Georgia Insurance Commissioner Jim Beck pleads not guilty in federal court

ATLANTA (FOX 5 Atlanta) - Just months after he was elected, Georgia's Insurance Commissioner faces dozens of criminal charges.

On Wednesday, Jim Beck surrendered to authorities.

FOX 5 I-Team's Dale Russell learned that Beck met with an FBI agent, who drove Beck to the federal courthouse about 10:15 a.m. Wednesday.

He then made his first appearance in federal court pleading not guilty to the charges. He will need to post a $25,000 security bond to be released.

Governor Brian Kemp sent a letter to Beck asking him to resign.

RELATED: Gov. Kemp sends letter to Georgia Insurance Commissioner Jim Beck asking for resignation

Beck's surrender and first appearance comes a day after he was indicted by a federal grand jury on 38 counts.

The charges relate to Beck's time as general manager of operations for the Georgia Underwriting Association, or GUA, which was created to provide high-risk property insurance to Georgia homeowners. He was elected by the GUA board of directors and served in that position from January 2012 until he was sworn in as insurance commissioner on Jan. 14th of this year.

MORE: Grand jury indicts Georgia Insurance Commissioner Jim Beck

The indictment says Beck, a Republican, used the money for personal expenses and to fund personal investment, retirement and savings accounts, as well as his statewide election campaign. The indictment also says he used the funds to buy and improve personal rental property and for personal state and federal income taxes.

U.S. Attorney Byung J. "BJay" Pak acknowledged that the alleged crimes preceded Beck's swearing-in as insurance commissioner.

"However, holding a powerful position does not shield you from the sins of your past criminal activities," Pak said at a news conference. "Justice and rule of law will catch up to you eventually."

While serving as general manager of GUA, Beck also had controlling financial interests in two businesses, Creative Consultants and the Georgia Christian Coalition, the indictment says.

Beck persuaded four associates to form four separate businesses with the stated purpose of providing services to GUA, the indictment says. Those companies are named in the indictment only as Company A, B, C, and D.

Beck then used an elaborate fraudulent invoicing system to produce false documents and, in his role as general manager, approved payments from GUA to the four companies, the indictment says. He then sent false invoices from Creative Consultants and The Georgia Christian Coalition to the four companies and directed his four associates to pay the invoices from the funds they'd been paid by GUA, investigators said.

In total, the indictment alleges Beck used the fraudulent schemes to embezzle more than $2 million between 2013 and 2018.

Chris Hacker, special agent in charge of the FBI office in Atlanta, said the investigation began about 10 months ago, before Beck's election as insurance commissioner, and was based on a referral from the Georgia inspector general.

"Evidence established the fact that Beck abused the trust of friends and his employer, GUA, in an elaborate scheme to enrich himself at GUA's expense," Hacker said.

In a news release to FOX 5 Atlanta, Beck’s defense attorneys denied the charges against their client.

“Jim strongly denies these charges, and we intend to mount a vigorous defense," Attorney Bill Thomas said. "Jim is justifiably proud of the work that he did at the Georgia Underwriting Association (“GUA”). Any accusation that he defrauded GUA is false.”

"He acted legally and in good faith. Under his leadership, for the first time in its history, GUA made millions of dollars of profits. Jim looks forward to clearing his good name," Thomas added.

According to the Georgia Constitution, whether Beck is suspended from office while under indictment depends on whether the charges are determined to relate "to the performance or activities" of that office.

Once the governor receives the indictment, he must wait 14 days and then, if he believes the charges relate to Beck's performance of his responsibilities as commissioner, appoint a review commission made up of the attorney general and two other public officials.

The commission would have 14 days to hold a hearing and make a determination. If the commission decided that "the indictment relates to and adversely affects the administration of the office of the indicted public official and that the rights and interests of the public are adversely affected" by that, the governor would suspend him immediately pending the outcome of the case or the expiration of his term, whichever comes first.

The Associated Press contributed to this report.