The Alabama scandal, ironically, dates to the 1990s, about the time that signs of improper conduct from assistant football coach Jerry Sandusky were first seen--and mostly ignored--at Penn State.
Financial crimes are at the heart of the Alabama story, and that clearly is not as titillating as the stories of child rape in an on-campus shower facility at Penn State. But in some respects, the Alabama scandal is even more shocking than the one at Penn State--and that's because it involves an individual who wields way more power at UA than Jerry Sandusky ever dreamed of at PSU.
Here's another difference about the two scandals: Sandusky has already been tried and convicted in the court of public opinion, but under U.S. law, he must be presumed innocent. In fact, Sandusky and his lawyer stated in an interview with NBC's Bob Costas that the coach, in fact, is innocent. Many Americans probably are not buying that story, but the possibility remains that Sandusky could be found not guilty of the charges against him.
That won't happen in the Alabama scandal. A federal jury in Pennsylvania already has voted guilty on all 135 counts in the Allen W. Stewart case, and the verdict has been upheld by appellate courts. 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 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.
In a previous post, here is how we described Alabama Re's role in the Stewart case:
It's not as if serious doubt exists about Bryant's connections to fraud. . . . 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. And we quote from a pertinent section of that ruling, encompassed in footnote 11:
11. The relevant portions of the charge read as follows:
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.
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