FORT SMITH -- A Fort Smith man stole more than $1.6 million from insurance and annuity policyholders to satisfy a gambling addiction, federal court documents show.
Samuel Bowron Phillips, 41, pleaded guilty Thursday to one count each of mail fraud, wire fraud and money laundering. He was charged in March in a 22-count indictment accusing him of stealing $1,634,487.89 from 21 victims over five years.
The remaining counts in the indictment will be dismissed, but Phillips will have to pay back the money he stole from all the victims, U.S. District Judge P.K. Holmes III said during the plea hearing.
As part of the plea agreement, Phillips agreed to pay back the money he stole and forfeit two silver bars, each weighing 10 troy ounces.
The plea agreement said Phillips, who had been licensed in 1999 to sell annuities and insurance policies in Arkansas, admitted to setting up two sham companies. He made up a name, Clint L. Martin, and rented post office boxes in Fort Smith and Barling to receive mail for the two bogus companies.
Assistant U.S. Attorney Kyra Jenner said the mail-fraud case involved a 74-year-old widow whom Phillips advised in 2012 to move her annuity from North American Company for Life and Health Insurance to EquiTrust Life Insurance Co. He handled the transaction involving $184,227.29. She lost $33,083.50 in the transaction as a surrender charge.
Later, Phillips sent a notification to EquiTrust, without her knowledge, to change the widow's address in Texas to one of the post office boxes in Fort Smith he controlled.
In 2013, Phillips notified EquiTrust, posing as the widow complete with forged signature, to liquidate the widow's account and transfer the money to one of the companies he created at one of the post office boxes.
The case for the wire-fraud count, Jenner said, was about a woman whom Phillips persuaded to buy a $1 million life insurance policy in 2010 for a one-time premium payment of $141,653.54 from the American General Life Insurance Co., known as AIG. The money was placed in a trust account.
In 2014, Phillips faxed documents to AIG to cancel the woman's policy and to send the refunded premium in a check made out to one of his companies to one of his post office boxes. The fax included handwritten instructions signed by Clint L. Martin, the name Phillips had invented.
State Desk on 06/10/2016