A Medford, Massachusetts, insurance agent who police say issued a fake policy to collect the money, allegedly pretended to be her victim before a judge.
Mary Kumar, 26, who works at Prestige Insurance, faces charges including intimidating a witness, forgery and identity fraud.
Officials say Kumar pretended to be the victim in court and that the true victim spent three days in jail as a result of the alleged identity theft.
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According to a police report, officials were made aware of customers of Prestige Insurance who were not getting coverage despite paying.
Kumar is due back in court on July 14.