Prison part of plea deal in Camano fraud case

SEATTLE - The last in a group of Camano Island grifters who diverted millions in insurance premiums into speculative business investments has pleaded guilty to three counts of tax fraud.

As part of a plea deal, Steven Harmon agreed to serve a prison term of between one and 1 1/2 years. Harmon was the business partner of his father, Philip Harmon, who induced 25 groups linked to Quaker institutions to pay $21 million for health-insurance coverage that didn't exist.

When the scheme collapsed in 1996, hundreds found themselves without health coverage.

Assistant U.S. Attorney Jeff Coopersmith said Steve Harmon has agreed he owes the Internal Revenue Service $105,000, not including interest and penalties.

Philip Harmon is serving eight years in prison and has been ordered to pay $23 million in restitution. Others involved were partner Terry Beebe; accountant Mike Cheesman and bookkeeper Diana Young. All served terms ranging from a few months to a year.