Nearly two years after he escaped justice for theft due to a reported “mix-up” at the Mobile County District Attorney’s office, local insurance agent Thomas Burns has been indicted for both theft and insurance fraud in separate state cases expected to head to trial later this year.
But according to an affidavit unsealed in federal court last week (see below), Burns may have used his free time in the interim to defraud a number of clients in Mobile and Baldwin counties and could also be facing federal charges of insurance fraud and wire fraud.
Court records from 2017 indicate Burns was initially charged with theft in district court after writing more than $22,000 worth of checks to himself while he was employed as a manager by a State Farm agency in Mobile. But according to Mobile County District Attorney Ashley Rich, the case was dismissed in November 2017 after the detective in the case did not show up to court to testify.
Rich said Tuesday it was not a “mix-up,” but her office was not aware Det. Michael Maxey had left the Mobile Police Department, so the subpoena never reached him. Rich explained when she requested to continue the case while it was reassigned to another detective, Judge George Hardesty declined and dismissed the charges.
Rich said after it was dismissed, Burns’ theft case was presented to a grand jury within a month and he was subsequently charged in circuit court. Then, in March 2019, Burns was indicted in circuit court for insurance fraud after allegedly filing false information in support of a claim on his personal life insurance policy. Both of those cases are set for trial later this year, Rich said, and each charge is a felony with sentencing guidelines of two to 20 years.
But all the while, it appears Burns maintained an active license with the Alabama Department of Insurance. The State Farm agency he previously managed was shut down, but a federal affidavit in support of a search warrant unsealed last week indicates he continued to issue policies under the name of Tommy Burns Agency LLC. While Burns has not yet been charged with a federal crime, the affidavit noted “36 grand jury subpoenas have been served to various banks and insurance carriers believed to have done business” with Burns.
In establishing probable cause, a special agent with the Federal Bureau of Investigation wrote that the Mobile field office received a walk-in complaint last December from Orange Beach resident Katheryn Scott. Scott, an accountant and a certified fraud investigator, said she was contacted by her daughter, Mindy Dees, a marketing director at Foley-based South Shore Insurance Underwriters (SSIU) about “a pattern of non-payment for policies” by Tommy Burns Agency.
Scott’s investigation, the affidavit reported, “found that eight out of 16 policies bound by SSIU on behalf of Tommy Burns Agency were canceled for non-payment.”
A separate complaint to the Alabama Department of Insurance (DOI) in March notified compliance officers that 17 of 20 policies issued by Burns and bound by Southern Cross Underwriters (SCU) in Mississippi were canceled or expected to be canceled as a result of non-payment. Allegedly, SCU filed the complaint “after being contacted by several customers of Tommy Burns complaining that they had made full payment to Tommy Burns.”
One of those clients, Carolyn Gentry, said she received a notice of cancellation on her homeowner’s policy from SCU but when she contacted Burns, he did not offer a refund but offered to find her another underwriter. Another client, Wanda Stewart Turner, visited Tommy Burns Agency in December 2018 with her 91-year-old father to obtain a one-year homeowner’s policy on his behalf.
After making a check out to the agency for $1,053.96, Turner was notified a little more than a month later that the policy was being canceled due to non-payment. After she notified Burns, Burns offered to cut a check to SCU, but that check bounced and the policy was canceled.
Two other clients, William Henry Couch Jr. and Michael Dennis Hardy, related similar stories to the FBI, claiming that within weeks or months of paying policy premiums to Burns, they received notices of cancellation from the underwriters due to non-payment.
In late March, FBI agents met with Burns’ office assistant, Angela Kay McConnell Bassett, who, besides Burns, is the only other employee of the agency. According to the affidavit, Bassett had no prior knowledge of the insurance industry and took the job with the understanding Burns would teach her.
Bassett, who has also not been charged with a crime, allegedly related ample information to the FBI about Burns’ management practices and history of non-payments to underwriters. In one episode from late 2018, Bassett detailed how Burns filed a fraudulent report about the date of a client’s kitchen fire so the client could seek reimbursement even after his policy had been canceled for non-payment.
“After this incident, Bassett began to notice that Burns often cashed checks received from customers that were supposed to be for their insurance premiums, but Burns was not forwarding the money on to the insurance underwriters. Burns would often walk next door from the office to Century Bank and cash the checks there. Burns would also go the banks where the customers had their accounts to cash the checks.
“In November 2018, Burns directed Bassett to get new policies for all of his SSIU customers, because SSIU had cut him off,” the affidavit continued. “Burns had Bassett got new quotes from a different insurance underwriter, create falsified statements of ‘no loss,’ and generated new policies. Burns then directed Bassett to sign the customer’s name on the new policy applications.”
A request for comment from the Department of Insurance was pending at the time of deadline, but Rich said it was her understanding that after charges were filed, the DOI was notified.
“When the insurance commission was made aware of these charges, they put their administrative policies in place and it’s our understanding he got a cease and desist letter and was not supposed to be conducting insurance business,” Rich said.
This story will be updated as it develops.
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