National Union Fire Insurance Company of Pittsburgh, Pa., is suing to claw back more than $465,000 after paying out on a massive employee theft at AAA Club Alliance Inc.
National Union Fire Insurance Company of Pittsburgh, Pa., as subrogee of AAA Club Alliance Inc., has filed a civil complaint in the United States District Court for the Northern District of Ohio, targeting former AAA travel agent Michelle Ireland. The insurer alleges that Ireland, while employed at AAA’s Port Clinton, Ohio, location, orchestrated a scheme from 2019 through May 12, 2023, to collect cash payments from AAA customers for travel and vacations and retain those funds for her own personal benefit. To conceal her theft, Ireland used payments from other customers to fund the travel and vacation expenses of the customers from whom she stole, in a Ponzi scheme-like manner. She also issued unauthorized and unapproved AAA gift certificates and used them for the same purpose.
The losses were significant. AAA Club Alliance Inc. was left with a loss of $515,695.41 as a result of Ireland’s actions. On May 12, 2023, AAA discovered the theft and reported Ireland to law enforcement. Ireland was criminally charged in the Court of Common Pleas of Ottawa County (Case No. 24 CR 118) and pleaded guilty. AAA reimbursed its customers who paid for travel and vacation expenses but did not receive what they paid for due to Ireland’s theft.
National Union issued an insurance policy to AAA in which it agreed to insure AAA for losses sustained due to employee dishonesty. Pursuant to the policy, National Union indemnified AAA for the losses it sustained as a result of Ireland’s conduct and became subrogated to AAA’s rights. Ireland has paid $50,000 in criminal restitution, but a principal balance of $465,695.41 remains due and owing.
National Union’s complaint seeks compensatory damages of $465,695.41, punitive damages, interest, costs, and all further relief the court determines to be appropriate. The complaint asserts claims for conversion, fraud, breach of fiduciary duty, and unjust enrichment, and states that Ireland’s actions were wanton, wilful, and committed with actual malice.
The case underscores the importance of employee dishonesty coverage for businesses and the insurer’s right to pursue recovery from wrongdoers after indemnifying the insured.
No decision has been made, and all allegations remain allegations at this stage.
