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Pastor confesses to church guitar fraud scheme

A Saylorsburg, Pa., pastor admitted to police that he attempted to make a false insurance claim of more than $363,000 by claiming musical instruments were stolen from his church.

Gibson Les PaulImage by borevagen via Flickr

Kevin Michael Gallagher, 50, pastor at New Covenant World Outreach in Brodheadsville, Pa., admitted that he made the false claims, citing financial and marital issues, according to an affidavit filed by the Northeast Pennsylvania Insurance Fraud and Auto Task Force.

On April 1, 2009, Gallagher contacted Pennsylvania State Police to indicate that three guitars and a keyboard were missing from his second-floor office and that whoever took the items must have known exactly where they were located. The items allegedly stolen included a 1959 Gibson Les Paul guitar, valued at $100,000, and a 1962 Fender Stratocaster guitar, valued at $20,000.

Following the incident, Gallagher contacted Motorists Insurance, which covered his musical equipment, and Selective Insurance, which covered the church. Gallagher attempted to collect $104,370, his policy value, from Motorist, and an additional $258,900 from Selective, but met with hesitation from his own insurer over the true value of the allegedly stolen instruments.

To bolster his claim, Gallagher provided photos and serial numbers for the guitars. He said he did not have receipts for the items, telling police that the original receipt for the Gibson Les Paul was in the case when it was stolen, according to the affidavit.

Police were able to determine that the serial number given by Gallagher to them and to the insurance companies was actually to guitars sold by a guitar shop to a New York millionaire and at no time did Gallagher possess the guitar.

The pastor told police he “fudged the serial number” and claimed he misrepresented information to officials due to financial difficulties and marital problems, adding that his actions would likely result in divorce.

In a later interview with state police, Gallagher admitted the Gibson Les Paul was manufactured in the mid-1970s and not 1959, despite his claims to police and Motorists Insurance, the affidavit states. The later manufacture date would make it less valuable. He admitted to providing a false report to Pennsylvania State Police as well as Motorists, claiming sole responsibility for his actions.

Neither Motorists or Selective paid out claims to Gallagher.

He faces charges of insurance fraud and theft by deception for his actions, according to the affidavit.