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August 1999 Vol. 25, No. 8   RSS Feed for Undercurrent Issues
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Don’t Even Think About it

from the August, 1999 issue of Undercurrent   Subscribe Now

On August 8, 1998, searchers in boats and helicopters combed the Florida Keys for missing scuba diver Kerry Steven Scheele, 28, who was out on a boat with his father and fiancée. He was diving in 10 feet of water a quarter mile off the ocean side of Bahai Honda Bridge when he failed to resurface around 8 p.m.

The boaters called for help, telling rescuers he was last seen 45 minutes earlier. The search continued for several days until they finally called it off without a trace of Scheele. Several newspapers reported the man missing and presumed dead.

Little did they know that he had swum underwater to Big Pine Key, ditched his diving gear in the mangroves, caught busses until he ran out of money, then hitched a ride to his girlfriend’s place in Wisconsin.

Investigators began to wonder about the accident when they discovered he was involved in a messy, ongoing divorce and that three months earlier he had taken out a million dollar life insurance policy from Federal Kemper Assurance Co., naming his girlfriend as the beneficiary. And he had a record: he had been convicted in 1994 of grand theft when he stole $18,000 from customers of his employer, the Piercing Pagoda in Fort Pierce, Florida.

Investigators discovered that his girlfriend left the Keys within days of his reported drowning after making several long-distance phone calls. “They called these numbers and finally located her,” said Florida Insurance Commissioner Bill Nelson. “She helped lead them to the suspect, who admitted he faked his death.” Scheele was arrested in Beloit, Wisconsin, on June 23, charged with insurance application fraud and first- and third-degree grand theft.

According to Scheele’s girlfriend, it’s not that "big a deal." The woman, who identified herself during a phone interview with the Palm Beach Post as Lee Conner, said that even though she was the beneficiary of Scheele’s $1 million insurance policy, she canceled the policy after she heard of his “death” and said she never made a claim.

“I don’t understand how they can get somebody for fraud when they didn’t make a claim,” the girlfriend said from the home she shared with Scheele in Janesville, Wis. “I had canceled the policy right after it happened. I wanted Stephen, not the money. “Too late,” said Bill Kuhn, an Insurance Department investigator, who said the woman’s real name is Bonnie Dion. “She probably did cancel the policy, but the claims process had already begun when his father called the insurance company. So that’s like robbing the bank and then returning, saying, ‘Oh, sorry, here’s your money back.’ It’s after the fact.” Investigators added that Scheele’s father initiated a claim, but there is no evidence he was aware his son was still alive.

Scheele also faces possible lawsuits from the U.S. Coast Guard, the Florida Marine Patrol, and the Monroe County Sheriff’s Office to recover expenses for the search, which are estimated to be about $100,000. Becky Herrin, spokeswoman for the Sheriff’s Office, said “diving to look for bodies isn’t the safest activity. We’re looking at suing him.”

From telephone interviews and reports in the Miami Herald, the Palm Beach Post, PR Newswire, St. Petersburg Times, and Reuters

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