READ: Beck won office on borrowed money, his own that feds say was embezzled

READ: Feds: Georgia insurance commissioner used fraud to fund campaign

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The McKaigs are two of four people who investigators believe Beck used to carry out his scheme, The Atlanta Journal-Constitution has learned. Authorities have’t released the names — they are referred to by initials in the indictment — but the newspaper identified the couple, as well as the two others, by examining public records, conducting interviews and connecting dots in court records. What emerges is the most complete account yet of the complex and prolonged scam in which Beck allegedly duped some of those closest to him for his own benefit.

“He betrayed not just us, but his employer, his family, his supporters and the voters of Georgia,” Steve McKaig said in a statement.

Federal authorities said Beck, who has denied any wrongdoing, used the cash in part to fund his campaign. In hindsight, McKaig said he and his wife now believe Beck’s motive was to run a cash-heavy campaign — an ambition so strong that Beck was willing to destroy their friendship in the process.

Beck’s lead counsel, Bill Thomas, said the suspended insurance commissioner and his wife “are deeply saddened that the McKaigs have been dragged into this unfortunate situation.

“It can be scary to talk to prosecutors about a criminal case, particularly when you are referenced in an indictment. The Becks understand how people who so far have heard only the government’s side of a story could become angry and could become convinced they were betrayed by a friend. But that’s not the truth here.”

The first targets: a cousin, a friend

Beck, 57, a Carrollton native, has been well-known in Georgia politics for decades, a self-effacing character who tells folksy jokes like Andy Griffith and breaks into prayer in public.

He was press secretary for Lt. Gov. Pierre Howard in the 1990s and then became head of the Georgia Christian Coalition and lobbied at the Capitol on issues like the alleged immorality of selling booze on Sunday. He also worked for former insurance commissioners John Oxendine and Ralph Hudgens. But it’s his employment at the Georgia Underwriters Association that is of most interest to federal officials.

The association is a state-created entity that offers property insurance to high-risk homeowners who have trouble getting coverage. Beck was general manager of operations until last August, when he left in the middle of his campaign.

The indictment says he began to rip the company off in 2013.

That’s the year when he allegedly had Matt Barfield (identified in the indictment only as “M.B”) create a company called Green Technology Services (“Company A” in the document). Beck told Barfield, who is his cousin, he had developed a new way to do home inspections for the association’s customers. Beck wanted to know if Barfield would handle “the books” for a cut of the proceeds. Barfield agreed after his cousin assured him everything was “on the up and up,” authorities said.

Reached by The AJC, Barfield declined to comment except to say: “I am cooperating with the FBI as a witness.”

The U.S. Attorney’s Office in Atlanta and the FBI also declined to comment for this article.

In 2013, Beck brought in another helper: his friend, Steve Gradick, a Carrollton radio station owner, The AJC has learned.

The indictment says Beck approached Gradick (“S.G.” in the document) and said he was looking for a company to help send cash from the Georgia Underwriters Association to the Georgia Christian Coalition to “build up and improve” the coalition. Beck convinced Gradick to create a new company to facilitate the donations and take 10 percent for his trouble, according to the indictment. It’s unclear how Beck explained the odd idea that the association needed such a middleman.

The indictment doesn’t name Gradick’s company, but The AJC has determined it is Paperless Solutions, which Gradick founded in January 2013. Gradick didn’t respond to multiple requests for comment. There is no suggestion in the indictment that Gradick — or the McKaigs or Barfield — knew they were part of an allegedly illegal scheme.

A cancer fight leads to a job offer

Steve McKaig said Jim Beck approached his wife on the trip to Italy.

Jim Beck told Sonya McKaig the underwriters association needed someone to review home inspections and determine if the customers’ premiums should be adjusted. She agreed, and public filings show she started a company called Lucca Lu, apparently partly named for the picturesque Tuscan city of Lucca.

The indictment says Beck put Sonya McKaig under the false impression that Barfield’s company was creating the inspection reports. Barfield thought a different company, Creative Consultants, was creating the reports, the indictment says. Beck controlled Creative Consultants. It’s not clear who was actually making the reports, but Steve McKaig’s statement suggests his wife reviewed numerous inspection reports.

Prosecutors said she was paid $908,000 in total from the Georgia Underwriters Association, but at Beck’s direction, she sent $713,000 to Barfield’s company as payment for its work. Barfield then took out his 10 percent and sent the rest to Creative Consultants, authorities believe. At that point, Beck had control over the money.

In 2016, Beck asked Steve McKaig if he wanted to do some work for the association, too. Beck said the company needed someone to help customers mitigate damage after their homes flooded.

Steve McKaig agreed and created Mitigating Solutions. The company’s website contains tip-sheets for Georgia Underwriters Association members so they could try to save their carpets, floors, electronics and furniture.

Steve McKaig said he did a great deal of work and, like his wife, worked alongside employees of the Georgia Underwriters Association. (The association has said it’s the “victim” of Beck’s scheme and had no knowledge of what he was doing.) As with Sonya McKaig’s company, it was in the billing process with Mitigating Solutions where Beck allegedly skimmed money off the top.

In late 2017, as Beck was getting his campaign started, the campaign paid Steve McKaig about $3,400 in fees and reimbursements as an “outreach coordinator,” according to disclosures filed with the state ethics commission.

Beck largely funded his primary campaign with personal contributions and loans from the same bank that investigators list as the destination of the money collected in the alleged scheme.

After the primary, the insurance industry began contributing to Beck. Among the donors to his campaign were most members of the GUA board, the Atlanta Journal-Constitution reported last month, including recently elected Georgia Republican Party Chairman David Shafer.

Jerome Guiney, the chairman of the association board, could not be reached for comment this week but said earlier that the association has “cooperated fully” with the U.S. Attorney’s Office and FBI.

Shortly before the primary, Beck filed a personal financial disclosure that showed a net worth of $3.7 million, no liabilities and a 2017 salary of $250,000, with nearly $500,000 in total income.

Beck won the general election, beating a Democrat he outspent about 27-1.

How it all fell apart

In April 2018, Georgia Inspector General Deborah Wallace approached the feds with a tip about Beck’s alleged scheme. How she learned about it is unclear.

The scam continued through August, according to indictment, when Beck left the underwriters association after winning the Republican nomination for the insurance commissioner’s race. It wouldn’t be known publicly for many more months, but FBI agents were gathering evidence that Atlanta Special Agent in Charge Chris Hacker has said shows “Beck abused the trust of friends and his employer.” U.S. Attorney Byung J. “BJay” Pak has said Beck also lied to a relative, an apparent reference to his cousin, Barfield.

In January, Steve and Sonya McKaig went to work with Beck at the Georgia Department of Insurance, the husband as an analyst, the wife as the human resources director. Both resigned on March 18, according to their personnel files, obtained through the Georgia Open Records Act. Steve McKaig said he and his wife resigned after becoming convinced Beck betrayed their trust, though McKaig didn’t elaborate.

Beck said he asked Gov. Brian Kemp to suspend him from office so he could devote himself to his defense. Beck may have tough go of it: federal prosecutors have a conviction rate of higher than 90 percent.

Still, Thomas, Beck’s lead defense attorney, said there is another side to the case that will change how people, including the McKaigs, feel.

“The full story has not yet come out,” Thomas said, “and it won’t until trial.”