to Debus, "because of how your client maintained her files, some items beyond the scope of the warrant may have been seized."
A hearing is set for the end of July on Summerville's motion to have the search warrant thrown out and all of her property returned.
And Summerville is still waiting to find out if she's going to get her business back, or if she's going to be charged as a criminal.
Maria Summerville sits, a small woman behind the large, polished desk, and tries to explain how her life has fallen apart.
The search warrant against her suggests an unethical collection agent who steals money intended for her clients. And she already has several civil judgments against her for keeping money that she should have passed on to other companies.
But in person, she presents a different picture. A single mom, she started her business so that she could be there for her kids and provide for them, too. The stress of the past several months shows, despite the makeup and the nice clothes. There are dark circles under her eyes, and she hunches down, almost as if she's shrinking into herself.
No one can dispute that she's made some seriously bad decisions--the multiple judgments against her are testament enough to that--but she insists she's done nothing criminal.
Summerville says she got in over her head when she moved into her current offices. She went from a two-person operation to a 24-employee office in anticipation of a big contract with a major insurance company. When it fell through, Summerville says, she was without the money to sustain her new operations. She says she's paid off the judgments against her.
"I was using the funds we collected," Summerville says. "I know it was wrong, but I was trying to keep this thing going."
Summerville says she thought she was digging her way out of the financial hole she was in. Then the fraud unit arrived, and now she doesn't see any way back to a normal life. With files confiscated by the AG's Office, and investigators calling her clients, telling them she's accused of criminal fraud, she doesn't know how she's going to stay in business. She's down to three employees now, and she's wondering how she's going to keep paying them.
"Seven years into this, I thought that it was getting a little more stable. Instead, there's nothing left," she says.
Summerville insists that the investigators will find nothing in the files that were taken; she says that the Farmers files contain only cover sheets, and none of her employees were allowed to do Farmers work, because of the ongoing litigation. "They knew that anyone who did that would get terminated," she says.
She hopes it's going to end soon. "I pray every day they say, 'This is a big mistake,'" she says. But she's not optimistic. "I think that they have to indict me now, they've made such a big deal of this."
Contact Chris Farnsworth at his online address: email@example.com
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