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U.S. Department of Justice Jim Vines Eli J. Richardson Phone: 615-736-2124 September 7, 2006 |
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Former Tennessee Highway Patrol Criminal Investigator Sentenced
David Kustoff, United States Attorney for the Western District of Tennessee, announced today that United States District Court Judge J. Daniel Breen sentenced Paul E. Phillips, III, to three years of probation, three months house arrest and a $100 special assessment following his guilty plea to one count of mail fraud in violation of Title 18, United States Code, § 1341. Phillips was also ordered to pay a total of $46,969.24 in restitution during his term of probation to State Farm and Twin City Fire Insurance Company.
Phillips was indicted by a federal grand jury in Memphis in July of 2005 and charged with two counts of mail fraud and one count of wire fraud in connection with an insurance claim submitted by Phillips on a 2003 Chevrolet Tahoe that was found in the Mississippi River in October of 2003. He pleaded guilty to one count of mail fraud in June of 2006. At the time of the events charged in the indictment, Phillips was a criminal investigator with the Tennessee Highway Patrol.
At the time Phillips pleaded guilty, the parties executed an agreed upon factual stipulation as part of the plea agreement. This document, which was filed in court, described the criminal conduct supporting Phillips' guilty plea:
On or about September 26, 2002, [Phillips] purchased a 2003 Chevrolet Tahoe ("the Tahoe") from Delta Auto Sales in Dyersburg, Tennessee. The purchase of the Tahoe was financed by General Motors Acceptance Corporation ("GMAC") under a no interest promotional-type loan and the amount financed was $53,349.24. The finance contract required [Phillips] to make a single, annual payment of $17,783.08 to GMAC each year for a three year period. The first payment was due on September 27, 2003, one year following [Phillips] purchase of the Tahoe.
[Phillips] insured the Tahoe with a collision and liability insurance policy issued by State Farm Mutual Automobile Insurance Company ("State Farm"), which was sold to him by a State Farm agent located in Dyersburg, Tennessee. The State Farm policy insured against the loss or damage of the Tahoe and GMAC was noted as a lien-holder on the policy. In addition to the State Farm policy, [Phillips] also purchased a "GAP" insurance policy at the time he purchased the Tahoe. In the event of a total loss of the Tahoe, the "GAP" insurance policy covered any difference between the amount paid by State Farm and any amount due and owing to GMAC once State Farm had paid what it was required to pay under its policy. The "GAP" insurance policy was issued to [Phillips] by Twin City Fire Insurance Company.
In September of 2003, [Phillips] took the Tahoe to Delta Auto Sales and they agreed to try and sell the Tahoe for [Phillips]. [Phillips] left [the] Tahoe on the lot at Delta Auto Sales. Several days later, [Phillips] gave an individual he knew a key to the Tahoe and asked him to take the Tahoe and dump it in the Mississippi River. One night in late September, 2003, this individual took the Tahoe from the Delta Auto Sales lot and dumped it in the Mississippi River at a boat ramp in Lauderdale County, Tennessee. After he had dumped the Tahoe in the river he informed [Phillips] that he had successfully done so.
On or about October 4, 2003, the Tahoe was discovered in the Mississippi River near the boat ramp where the individual had dumped it in late September, 2003. The Lauderdale County Sheriff's Department notified [Phillips] that the Tahoe had been found. Later that day, [Phillips] contacted the State Farm agent in Dyersburg who had sold him the State Farm insurance policy and reported that the Tahoe had been stolen.
On or about October 7, 2003, a State Farm claims representative in Jackson, Tennessee, deposited a theft affidavit, addressed to [Phillips] in Dyersburg, Tennessee, in the United States mail. State Farm requires an insured to complete and submit a theft affidavit to the company in order to make a claim on a liability insurance policy. [Phillips] filled out the theft affidavit and returned it to State Farm. [Phillips] contacted Delta Auto Sales and informed them of the loss of the Tahoe and they submitted a claim to Twin City Fire Insurance Company on or about December 8, 2003.
Based upon [Phillips] submission of a claim on his insurance policy, State Farm paid GMAC $41,041.05 on or about November 18, 2003, for the loss of the Tahoe. On or about February 4, 2004, Twin City Fire Insurance Company, based upon the submission of a claim on the "GAP" insurance policy, paid GMAC $12,308.09.
The
case was investigated by Special Agents David White and Jim Medlin of
the Tennessee Highway Patrol's Criminal Investigation Division and Special
Agent Jeffrey Jackson of the Federal Bureau of Investigation. Joe Murphy
of the United States Attorney's Office prosecuted the case.