FORMER ALFA AGENT AGREES TO PLEAD GUILTY TO MAIL FRAUD SCHEME - LOSS TO ALFA $5,489,629.72

BIRMINGHAM, AL - Federal mail fraud charges and an agreement to plead guilty to same were filed about JAMES A. MADDOX, 60, of Fyffe, today in U. S. District Court. MADDOX, a former licensed agent for Alfa Life Insurance Corporation (ALFA) has agreed to plead guilty to an Information charging a scheme to commit mail fraud against ALFA. A date for his guilty plea to be entered will be set by the court.

"Maddox abused his position of trust with ALFA and ran this fraudulent scheme from 1991 until it was discovered in 2006. ALFA had losses of at least $5,489,629.72," stated U. S. Attorney Alice H. Martin.

According to the Information and Plea Agreement, MADDOX began working for ALFA as a licensed agent in 1973. In that position he marketed insurance for ALFA, and acted as an agent in administering consumer loans to ALFa customers. The federal charges state that beginning in 1991, MADDOX caused certain ALFA customers to apply for loans from ALFA by making false and fraudulent representations to these individuals about the documents he asked them to sign, the purpose for which they were being executed, and obligations which resulted from their execution. MADDOX then prepared collateral certification reports - which were supposed to accurately describe the collateral for the loans so that ALFA could perfect its security interest - to reflect false information, effectively preventing ALFA from perfecting its security interests in the collateral. MADDOX then caused the borrowers to transfer the proceeds of the fraudulently obtained loans to him, and used those proceeds to pay off other loans and for his own use and benefit. When the scheme was discovered in July 2006, the total outstanding balance of the fraudulently obtained loans was $5,489,629.72.

The penalty for Mail Fraud is imprisonment for not more than 20 years, or a fine of not more than $250,000, or both.

Special Agents from the Federal Bureau Investigation investigated this matter. Assistant United States Attorney William C. Athanas is prosecuting this matter on behalf of the U.S. Government.