Regulators: Insurance scam paid for Bryant-Denny suite, Tide Pride donationPublished: Wednesday, August 25, 2010, 3:29 PM Updated: Wednesday, August 25, 2010, 3:59 PMPaul Cloos, Press-Register (WBIR TV)Bart S. Posey Sr.: Allegedly used money from an insurance company shut down by Tennessee regulators to buy a suite at the University of Alabama's Bryant-Denny Stadium and to give to the Tide Pride booster club. Tennessee insurance regulators accuse a Tennessee couple of using $2.6 million in ill-gotten gains from a bogus insurance scheme to fund a lavish lifestyle that included a suite and ticket package to University of Alabama football games.The alleged price tag for the Bryant-Denny suite: $138,000. Bart Posey also is alleged to have donated money from the company bank account to the University of Alabama's Tide Pride boosters organization, including a check for $38,000 in February.Bart S. Posey Sr. and Angie Posey of Springfield, Tennessee, were associated with American Trade Association Inc., one of several companies shut down by Tennessee regulators shut in May.A number listed for the Poseys said it was temporarily disconnected when called by the Press-Register on Wednesday. A call placed to William Hendricks of the Memphis law firm Evans Petree Bogatin PC, which at one time represented Bart Posey, was not immediately returned.The University of Alabama alumni database lists Bart S. Posey not as a graduate of the university, but as a "friend," meaning he is most likely a donor, a university official said.Tennessee officials canceled all policies issued by the American Trade Association Inc., Smart Data Solutions of Tennessee and Serve America Assurance, of Pakistan and South Carolina, saying the firms were never licensed to sell health insurance.A court in that state found the company violated state insurance laws, acted dishonestly and posed a significant hazard to the public.Read the complete complaint against the Poseys ATA sold bogus health insurance policies underwritten by Serve America, a company that appears to have never existed, Tennessee officials allege. A Chancery Court document filed Aug. 13 by Tennessee insurance commissioner, Leslie A. Newman, cites the following transfers as "a few of the many unlawful transfers" made by the Poseys:On Dec. 29, 2009, Bart Posey fraudulently transferred $588,539.78 to First State Bank for payment of a mortgage on property in his name at 4676 Highway 41 N, Springfield, Tennessee 37172.On Oct. 9, 2009, Angie Posey fraudulently transferred $45,000.00 for car funding to 41 & Main, a business account at F&M Bank in the name of Bart Posey. On Oct. 8, 2009, Bart Posey had signed a check from the 41 & Main account payable to Payne, a Chevrolet auto dealer in Springfield, in the amount of $44,342.66 for a Camaro automobile.On Aug. 27, 2009, Mr. Posey fraudulently transferred $31,509.94 to First State Bank for payment on property in his name at 814 Pitt Ave., Springfield, Tennessee 37172.On Aug. 14, 2009, Angie Posey fraudulently transferred $12,106.99 for a motorcycle for her husband, a Harley-Davidson Road King.On Aug. 3, 2009, Bart or Angie Posey fraudulently transferred by wire $144,400 to Evans Petree Bogatin firm, which at the time represented them in liquidation proceedings. Bart Posey instructed attorney Hendricks that the money was going to be used for the purchase of a house at 209A New Chapel Road in Springfield.On April 13, 2009, Angie Posey fraudulently transferred $10,494.15 to buy property adjacent to the lake house the Poseys owned in Logan County, Kentucky.On May 7, 2008, Bart Posey fraudulently transferred $2,500 to buy property adjacent to the Logan County lake house.On numerous other occasions, Tennessee regulators allege, Bart and Angie Posey fraudulently transferred money to pay for, among other things: credit card bills; personal loan payments; Springfield Realty, a business owned by Bart Posey; Larkin Lake Hunting Club; Utilities and supplies in Kentucky; Springfield Sports Bar, a business owned by Bart Posey; cosmetics; and gifts to relatives.The Tennessee insurance commissioner says that at the time of the order of seizure against the Poseys and their company, they owed in excess of $5 million to creditors. The business, meanwhile, had about $1.2 million in assets, meaning it essentially was insolvent.(Brent Hunsberger of The Oregonian newspaper contributed to this report.)
