The Sons Of Norway Sues Agent Over Scam -- More Than 150 People Bilked Of Millions

An insurance agent is being sued for bilking his clients of nearly $7 million in order to support his habit of gambling on horse racing.

A lawsuit has been filed by The Sons of Norway against Mike Calozza, former regional manager for the fraternal group's Bellevue office. The Sons of Norway, with more than 74,000 members, contends that Calozza stole money from 150 people, most of them in Washington state.

Calozza was to return to Seattle today from the group's Minneapolis headquarters, where he's been met with auditors who are sorting through the extent of the scheme.

The lion's share of the alleged fraud did not affect the group's holdings, just those of individuals who invested with Calozza.

"He's been totally open and candid with them," said Calozza's lawyer, Richard Hansen. "Mike is staying around trying to work on this problem and trying to work with everybody affected."

Calozza's home just outside of Snohomish has been placed on the market for $2.2 million. The eight-bedroom home is on 5 acres and has tennis and basketball courts, a swimming pool and a four-car garage.

Other than several cars and some home furnishings, Calozza has no other assets. "He doesn't have bank accounts, or stocks of any substance that I'm aware of," Hansen said.

Calozza was a leading salesman for 10 years. He had loads of charisma, was a good conversationalist and had a thorough understanding of the insurance industry, say those who know him.

"I think the word I've heard more than anything else is shock," said Ronald Christman, The Sons of Norway's chief marketing officer. "Mike was extremely well-known, and had an excellent reputation. Everybody who knew him liked him."

Calozza was caught during a routine audit.

He showed clients a letter, purportedly from a company executive, but forged by Calozza, saying the group gave only him access to invest in a special high-interest, tax-free fund. Such a fund did not exist.

Over an eight-year period, the salesman encouraged others to give him money in return for a promissory note. Some, he paid back with interest. But others let their investment sit, thinking they'd be paid off some day.

About six months ago, he is alleged to have begun another scheme: forging signatures to cash policyholders' checks amounting to several hundred thousand dollars. It was this second venture that led auditors to Calozza.

"The scam was well concealed for several years because part of the scam was Mike told people he wasn't allowed to do this," Christman said. "And that he could help them make money, but they'd have to keep it quiet."