Root Inc’s former chief marketing officer – accused in a lawsuit by the company of syphoning $10 million from it – was ordered detained for contempt of court, and he will need to find another way to pay his attorneys.
Brinson Caleb “BC” Silver, Root’s CMO from November 8, 2021 to November 9, 2022, was ordered detained June 20 by U.S. District Court Judge Sarah D. Morrison in the Southern District of Ohio “until he produced information and documentation to the satisfaction” to a receiver – a custodian for Silver’s personal property, monetary, and real property assets.
Earlier this month Morrison granted a motion from Root Inc., parent company of Root Insurance, to appoint a receiver. The motion was filed by Root once it was found that Silver was trying to sell one of the properties and was spending “lavishly.”
Related: Fired Root CMO Accused of Stealing Millions Spends ‘Lavishly’; Judge Appoints Receiver
Root accused Silver and others in amended lawsuit filed in February of defrauded the insurtech of at least $9.9 million.
According to Morrison’s order, Silver has “not turned over all books and records, sums, and other information to the receiver” as ordered in May.
Morrison also denied a motion filed by Silver and his companies to modify an injunction and the receivership in order to pay attorney fees. A previous temporary restraining order allows Silver to spend up to $5,000 on day-to-day personal living expenses. Silver had asked the court for authorization to pay attorneys from the receivership estate in excess of his allowances due to the “‘complex’ nature of this litigation and its potential criminal implications.”
Morrison shot back and said the requests for information and documentation to the receiver is “decidedly not complex” and Silver has “refused to respond in good faith to some of the most basic and non-controversial of the receiver’s requests.” Citing court precedent that a criminal defendant has no right to access proceeds of alleged fraud even for counsel of choice, Morrison on June 21 denied Silver’s motion.
This article was originally published by Insurance Journal. Reporter Chad Hemenway is the National Editor of Insurance Journal.