Bil Browning

UPDATED: Prominent Midwestern LGBT Activist Accused of Embezzling $5.9 Million

Filed By Bil Browning | October 02, 2009 4:00 PM | comments

Filed in: Marriage Equality, Politics, Site News
Tags: Aviva, embezzlement of AIDS funds, Indianapolis Life, insurance fraud, Marla Stevens, Marriage Equality USA, One Iowa, Phyllis Stevens

Editor's Note: Contributor Marla Stevens was the first person to join Bilerico as a contributor in April 2005. Neither she nor her wife, Phyllis Stevens, have donated any money to Bilerico Project.

UPDATED AT THE END OF THE POSTPhyllis_Marla_Stevens.jpg

Phyllis Stevens, chairperson of the Iowa chapter of Marriage Equality USA, was arrested late last week on charges of embezzling $5.9 million dollars from her employer, insurance company Aviva USA. Her wife, Bilerico Project contributor Marla Stevens, has been named in a civil suit filed by the company for benefitting "as a result of the conversion of funds."

Phyllis and Marla Stevens are former Indianapolis residents and were active for several years in Indiana LGBT politics. Phyllis worked for Indianapolis Life; the couple relocated to Des Moines when the company merged with Aviva USA.

The women are accused of donating large portions of the stolen money to LGBT causes and progressive politicians including former presidential candidates Hillary Clinton and John Edwards along with Congress members Dennis Kucinich (Ohio), Niki Tsongas (Massachusetts), and Andre Carson (Indiana). Records show the couple donated more than $175,000 to state and federal Democratic candidates in the 2006 and 2008 election cycles.

Details about the alleged theft after the jump.

The Police Case Against Phyllis Stevens

Authorities arrested Phyllis Stevens Friday in Las Vegas and charged her with money laundering and wire fraud. She is currently in US Marshals' custody.

According to the Des Moines Register, the thefts happened over a five year period. Phyllis "allegedly devised a program to have fictitious agent commission payments paid by Aviva into a bank account jointly held by the two women." In an affidavit filed with the criminal complaint, FBI special agent Kevin Kohler described how the theft was discovered.

Stevens' scheme was discovered [by] an Aviva employee, Alisha Wittstruck, in the company's Topeka office during a review of a report of policies that had lapsed. When a policy lapses, agents are required to pay back a portion of the commission they collected.

Wittstruck noted that a $62,112 commission had been paid on the recently lapsed policy and that "this commission was many times greater than the policy premium." The commission was credited to an agent listed as Mark Peoples.

After investigation of the claim, company officials discovered that the company had paid $1.7 million during the past year in commissions to Peoples' agent account. Peoples had been employed by the company, but had never previously received any commissions. In addition, company officials discovered that the home address used for Peoples matched Stevens' home address in West Des Moines.

Company officials placed Stevens on leave Sept. 23 after confronting her with the situation. Stevens denied any wrongdoing. She was escorted from the building. Stevens then traveled to Indianapolis where she attempted to obtain $170,000 in cash for what she told an official at a branch of National City Bank that "she was trying to obtain as much cash and traveler's checks as possible because she and her partner were planning to travel to Germany."

A History of LGBT Activism

marlajer-columbus.jpgBoth Marla and Phyllis Stevens have a well-respected history of LGBT and progressive activism. Marla founded one of Indiana's first gay rights organizations, LGBT Fairness, and was the first Statehouse lobbyist focusing solely on LGBT issues. Marla was also one of the first Hoosier LGBT activist to use direct action techniques to draw attention to gay rights.

When Columbus, Indiana-based Cummins Engine Company announced in 2000 that it would offer domestic partner benefits to its employees, the religious right organized a "prayer gathering" outside of the company's headquarters. Marla joined Bilerico-Indiana contributor Chris Douglas to help Jerame Davis and I organize a counter rally in a local park that drew hundreds of Columbus residents and LGBT people from across the state.

In the picture, Jerame is speaking at a press conference held on the steps of Columbus City Hall. Marla is in the background with other invited state leaders that spoke at the media event. The counter rally was the largest LGBT protest in Indiana for several years and generated quite a bit of positive press.

