ST. JOSEPH — A former insurance salesman who police and prosecutors allege defrauded several customers was arraigned in Berrien County Trial Court Tuesday and remains free on a $20,000 cash bond.

Judge Sterling Schrock told Kevin Donnellan, 62, of Stevensville, that he is to be on GPS tether and is not to handle any money that belongs to another person while he awaits his next court date. Donnellan asked for a court-appointed attorney, telling the judge he makes an average of $565 a week working at a local Holiday Inn. His insurance business, which was Donnellan Insurance on Ship Street in St. Joseph, has closed.

Schrock granted Donnellan’s request for a court-appointed lawyer but noted, “I’m hesitant because you were able to post a $20,000 bond.”

Donnellan is charged with one count of common law fraud, a 10-year felony; and 12 counts of insurance fraud, a 4-year felony, each involving a different customer. He is alleged to have committed the fraud between Jan. 1, 2018, and July 19, 2019. He was in business for more than 30 years and sold policies out of his office for several different insurance companies.

Detective Adam Herbert with the St. Joseph Department of Public Safety and Berrien County Prosecutor Michael Sepic say there may be more victims. 

Herbert said the case came to light in July after a woman who had been involved in a car accident was notified that she was being sued for damages by Progressive Insurance, the other driver’s insurance company, but also by her own company. When she looked into the allegations in the lawsuit, she found that her own car insurance policy had been canceled earlier for lack of payment. The woman called police, who began an investigation.

Herbert said Donnellan is alleged to have taken money from customers to set up insurance policies, then failed to turn the money over to the insurance companies. The policies would eventually be cancelled due to lack of payment. Herbert said police believe Donnellan gave false addresses and phone numbers for clients when setting up insurance policies, so they did not receive notifications that payments had not been received and their policies were canceled.

Herbert said the policies involved were mostly car insurance, but there were some home insurance policies involved. 

“So if your house burned down, you’d be out of luck,” he said. 

He said in a few of the alleged cases, Donnellan would pay for damages to a customer’s car out of his own pocket when they approached him about their insurance. 

“So it appears it was cyclical. Sometimes he had money. Sometimes he needed money,” Herbert said.

Contact: jswidwa@TheHP.com, 932-0359, Twitter: @HPSwidwa