Paul Bryant Jr. and Alabama Reassurance: A Portrait of Fraud We have established that a company owned by University of Alabama trustee Paul W. Bryant Jr. was involved in a massive insurance-fraud scheme that led to a 15-year prison sentence for a Pennsylvania lawyer.But several intriguing questions remain: How did the lawyer, Allen W. Stewart, come to pick Bryant's company as a conspirator? Of all the insurance companies in the country, why did Stewart choose Bryant's company, Alabama Reassurance, to help him carry out a fraudulent scheme?And here is a fairly recent development: Alabama Re was liquidated in late 2007, with a new company (Alabama Life Reinsurance Company) more or less taking its place. Why was that action taken? We will ponder that question in a moment.But first, let's think about why Allen W. Stewart might engage the services of Alabama Reassurance. Stewart is in federal prison and not readily available for interviews. But his actions indicate he knew something about Alabama Re that made him think the company would be receptive to a fraud scheme? Is that because Alabama Re had engaged in fraud schemes before? And because the U.S. Department of Justice decided to call off an investigation of Alabama Re in the late 1990s, has the company engaged in fraud schemes since then?We don't have clear answers to those questions. But we do have a 2006 report from the Alabama Department of Insurance (DOI) that provides considerable insight into how Alabama Re conducted business. And it ain't a pretty picture.After reading the 77-page document, you are tempted to say, "Gee, what a fly-by-night outfit." But that might give fly-by-night outfits a bad name.First, let's consider a few peculiarities about Alabama Re. At the end of 2006, the company had "admitted assets" of $238,028,220. Is it housed in a major, multi-story building? Nope, it's in the Bryant Bank headquarters in Tuscaloosa, on McFarland Boulevard.You might think a company would need quite a few employees to help manage more than $238 million. But you would be wrong. Alabama Re has two full-time employees--President Scott Moore Phelps and Vice President/Actuary William Rodney Windham. They are joined on the board of directors by Paul Bryant Jr., president of Greene Group Inc.; Allen Wayne May, a Tuscaloosa veterinarian; and Sam Moore Phelps, a Tuscaloosa lawyer.Alabama Re apparently is a decidedly low-tech operation, paying little attention to basic business practices. Reading the DOI report, you picture two guys wearing green eye shades, hunched over their desks in a basement, surrounded by shoe boxes full of money that are covered in cobwebs.The DOI takes Alabama Re to task for all kinds of shortcomings and violations of the Code of Alabama. In fact, the report devotes 14 pages to noting how the company could better handle its operations. One gets the impression that the good folks at Alabama Re don't much care what the Department of Insurance thinks.Here are just a few of Alabama Re's "best practices," areas that the DOI said needed major attention:* Risk of water damage to computer center;* The backup tape log has a success rate of less than 50 percent;* No formal records-retention policy;* No computer-security policy;* No emergency response procedures;* No business contingency plan;* No anti-fraud plan; and* Daily backups stored at off-premises location.Some corner lemonade stands probably have better business procedures than Alabama Re. And yet, the company is not a small-time operation. A 1997 report by the U.S. Department of Health and Human Services, Assistant Secretary for Planning and Evaluation (ASPE), ranked Alabama Re among the country's top 50 reinsurers.It's joined on the list by such stalwarts as Swiss Re Life Company of America (No. 1), Lincoln National Life Insurance Company (No. 2), and Reliastar Life Insurance Company (No. 3)--not to mention such impressive names as Transamerica Occidental Life (No. 7), the Equitable Life Assurance Society (No. 23), John Hancock Mutual Life (No. 27), and Underwriters at Lloyd's of London (No. 32).I wonder how many of those companies have two employees. If you are going to conduct business in a shady fashion, is it wise to have only a few people who know about it?Interestingly, Alabama Re is no more, at least not in its original form. As of late 2007, according to the DOI report, the company was merged into Greene Group Inc. and liquidated. A new company, Alabama Life Reinsurance Company, was formed. It has two assumed reinsurance treaties--with Security Life Insurance Company of America and North America Insurance Company of Texas.The statute of limitations on crimes associated with the Allen W. Stewart case almost certainly has passed. With the liquidation of Alabama Re, any evidence of ongoing irregularities might be gone with the wind, too.As we've reported in previous posts, Alabama Re had a protector in the Clinton Justice Department of the late 1990s. And that protection almost certainly stayed in place during the pro-business George W. Bush era from 2000 to 2008.With the economy starting to implode, and public unrest building over multiple major business frauds, did the executives of Alabama Re see a Democratic administration on the horizon? Is that why they thought late 2007 might be a good time to liquidate Alabama Re?Something tells me it's not a coincidence that Alabama Re was dissolved in late 2007. Something also tells me that federal investigators might want to keep an eye on the activities of Alabama Life Reinsurance Company. Posted by legalschnauzer at 9:35 AM
Why would a guy that just forked out $138,000 for a BD suite follow that up with the purchase of a freaking Camaro? Oh wait...it must have been an IROC-Z.
Obviously for the next 5 star recruit from Gadsden.
Not a freaking Camaro - a bitchin' Camaro
First Dead Milkmen reference on the X?I think so.
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