Insurer’s Probe of Boat Claim Uncovers Evidence Used in Murder Charges

Insurer’s Probe of Boat Claim Uncovers Evidence Used in Murder Charges

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A boat insurance claim denial and fraud investigation have surfaced as integral pieces of the murder case being brought against a 28-year-old Vermont man charged with killing his grandfather and mother for inheritance money.

In addition to facing two murder charges, Nathan Carman is accused of attempting to defraud his insurance company.pastedGraphic.png

Carman is alleged to have shot his grandfather, John Chakalos, in December 2013 in order to access his $550,000 inheritance from the estate of his grandfather, who made millions in real estate.

About three years later, when he was low on funds, Carman arranged for the death of Linda Carman, his own mother and one of Chakalos’s four daughters, according to the indictment filed May 2 in federal court in Vermont.

The indictment alleges Carman killed his mother to gain her inheritance from his grandfather, an amount court documents indicate could be as much as $7 million. He also schemed to fraudulently obtain $85,000 from his boat insurance company, according to the charges brought by the office of U.S. Attorney for Vermont Nikolas P. Kerest,

Carman took his mother on a fishing trip in waters off Rhode Island in a boat named Chicken Pox, a vessel which he admits he had modified prior to the trip in several ways, including removing two forward bulkheads, removing trim tabs from the transom of the hull and improperly repairing several large holes.

After leaving the marina, Carman killed his mother and eventually sank the Chicken Pox, according to the indictment. He turned up alive a week later on a life raft. His mother has never been found.

After he was rescued, prosecutors say he made false statements to the Coast Guard, law enforcement investigating, and others about what happened to his mother and about what occurred on the Chicken Pox.

pastedGraphic.pngInsurance Process

The process surrounding his insurance claim produced key evidence against Carman.

In the language of the U.S. attorney’s indictment, Carman “devised a scheme to defraud and to obtain money from Boat U.S. and the National Liability and Fire Insurance Co. by materially false and fraudulent pretenses, representations, and promises about what occurred between the time the Chicken Pox left the Ram Point Marina and the time Nathan Carman was picked up by the Orient Lucky.”

In 2015, Carman purchased boat insurance for the Chicken Pox through Boat Owners Association of the United States (Boat U.S.), the managing director for National Liability and Fire Insurance Co. Carman’s policy contained an exclusion providing that there was no coverage for “any loss, damage, expense or cost of repair caused directly or indirectly by incomplete, improper, or faulty repair.”

In October 2016, Carman presented an insurance claim for the loss of the sunken Chicken Pox for approximately $85,000, which exceeded the policy limit of $66,200. Carman claimed he never saw or accepted the terms or limit of the policy.

After an investigation of the incident, Boat U.S. denied the claim in January 2017. The insurer maintained that the exclusion applied because Carman performed improper and shoddy repairs and otherwise modified the boat in ways that would cause it to sink. Carman appealed the claim denial.

Boat U.S. also brought a lawsuit in federal court in Rhode Island seeking a declaratory judgment that the insurance company rightfully denied Carman’s claim. The insurer argued that Carman was not entitled to coverage because the loss of his boat was not accidental but was instead caused by his own incomplete, improper, and faulty repairs. The insurer also maintained that Carman breached an implied warranty of seaworthiness because knew his boat was unseaworthy and this condition proximately caused its sinking.

Carman’s Narrative

During the litigation, both in discovery and at trial, Carman maintained his narrative about what happened to his mother and what occurred on the Chicken Pox.

In his narrative, Carman admitted that he discovered the below deck bilge space contained a large amount of water. After discovering the water, he said he asked his mother to reel in the fishing lines and did not have any further conversation with her after that. Minutes after he discovered the water below deck, the boat sank quickly. He admitted he did not activate the boat’s emergency signal or communicate by radio. As a result of the boat sinking, he said he and his mother fell into the ocean and his mother died. He grabbed the emergency life raft on which he survived for approximately one week until he was picked up by a merchant vessel, the Orient Lucky.

During the Rhode Island hearing on the insurance claim, Carman asserted that he did not accept the terms of the policy, including its exclusions, because he never received the binder. However, evidence showed that Carman corresponded with National Liability three months after the policy went into effect seeking to increase the insured value to $85,000 following some upgrades to the boat, including an autopilot, chart plotter, VHF radio, automatic identification system, and a life raft. Carman had also made a claim in April 2016 under the policy for engine damage and National Liability paid him $33,489.

Before issuing the insurance in 2015, National Liability hired a marine surveyor to review the boat’s condition. The inspector found the boat was in good shape and seaworthy.

The evidence further showed that before taking his mother on her last trip, Carman made several changes to the Chicken Pox. He removed the forward bulkheads and the trim tabs. He took off the actuator from the transom, leaving four half-dollar-size holes in the transom. In repairing the large holes, he did not follow the instructions but simply put epoxy into the holes without a backing which meant that the epoxy could get pushed through the holes.

Insurance Claim Ruling

John J. McConnell, Jr., U.S. district court judge in Rhode Island, who heard all the evidence, noted that Carman presented no rebuttal to these facts.

“The removal of the trim tabs and the faulty repairs rendered the boat unseaworthy and in poor condition,” the judge wrote. “Having four holes in the back of a boat lends itself to taking water on. It is more likely than not that this improper repair at least indirectly caused water to fill up the bilge, causing the boat to sink.”

The judge sided with the insurer, holding that the policy exclusion applied because Carman’s property loss was “caused directly or indirectly by incomplete, improper, and faulty repairs.”

Given the exclusion, the insurer had no obligation to pay Carman’s claim, McConnell concluded.

McConnell added a footnote to his civil opinion: “To be clear, the Court is making no determination of whether Mr. Carman intended to sink his boat or to harm his mother. Those allegations are not a part of the counts the Court heard during the trial of this civil case.”

Other Actions

Others, however, have determined that Carman did indeed intentionally sink the boat.

In July 2017, Valerie Santilli, the executor of Chakalos’s estate, filed an action in New Hampshire probate court claiming that Carman killed Chakalos and Linda Carman. That trial was never held because the probate judge found Chakalos was not a legal resident of New Hampshire. It is still on appeal.

On May 10, 2022, the U.S. Attorney Kerest announced that after a multi-year investigation, Carman had been arrested pursuant to an eight-count indictment charging him with the 2016 murder of his mother on the high seas and related frauds to obtain family and insurance funds. The investigation involved the Federal Bureau of Investigation; Coast Guard; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Connecticut State Police, and the police departments of Windsor, Connecticut and the South Kingstown, Rhode Island.

Carman was arraigned May 11, 2022, before Chief U.S. District Judge Geoffrey W. Crawford.

Carman is presumed innocent until and unless proven guilty. Carmen pleaded not guilty last week to all charges. If convicted of murder on the high seas, Carman faces mandatory life imprisonment. The fraud charges each carry a potential penalty of up to 30 years of imprisonment.

Carman remains in custody, after his bail hearing was postponed for at least two months. The Boston Globe reported that lawyers appointed to represent him asked for extra time to conduct their own investigation and interviews.

Top AP Photo: Nathan Carman, center, carries documents as he arrives at federal court, Tuesday, Aug. 13, 2019, in Providence, R.I. Carman faced civil charges in federal court over insurance issues regarding the boat aboard which he and his mother went out to sea for a night of fishing in 2016. The boat sank, Carman survived but his mother was never found. (AP Photo/Steven Senne)

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