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Keeping watch on those who hold the public trust and money

Told firm might be flouting laws, Insurance chief Hudgens didn’t act


Phil Loy used to work in Woodstock and would drive past Jim Torchia’s office building nearly every day. It made Loy madder and madder.

Loy works in the life settlements business, where investors buy rights to life insurance policies from the dying and the elderly, giving them fast cash, then raking in profits when the person dies.

Torchia works in that industry, too, but Loy said his company was acquiring policies without having any state licenses, which involve extensive background checks and can cost a company hundreds of thousands of dollars per year to maintain.

So he reported Torchia to a man he thought would do something about it – Georgia Insurance Commissioner Ralph Hudgens.

Loy had donated thousands of dollars to the commissioner’s campaign but that wouldn't make any difference in spurring him to take action on a law he was elected to enforce.

Soon after Hudgens took office in 2011, Loy said he reported to him that Torchia was operating without a license. Then he asked what he was doing about it, over and over again at campaign functions, barbeques and industry meetings.

"I used to ask him every time I’d see him," Loy said. "I was like your rude neighbor or something."

Hudgens would just say, "We’re looking into it," Loy said.

"But I never got the sense that he actually was looking into it."

Flash forward to 2016, and the federal Securities and Exchange Commission has filed suit against Torchia, alleging his Credit Nation empire of companies amounts to an elaborate Ponzi scheme, saying hundreds of investors throughout the country are at risk of losing their savings.

The government claims businesses under Credit Nation’s umbrella have debts exceeding assets by millions of dollars. Torchia, the feds allege, treated investors' money like a “personal piggy bank,” transferring funds to himself, casinos, his Canton home, and making loans to his son’s auto dealership.

Torchia denies misappropriating investor funds and disputes that his companies are financially unsustainable. The SEC just doesn’t understand how to value policies or how the business works, Torchia said.

Loy’s tip wasn’t all the state Insurance office had on Credit Nation. Investigators had found other evidence, yet the department never acted, an investigation by The Atlanta Journal-Constitution revealed.

Read what the AJC found, who might have been placed at risk by the state's lack of action, and how Hudgens played a role in passing the very laws he failed to enforce, in this in-depth story from Sunday’s newspaper.


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About the Author

Johnny Edwards is a member of the AJC’s investigative team, focusing on the private sector and state and federal regulation. He has worked at the newspaper since 2010.