SANTA ANA, California — Patricia Diane Smith Sledge, 60, of Redlands, has been found guilty of orchestrating a $4 million fraud scheme against AFLAC, exploiting her role as a former sales representative to file bogus disability claims using fictitious employers and employees. A federal jury convicted her Tuesday on six counts of mail fraud and two counts of witness tampering, sealing her fate in a case that exposed deep vulnerabilities within the insurance giant’s oversight systems.
Over the course of a two-week trial, prosecutors laid out how Sledge, while residing in Irvine and working for American Family Life Assurance Company, sold disability policies to shell companies and individuals who never actually worked. She then directed these so-called employees to doctors willing to sign off on fabricated injuries, funneling millions in fraudulent payouts from AFLAC while collecting commissions and kickbacks. The insurer ultimately lost approximately $4 million before the scam unraveled.
U.S. District Judge James V. Selna ordered Sledge to return for sentencing on March 20, 2017, where she now faces a statutory maximum of 160 years in federal prison. The staggering sentence reflects the severity of the charges, particularly the post-indictment witness tampering counts. Evidence showed Sledge attempted to influence potential witnesses after being indicted in 2012 and released on bond, pressuring them to lie to federal investigators and withhold cooperation.
“Using knowledge she gained as a company insider, this defendant was able to game the system, causing her employer to suffer millions of dollars in losses,” said U.S. Attorney Eileen M. Decker. “While her scheme went unnoticed for a period of time, her employer was able to uncover the conduct and referred the matter to federal authorities. This cooperation from the victim and a thorough investigation by law enforcement has resulted in this successful prosecution.”
Deirdre Fike, Assistant Director in Charge of the FBI’s Los Angeles Field Office, condemned Sledge’s abuse of her licensed authority as an insurance agent in California. “Defendant Sledge illegally misused the authority granted to her as a licensed insurance agent in California for her own personal gain, at the expense of her trusted employer,” Fike said. “In addition, the defendant’s brazen attempt of witness tampering to tilt the justice system in her favor further demonstrates her lack of respect for the rule of law.”
The investigation was jointly conducted by the U.S. Department of Labor – Office of Inspector General, the Federal Bureau of Investigation, and the California Department of Insurance. Two co-conspirators have already been prosecuted for their roles as fake employers and employees. Assistant U.S. Attorneys Vibhav Mittal and Joshua O. Mausner are handling the prosecution out of the Santa Ana Branch and General Crimes Section, respectively.
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Key Facts
- State: California
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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