On November 17th, 2016

Former AFLAC Employee Convicted of Defrauding Company out of $4 Million Filed fake disability claims, received commission & kickbacks

SANTA ANA –On November 15, 2016, a former sales representative for AFLAC was found guilty of federal fraud charges stemming from a scheme that bilked the insurance company out of $4 million with fake disability claims.

Patricia Diane Smith Sledge, 60, of Redlands, was convicted late in the scheme involving fictitious employers and “employees” who falsely claimed to have suffered injuries that prevented them from working.

“The California Department of Insurance assisted with this investigation that led to the arrest, prosecution and conviction of this individual,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  The joint investigation also included United States Department of Labor - Officer of Inspector General, and the Federal Bureau of Investigation.

After a two-week trial, the jury convicted Sledge of six counts of mail fraud and found that Sledge committed two counts of witness tampering while on bond in this case.

Evidence proved Sledge, who was residing in Irvine while working for the company formally known as American Family Life Assurance Company, sold disability insurance policies to bogus companies and people who supposedly worked for those companies. Sledge then orchestrated the filing of fraudulent disability claims and directed the purported employees to doctors that would sign off on the fake injury claims.

Because of the false claims, AFLAC suffered losses of approximately $4 million. Sledge made money both from the commissions related to the sale of the fraudulent insurance policies and from kickbacks she received from the supposedly injured “employees.”

Sledge was also found guilty of witness tampering for encouraging potential witnesses to lie to federal investigators and discouraging them from cooperating in the investigation. Both counts related to conduct after Sledge became aware of the federal investigation, and one count stemmed from conduct after she was indicted in this case and freed on bond in 2012.

Two others have been prosecuted for acting as fake employers and fake employees in this scheme.

Sledge is scheduled to be sentenced on March 20, 2017.  She faces a statutory maximum sentence of 160 years in federal prison.

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