FORMER INSURANCE AGENT PLEADS GUILTY TO THEFT

Attorney General J. Joseph Curran, Jr., announced today that Stephen R. Hitch, 49, of Salisbury, Maryland pled guilty to felony theft in the Circuit Court for Wicomico County before Judge Donald C. Davis on March 22, 2004. The prosecution follows a joint investigation conducted by the Insurance Fraud Division of the Maryland Insurance Administration and the Office of the Attorney General.

The statement of facts presented to the Court in support of Hitch’s guilty plea established that, between December 1, 1995 and September 30, 1997, Hitch stole $293,639.00 from American Liberty Financial Services, Inc. and Prime Rate Premium Finance Corporation, Inc. in thirty-nine (39) instances of fraud. The victims in this case are premium finance companies. These companies finance premiums for insurance customers who cannot afford to make lump-sum payments for policies of insurance. Insurance agents are sometimes given authority by these companies to write premium finance checks to pay a premium for a customer. The customer then becomes obligated to make installment payments to the premium finance company. Hitch was given the authority to write premium finance checks by both American Liberty and Prime Rate. In early 1996 and continuing through September of 1997, Hitch wrote premium finance checks and deposited them in various Hitch business accounts for non-existent policies, or for policies where the customer had paid the insurance company in full. Hitch used a portion of the money converted to finance several of his other businesses. On other occasions, he wrote checks payable to himself. Often, when the premium finance company checks were deposited, his business accounts were overdrawn by significant amounts.

A sentencing date has not been set.

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