Defendant's tears arrive too late for those affected by fraud case

October 31, 2003|By Michael Olesker

IN BALTIMORE County Circuit Court this week, with nothing else to offer, Alfred Murray Slattery offered his tears. They started as a little trickle, so that Slattery could wipe them away with his two pinkies. Then he buried his face in his hands and sobbed, lifted his face, went for a handkerchief and blew his nose like a bugle call, lest Judge Vicki Ballou-Watts miss a single nuance of the scene.

The judge saw everything. Then, deeply touched, she tossed a grenade at Slattery, sending him off to prison for 18 months and ordering him to pay $1.7 million in restitution when he gets out.

It's a terrible thing to see a grown man cry, especially when the tears arrive too late for all concerned parties.

For Slattery, the great emotional scene arrived while discussing a business he once had with a woman named Michelle Lyons Baker. Slattery had 75 percent of it, and Baker, 25 percent. The business was called National Insurance Services Inc., and for about a decade it did well enough that its partners were spending money with both hands.

The only problem was, it did lots of business based on pure fraud, a condition Slattery blames primarily on Baker's cocaine troubles and Baker blames primarily on Slattery's greed. So long, swell partnership. The day before Slattery's sentencing, Baker stood in another county courtroom, before Judge Lawrence Daniels, and pleaded guilty to insurance fraud charges that will likely send her to prison as well.

"Insurance fraud costs the citizens of Maryland billions of dollars a year," Ronald Sallow, associate commissioner for the state's Insurance Fraud Division, said yesterday. His office conducted the investigation, along with the attorney general's office. "It brings tremendous financial hardship to a lot of people."

In fact, the $1.7 million restitution Slattery was ordered to repay - and the $542,939 authorities say Baker should repay - only hints at a deeper figure.

"That's conservative," said Emmet Davitt, the assistant attorney general who prosecuted the case. "That's just the money they still owe. The total they misappropriated was more like $3.6 million, before they decided to help us unravel things."

There was considerable unraveling, much of it done by state investigative auditor Janice Vetter, as Slattery and Baker began to come clean.

As Davitt put it, before Slattery's sentencing Wednesday, "It took many shapes and forms. In some cases, he used legitimate company names but forged signatures to obtain illegitimate premium finance agreements. Or he used false addresses, intending that individuals whose names were used on these policies wouldn't receive any documentation regarding them.

"In separate schemes, he would receive premium payments in full from customers but not remit these payments to the insurance companies - choosing instead to institute finance agreements without the insured person's knowledge and keep the premium payment for his personal use.

"These actions," Davitt told Judge Ballou-Watts, "weren't a one-time crime or spur of the moment. They were well-thought-out, sophisticated crimes. ... He defrauded on an almost daily, if not weekly, basis. And it went on for more than two years. ... The premium finance companies were hurt, yes, but so were the average Maryland consumers. It's the people in the street who pay for the fraud."

The previous day, he had similar words as Baker pleaded guilty to her charges.

"Pure greed," Davitt told Judge Daniels. "Lots of cash, and you think it's yours."

Baker, sitting a few feet away, looked as if she'd spent a lot of sleepless nights, but she showed no emotions. This was unlike the next day, when Slattery wept openly. It was sad to watch, except for this:

"The defendant," said Davitt, "hasn't taken much responsibility."

He's blamed Baker, saying she started the fraud to support a cocaine addiction. He's claimed his own crime was an "inattentiveness toward his business affairs and allowing his partner free unchecked access to his business accounts," Davitt said.

"But he was participating in the scheme from the beginning. In fact, he continued stealing money well after Baker entered a drug treatment facility and left the company, continued to steal after retaining counsel to negotiate a settlement with one of the victimized finance companies, and continued stealing premium money after meeting with representatives of the Maryland Insurance Administration to resolve the matter."

So it was pretty sad to watch Slattery's weeping this week. It was sad to hear his attorney talk about Slattery's drinking problems, and sad to hear about the $700,000 farm he had to sell, and the Ocean City condo he'll have to sell, and the family troubles he's now having.

But he bought those properties with money that wasn't his. And his tears arrived a little too late for everybody's good.

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