John Mathis "Matt" Lile III of Little Rock was sentenced Wednesday to a year and a day in federal prison for embezzling a health care benefit program's funds to pay for family vacations to Italy and other places, as well as cruises, tanning salon visits and shopping excursions.
Lile, 56, pleaded guilty Sept. 19 to one of two charges he faced of theft or embezzlement in connection with health care. He admitted that between March 2006 and February 2009, while he was president of Little Rock-based Cosmopolitan Life Insurance Co., he used an American Express card designated for business expenses to charge more than $100,000 in personal expenses.
He also was the president, chief executive officer and chairman of the Advanced Insurance Brokerage of America -- also known as Advanced Insurance Group of America -- which functioned as an intermediary between the small businesses and Cosmopolitan by filing and paying health care claims for the businesses and collecting insurance premiums.
His credit card expenses were paid each month by Cosmopolitan or the intermediary business, according to an indictment handed up April 3, 2013.
A plea agreement Lile signed in September called for the year-and-a-day sentence if the deal was accepted by U.S. District Judge Susan Webber Wright after she reviewed a pre-sentence report.
Wright approved the agreement Wednesday. If she had refused to accept it, Lile was entitled to withdraw his guilty plea and go to trial.
Because the sentence exceeds a year in prison, it allows Lile to earn credit for good behavior, which means he may be released before serving a full year.
He is scheduled to report to prison Oct. 13. If he had been sentenced to a year in prison, he might serve a longer sentence because he wouldn't be entitled to good-time credit.
In addition to the prison term, Wright ordered Lile to pay $118,500 in restitution to Cosmopolitan, which is now in receivership with the Arkansas Insurance Department, and to serve three years of probation after his prison term.
The charge to which Lile pleaded guilty was punishable under federal statutes by up to 10 years in prison and a fine of up to $250,000.
"Matt Lile treated Cosmopolitan like his own personal piggy bank," U.S. Attorney Chris Thyer said Wednesday in a news release he issued with David Resch, special agent in charge of the Little Rock field office of the FBI, and Deborah Perry, regional director of the U.S. Department of Labor, Employee Benefits Security Administration.
"I hope this sends a clear message to all who sponsor or transact business with employee benefit plans that the federal government will aggressively pursue those who commit crimes against employees and retirees of private-sector health and pension plans," Perry said.
Metro on 07/23/2015