A 34-year-old Eden Prairie man is charged with conning an insurance company out of at least $7 million by submitting false claims, federal prosecutors announced Wednesday.

Travis Magdalena Scott was charged with one count of wire fraud and one count of money laundering. From June to December of 2008, Scott allegedly submitted false insurance claims to Zurich North America. He then used the proceeds for personal gain, officials said.

Scott's insurance policy was for his business, Security Management Technologies. The policy covered both the property of the business, which included supercomputers, and business interruption. If the property was damaged, Scott could either take the cash value of the damaged property, as determined by Zurich, or replace the damaged property up to his policy limit of $9.5 million.

On June 1, 2008, about a year after he took out the policy, Scott reported that his business had been struck by lightning and sustained heavy damage. Scott opted to exercise the "replacement option" on his policy for up to the $9.5 million policy limit, prosecutors said.

Later that month, Scott told Zurich that a new computer system had been delivered. Based on that, the company delivered three checks totaling about $9.5 million to Scott. However, Scott allegedly did not use the money to buy computers but kept it for personal gain -- such as buying a Beech aircraft.

Zurich also paid Scott more than $1.9 million for business interruption, an amount based in part on reported profits of Scott's company from his tax return. Officials allege that return was false.

Law enforcement searched Scott's home and airport hangar on Nov. 16, 2010. They also searched and seized bank accounts and other property. In addition, the IRS Criminal Investigation Division seized three planes, a boat, three vehicles and more than $5 million from various bank accounts. The FBI and the Insurance Fraud Division of the Minnesota Department of Commerce also were part of the investigation.

If convicted, Scott faces up to 20 years in federal prison for wire fraud and 10 years for money laundering.

James Walsh • 612-673-7428