In North Carolina, 81 individuals across fourteen counties were returned approximately $11 million, thanks to the tenacious work of the North Carolina Department of Insurance's Criminal Investigation Division (CID).
According to an announcement on March 29 by NC Insurance Commissioner Mike Causey, two retired insurance agents, Milton Hooks, 72, of Rocky Mount and James Mangum, 69, of Tarboro were convicted of six counts each of obtaining property by false pretense.
Extensive investigation over 7 years
CID conducted an extensive investigation over the course of seven years that stretched across 14 N.C. counties. According to the CID, Hooks and Mangum targeted senior citizens in a regional scam that involved the reallocation of money people had in savings and insurance policies.
"Preying on our senior citizens is wrong," said Causey. "I am pleased NCDOI criminal investigators were able to recover nearly $11 million in this important case that hopefully will help deter white collar crime like this in North Carolina."
The Department of Insurance brought the case against Hooks and Mangum for influencing 77 victims across North Carolina to remove money from their 401(k) and other life insurance policies and put it into an annuity product known as a "Fixed Indexed Annuity" from 2004 to 2011. CID found that Hooks and Mangum used their credibility as fiduciaries to move approximately $11 million into various annuity accounts with three companies that sold these products and earned more than $620,000 in commission payment for the sale of the products under false pretense. As part of a plea agreement with the court, Causey announced, the victims received refunds of their initial investment plus interest from the companies.
Money-laundering scheme
During the investigation, CID discovered that Hooks and Mangum also convinced four victims to make individual $316,000 investments, which they directly diverted into their bank accounts. They then laundered the money for their own personal use. These four victims were repaid the money directly from Hooks and Mangum as an additional part of their plea agreement.
N.C. Superior Court Judge Thomas H. Lock dismissed 100 counts of obtaining property by false pretense across Beaufort, Bertie, Bladen, Chowan, Cumberland, Edgecombe, Halifax, Hertford, Hoke, Martin, Mecklenburg, Robeson, Wake and Washington counties and suspended Hooks and Mangum's sentence because all the victims would be repaid the money that was defrauded from them.
According to the N.C. Department of Insurance, in general an estimated 10 cents of every dollar paid in premiums goes toward the payment of fraudulent claims. To report suspected fraud, citizens can contact the Department of Insurance Criminal Investigations Division at 919-807-6840. Callers may remain anonymous. Information on how to report fraud is also available on the Department of Insurance's website.
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