Raleigh, N.C. – Milton Hook and James Mangum have been found guilty in an insurance fraud racket used against 81 victims in 14 counties in North Carolina. The fraud occurred while they were insurance agents, though they have since retired.
Investigators say that the same dodge was used against almost all of the victims. The culprits would advise their customers to withdraw money from their life insurance or 401-K policies and deposit it in Fixed Index Annuity accounts, making false claims about these accounts. The agents would collect commissions on the sale of these accounts, totalling $620,000.
In some other cases, the insurance agents convinced senior citizens to make additional $316,000 investments, which they diverted to their own bank accounts.
“Preying on our senior citizens is wrong,” North Carolina Department of Insurance Commissioner Mike Causey said. “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.”
According to officials, one man whose parents fell prey to the scheme realized that something was wrong and alerted the NCDOI in 2008. This led to an investigation that went on for 7 years which led to the arrest of Milton Hooks, 72, of Rocky Mount, and James Mangum, 69, of Tarboro.
Seth Edwards, the District Attorney of the second prosecutorial district, said that all of the victims got their money back with interest.
“To be able to not only reimburse the victims, but do it with interest is unheard of. I’ve been doing this job since 2003 and I don’t ever recall such a successful outcome, at least as far as the victims’ standpoint is concerned,” he said.
The two retired insurance agents will not serve any jail time. Investigators made recovery of the money a priority over punishment.
Insurance Commissioner Causey said that he will be asking the General Assembly to increase the Department of Insurance’s investigation team to 50 officers from the present 20.
WRAL interviewed several of the victims. One victim, who requested to have her name withheld, is overjoyed that the money is being returned.
“It’s been a wonderful relief,” she said. “At least I can sleep not worrying about it.”
She said that the experience has caused a lasting change in her, however.
“It’s made me very suspicious of any and everybody. I won’t buy any more insurance.”