Arkansas Man Gets Five Years in Prison for $1.6M Insurance Fraud

January 13, 2017

A Fort Smith, Ark., man has been sentenced to five years in federal prison plus three years of supervised release for defrauding insurance customers, federal authorities say.

Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Samuel Bowron Phillips, 41, was sentenced on one count each of mail fraud, wire fraud and money laundering and was ordered to pay approximately $1.6 million in restitution to his victims.

Phillips withdrew funds from his customers’ annuity and insurance policies without their consent and knowledge, and used that money for himself, federal investigators say.

The investigation began after a complaint was filed in October 2015 with the Arkansas Insurance Department by business owners and residents after discovering the annuities Phillips sold them were nonexistent, statements he had given them were fabricated, and the money they had given him to invest for their retirement was gone, according to the statement released by the U.S. Attorney’s Office.

Investigators say that Phillips ran the scam from March 2013 through November 2015, and that customers lost a total of more than $1,600,000.

Phillips admitted that he had created two sham companies, Stevens Financial Asset Management and Paradigm Financial Partners LLC, and opened accounts for those entities. He used a fake name to conceal his connection to the fraudulent transactions and admitted he rented post office boxes in Fort Smith and Barling to receive mail for the two bogus companies he created to steal his customer’s money. Phillips was indicted by a federal grand jury in March 2016 and pleaded guilty in June 2016.

This case was investigated by the FBI, the IRS Criminal Investigation Division, the Postal Inspection Service, the Arkansas Department of Insurance, and the Fayetteville Police Department. Assistant United States Attorney Kyra Jenner prosecuted the case for the United States.

Source: U.S. Attorney’s Office, Western District of Arkansas

Topics USA Fraud Arkansas

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