Root Inc., the parent company of Root Insurance, has followed up its investigation into almost $10 million of unauthorized payments with a lawsuit against its former chief marketing officer.

According to the suit, filed in U.S. District Court for the Southern District of Ohio, Root is accusing Brinson Caleb “BC” Silver and others of a “brazen and sophisticated scheme to defraud Root of at least $9.4 million.”

Silver was InsurTech Root’s CMO from November 8, 2021 to November 9, 2022 when he was let go as part of company-wide layoffs.

The lawsuit alleges Silver (formerly known as Brinson Bernard McDaniel, according to the lawsuit) contacted another man, William Campbell, the CEO of advertising agency Quantasy, “within days of starting his job at Root.” At Silver’s direction, Root paid Quantasy about $1.2 million for services. However, Silver and Campbell then, through texts using WhatsApp, “set up a scheme by which Quantasy would transfer funds to Silver’s company, Collateral Damage,” Root alleges.

Root Investigating at Least $9.5M Unauthorized Payments by Former Employee

Root said it had no knowledge of Collateral Damage or that it was Silver’s business. The lawsuit outlines text messages between Silver and Campbell, as well as a series of invoices and payments between the two men.

Following the first contract, Root said Silver “caused Root” in April 2022 to enter into a second contract with Quantasy valued at $14.7 million. The Campbell and Silver exchanged emails to start putting together another agreement between Quantasy and Collateral Damage, Root alleges. Quantasy allegedly transferred $9.1 million to Silver’s Collateral Damage.

“At no point did Silver disclose his affiliation with Collateral Damage – or Collateral Damage’s existence, much less any work Collateral Damage was purportedly doing for Root or Quantasy – to other members of Root management,” Root said in the lawsuit.

Silver used the money to make various purchases, including expensive residential properties in Miami and Venice, California bought a limited liability company called Eclipse that is also controlled by Silver, Root alleged.

Root said it finance department last year began noticing some “unplanned spending from the marketing department” and started to investigate. Silver and Campbell “issued a series of change orders in an attempt to cover their tracks.”

In July 2022, Quantasy agreed to return $1.2 million to Root, but never disclosed its relationship with Silver or Collateral Damage or that “the $14.7 million was actually not held by Quantasy at all, but had been transferred to Silver’s company months earlier and then spent by Silver on his luxury coastal homes,” according to court documents. When Root’s finance department questioned Campbell about the work it had done for the insurtech, Campbell allegedly continue to lie, said Root.

Root said Silver was sending Campbell text messages related to the company’s communications and audit findings which, at the time, had not uncovered the alleged fraud. Silver wrote to Campbell, “We literally are good. I just need for you to trust me and hold the line.”

The case is Root Inc. v. Brinson Caleb “BC” Silver, U.S. District Court for the Southern District of Ohio, No. 2:23-cv-00512.