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Thursday - September 23, 2004


NEW BERN - United States Attorney Frank D. Whitney announced that THOMAS M. HODGES, a former Senior Vice President at a Charlotte, N. C., insurance consulting firm, was sentenced on Wednesday, September 22, 2004, in federal court in New Bern, to 58 months in prison. HODGES was also ordered to forfeit a retirement account worth approximately $200,000.00.

HODGES' sentence followed his April 19, 2004, guilty plea to mail fraud, money laundering, and embezzlement of an insurance premium. According to the Indictment and the evidence presented in connection with HODGES' guilty plea and sentencing, HODGES defrauded numerous victims in Eastern North Carolina of over one million dollars. The victims included several large corporations and cities.

HODGES used his position as a Senior Vice President of a Charlotte, N. C., insurance consulting firm and a licensed insurance agent to defraud his victims. He had his victims purchase health, life, and disability insurance policies for their employees from particular insurance companies. HODGES then had these victims pay his firm significant fees for his time and expenses, while assuring them that he would receive no commissions from the sale of the policies. In fact, HODGES was receiving commissions out of the victims' insurance payments, and was directing the money through third parties to prevent his victims, his firm, and the insurance companies from learning of his fraud.

Investigation of the case was conducted by the North Carolina Department of Insurance. "Thanks to the hard work of my investigators and the U. S. Attorney's Office, HODGES is no longer a threat to North Carolina," said Insurance Commissioner Jim Long. "I want to warn residents to continue to look out for frauds like HODGES'. Please call our hotline at 1-800-546-5664 with any questions or concerns about insurance companies or agents."

U. S. Attorney Whitney praised the efforts of the Department of Insurance in this matter. "Recent estimates tell us that each year 10% of health care payments in this country--or $130 billion --is lost to fraud," he said. "We must continue to vigorously prosecute those responsible for this serious burden on our nation's health care system."

Assistant U. S. Attorney Clay C. Wheeler prosecuted the case for the United States.


News releases are available on the U. S. Attorney's web page at within 48 hours of release.

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