MICHAEL DON HUTTON SENTENCED IN U.S. DISTRICT COURT

Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Billings, on January 3, 2007, before Senior U.S. District Judge Jack D. Shanstrom, MICHAEL DON HUTTON, a 59-year-old resident of Billings, appeared for sentencing. HUTTON was sentenced to a term of:

Prison: 36 months
Special Assessment: $300
Restitution: $185,505.14
Supervised Release: 3 years

HUTTON was sentenced in connection with his guilty plea wire fraud, mail fraud and money laundering.

In an Offer of Proof filed by the United States, the government stated it would have proved at trial the following:

HUTTON was the principal of M.D. HUTTON Insurance, an insurance agency in Billings.

Between approximately May 1, 1999, and May 20, 2004, HUTTON issued thirty-eight performance and payment bonds on behalf of St. Paul Mercury Insurance Company and St. Paul Fire and Marine Company (the "St. Paul insurance companies") to S.E., Incorporated ("SEI"). SEI paid HUTTON $160,152 for the bonds.

Testimony would have shown that HUTTON did not notify the St. Paul insurance companies that it had issued the bonds and kept the insurance premiums that he had collected from SEI on the policies.

HUTTON admitted that he had known it was wrong for him to issue the unreported bonds and to retain the premiums from the bonds.

Between approximately September 24, 2002, and May 25, 2004, HUTTON submitted twenty-eight premium financing agreements to Provident Financial, Inc. ("Provident"), on behalf of twelve customers to obtain loans purportedly to pay the customers' insurance premiums. HUTTON did not have the consent of the customers to obtain premium loans on their behalf.

HUTTON forged the names of the customers on the premium finance agreements and submitted them to Provident, which resulted in Provident creating a loan account number for each customer's loan.

When Provident provided the loan proceeds to HUTTON, he kept them. When Provident provided the loan proceeds directly to the insurance company to pay the premium, HUTTON instead kept some or all of the premium paid to him by the customer that was supposed to be paid the insurance company. HUTTON used some of these loan proceeds and premiums to make payments on the loans to Provident. HUTTON repaid most of the premium loans on behalf of the customers before he reasonably should have known that the offense was about to be detected by a government agency, leaving a total of $80,084 not repaid at that time.

On or about May 23, 2004, HUTTON mailed a check for $7,067.83 from a U.S. Bank account to Provident, which Provident cashed. HUTTON knew that he had obtained the money transferred by the check from Provident in the premium loan mail fraud scheme described above. HUTTON mailed the check with the intent to make a payment on unauthorized customer loans to promote the premium loan mail fraud scheme with Provident.

Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that HUTTON will likely serve all of the time imposed by the court. In the federal system, HUTTON does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.

First Assistant U.S. Attorney Kurt G. Alme prosecuted the case for the United States.

The investigation was conducted by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, and the Montana State Auditor's Office.

United States Attorney's Office for the District of Montana
P.O. Box 1478
Billings, MT 59103

CONTACT
Kurt Alme
First Assistant U.S. Attorney
(406) 246-4669