A Mobile insurance agent faces a federal fraud charge after authorities say he collected more than $40,000 from 17 clients for policies that were never issued or were later canceled without their knowledge.
Prosecutors filed a single fraud count against Anthony Stutts in federal court in Mobile. According to court records, Stutts has reached an agreement with prosecutors and is expected to enter a guilty plea before U.S. District Court Judge Callie Granade.
The charge stems from Stutts’ work as an agent for Farmers Insurance, where court records say he faxed a false finance agreement to an insurance underwriting company on behalf of a client who had already paid him more than $16,000 for a policy. According to the records, the fax was sent to “forestall Stutts’ payment due to the underwriter,” delaying detection of the scheme.
The FBI opened an investigation after several of Stutts’ clients contacted the agency in 2013, complaining that he had collected premium payments for policies that were never actually issued, court records show. Investigators ultimately identified 17 victims who paid for coverage that either never took effect or lapsed due to nonpayment that Stutts never forwarded.
Federal fraud cases involving insurance agents typically hinge on paper trails between agents, underwriters and clients, and prosecutors in the Stutts case relied heavily on financial and fax records to build the count against him. Insurance regulators have periodically flagged similar schemes across Alabama, in which agents collect premiums directly from clients without properly remitting payments to the underwriting companies whose policies they sell.
The case highlights the risks consumers face when paying premiums directly to an agent rather than confirming coverage directly with an insurance carrier. Clients who believe they may have been affected by Stutts’ business dealings were encouraged to review their policy documentation and contact Farmers Insurance directly to confirm the status of any coverage purchased through his agency.