FORMER ALFA AGENT SENTENCED IN FEDERAL COURT

BIRMINGHAM, AL - JAMES A. MADDOX, 61, of Fyffe, Alabama, was sentenced today in U. S. District Court to 24 months and one day. He was also ordered to pay restitution in the amount of $5,489,629.72. The sentencing hearing which lasted 6.5 hours was conducted before U.S. District Court Judge Virgina Hopkins. MADDOX, a former licensed agent for Alfa Life Insurance Corporation (ALFA), plead guilty to a Criminal Information charging him in a scheme to commit mail fraud against ALFA in February of 2007.

"While we are disappointed in the length of the sentence given, we are gratified that restitution was ordered in the amount ALFA lost," stated U. S. Attorney Alice H. Martin. “Maddox has begun repayment and has paid approximately $917,000 towards restitution at this time.

According to the Information and Plea Agreement, MADDOX began working for ALFA as a licensed agent in 1973. 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.

Maddox 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.

“The FBI will continue to investigate allegations of white collar crime,” stated Carmen S. Adams, Special Agent in charge, Federal Bureau of Investigation. “Schemes to defraud can be discovered.”

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.

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