Alabama Booster Paul Bryant Jr. Has Ties to Insurance Fraud Scheme
College football fans are gearing up for Monday night's BCS championship game in New Orleans between No. 1 LSU and No. 2 Alabama. Beneath the surface lurks a story about money, power, fraud, and deceit. Does it involve an unruly player or a coach gone astray? No, it involves a man who sits atop one of the universities' governing boards, a man with connections to a crime that has gone largely unreported in the Deep South for almost 15 years.
When Alabama takes the field on Monday night at the Superdome, attention will focus on tailback Trent Richardson, offensive tackle Barrett Jones, linebacker Courtney Upshaw, and other Crimson Tide standouts. But none of them stands as the most influential individual behind the UA football powerhouse.
That title almost certainly belongs to a booster with documented ties to insurance fraud. And he is not just a regular fan. He is one of the most powerful money men in all of college sports, according to ESPN.
Paul Bryant Jr., the son of the late Hall of Fame coach Paul "Bear" Bryant, has clear ties to a federal insurance-fraud case that netted a 15-year prison sentence for a Philadelphia lawyer/entrepreneur named Allen W. Stewart. One of Bryant's companies, Alabama Reassurance, was implicated in at least nine counts of the Stewart indictment.
Has Bryant been shunned or kept at a distance by the University of Alabama? Not exactly. In fact, he pretty much runs the place, from his perch as president pro tempore of the University of Alabama Board of Trustees.
How many universities have a board president with clear ties to felony insurance fraud? It can happen, it seems, when you have a powerful name--and Bryant has perhaps the most powerful name in Alabama. With UA and Coach Nick Saban set to take on LSU and Coach Les Miles for the BCS National Championship, Crimson Tide fans aren't likely to ask too many questions.
The scandal connected to Bryant and Alabama Reassurance, ironically, dates to the late 1990s, about the time that signs of improper conduct from assistant football coach Jerry Sandusky were first seen--and mostly ignored--at Penn State. In another touch of irony, Alabama Re was a key player in a courtroom drama that played out not far from the heart of Nittany Lion country.
In late 1997, a federal jury in Philadelphia voted guilty on all 135 counts in the Allen W. Stewart case, and the verdict was upheld by appellate courts. According to news reports, it was one of the nation's largest cases of insurance fraud at the time. Media coverage, however, appears to have been limited to the Philadelphia area and trade publications.
Paul Bryant Jr. was not named as an individual in the case. But Alabama Reassurance, one of his companies under Greene Group Inc., was front and center.
You might say that Alabama Re was a "tightly held" company. It had almost $240 million in admitted assets, which sounds like a business with quite a few employees. But a 2006 report from the Alabama Department of Insurance shows that Alabama Re had a five-person board, headed by Bryant, and two of those board members served as the company's only full-time employees. It's hard to believe that any of those five people could have been unaware of the company's involvement in an insurance-fraud scheme.
Proof of Bryant's ties to the Stewart case can be found on the Web. A ruling from the U.S. District Court for the Eastern District of Pennsylvania upholds Allen W. Stewart's convictions--and proves Alabama Re's role in the case. We quote from a pertinent section of that ruling, encompassed in footnote 11. (You can read the full document at a link below.)
11. The relevant portions of the charge read as follows:Kevin C. Cox/Getty Images
Counts 24 through 32 charge a wire fraud scheme to deceive state insurance regulators involving reinsurance. The superseding indictment alleges that in late 1992 or early 1993 the defendant devised a scheme to deceive state regulators and others regarding the true and complete reinsurance arrangements involving Summit National Life Insurance Company, its subsidiary Fidelity General Life Insurance Company, and the Alabama Reassurance Company in order to inflate their financial statements.
What was at the heart of the Allen W. Stewart case? It was "a scheme to deceive state regulators" in order to disguise "the true and complete reinsurance arrangements" involving three companies--one of which was Alabama Reassurance. What was the purpose of this arrangement? To make the companies look stronger than they really were--in other words, to "inflate their financial statements."
Executives from HealthSouth, Enron, WorldCom, Tyco and other rogue companies have gone to federal prison for their roles in such schemes over the past decade or so. How did Paul Bryant Jr. manage to escape scrutiny? Why is he free to root on his beloved Crimson Tide in Monday night's BCS Championship Game, while Allen W. Stewart remains in federal prison?
Here is a link to the Pennsylvania federal-court document referenced above:
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