FORMER INSURANCE AGENT SENTENCED FOR THEFT

Attorney General J. Joseph Curran, Jr., announced today that Stephen R. Hitch, 49, of Salisbury, Maryland was sentenced Friday afternoon May 28th to 15 years in the Division of Corrections. The Court suspended all but 5 years of the sentence to be served in prison. Hitch was charged with stealing $293,639 from American Liberty Financial Services and Prime Rate Premium Finance Company. The Honorable Donald C. Davis also placed Hitch on 5 years supervised probation upon his release from prison and ordered Hitch to pay $248,141 in restitution to American Liberty and $11,710 to M&S Transportation, Inc. Judge Davis cited the nature of the offense, the amount of the thefts and the fact that Hitch breached the trust placed in him by American Liberty and Prime Rate as factors in the sentence. Hitch pled guilty to the thefts on March 22, 2004.

According to facts presented at the time of Hitch’s plea, Hitch stole $293,639 from the two premium finance companies. The companies grant check writing authority to agents so clients, who cannot afford large insurance premiums, can finance payment of these amounts through finance companies. Hitch wrote premium finance checks and deposited them into his insurance agency accounts, his personal accounts or accounts for other businesses he owned. Often, there were no policies in existence when he wrote the checks or the customer had paid the insurance company premium in advance. In the instance involving M&S Transportation, M&S had paid its premium in full when Hitch wrote a premium finance check in the amount of $11,710 and deposited it into a Hitch Agency account. Hitch then made payments toward the financed premium until he missed a payment. M&S was then notified that their worker’s compensation policy would be cancelled and it paid the amount off to avoid the cancellation.

The prosecution followed a joint investigation conducted by the Office of the Attorney General and the Insurance Fraud Division of the Maryland Insurance Administration.

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