Phyllis Stevens has been financially supportive of several LGBT friendly politicians. In May she created the Rainbow Equality PAC which has given money to prominent Democratic politicians like Speaker of the Iowa House Pat Murphy. Finance records show that since October of 2005, she gave $14,669.07 in state political contributions. Since January of 2007, she has donated $15,213 to federal candidates.

It remains to be seen if there will be any political repercussions for politicians who have accepted donations from the couple. The Iowa Republican, however, is already trying to tie the state's largest LGBT organization, One Iowa, and the recent Supreme Court ruling to the alleged crime in an attempt to buoy support for a same-sex marriage amendment.

Complicating matters will be the couple's tax filings. Since being married in Canada in 2003, they have filed federal taxes as "married" every year and refuse to say they are single for tax purposes.

Update from One Iowa spokesperson, Justin Uebelhor:

I came across your blog posting about Marla and Phyllis Stevens. I want to clarify one thing. The Iowa Republican blog post you link to is wholly inaccurate. Their main contention is false: the LGBT Fairness Fund is not affiliated with One Iowa or our PAC in any way.

The LGBT Fairness Fund appears to be a federal PAC based in Indiana that can give to federal candidates. The Fairness Fund PAC (the political arm of One Iowa) is an Iowa registered state PAC that can only give to candidates for state office. There is no connection between our PACs, nor has Marla ever been employed by our PAC.

Here are copies of the criminal complaint against Phyllis Stevens [pdf] and the civil complaint filed against Phyllis and Marla Stevens [pdf].

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Its awful to think that one of our own partners in this struggle for Equality have been unethical, but gays and lesbians are humans complete with all human virtues and vices. We got a few bad apples--and even some that don't seem so on the surface.

I do hope that we wake up and take stock when things like this happen. When we allow ourselves to fall victim to our darker side (I'm not talking a little spanking and role-play, I'm talking stealing and lying), we always inevitably get caught. When we do--the Far Right does not see us as individuals--we become posterchildren for the entire movement. When one of us runs a charity that raises millions for the poor and destitute, they don't associate that person with the LGBT community. But when one of us steals millions, they do.

We need to strive to be better than. Live your life on the 'up-and-up.' When you don't steal or lie you don't have so many stories to have to keep straight. You have a lot better peace of mind. Be honest, fair, ethical and just.

Finally, though, everyone is innocent until proven guilty--whether they be a former Justice Department official or an LGBT activist. Though I took this opportunity to say something that I've been ITCHING to say since Sam Adams, I don't think that an investigation a conviction does make. The amount makes it unlikely that there IS REALLY any sort of alternative story... but let's remember that everyone--including our worst enemies and our best friends--are innocent until proven guilty.

Disheartening, based on what is known so far.

I have more questions than answers at this point. A couple hundred thousand in political contributions is certainly a lot for 2 election cycles, and yet it's still a small piece of $6 million.

And, with their writings on income tax, they would have understood that the commission payments to a fictitious agent would be reported to the IRS, which would have looked for tax returns.

Finally, it makes no sense that a thinking person, after being notified of being under suspicion, would try to withdraw $170K in cash, under the guise of preparing to leave the country.

If they have done this it is going to give us all a big black eye. Too bad.

Chitown Kev | October 1, 2009 9:51 PM

This does not look good.

Robert Ganshorn Robert Ganshorn | October 1, 2009 10:56 PM

I guess what I am reading is that National City Bank is associated with Aviva? Did she have an account at National City or was she attempting to borrow against real estate in Indiana? I do not get the connection with the $170,000.00.

Why was she lingering in Las Vegas? Where is Marla and how is she doing.

Phyllis has broken faith and trust with us. We more than anyone should know the importance of being "squeeky clean." It is hard to give away all of 5.9 million "under the radar" in five years and a full accounting needs to be done of which assets were moved where and how much is offshore, if any.

Bil, I am very sorry for how you and Jerame must be feeling right now. It must be an awful personal letdown. I hope that Marla has no fingerprints on anything that can harm her.

In so many relationships there is a full division of responsibilities and she could literally have not known what her partner was doing. This is the flip side of "marriage equality" some may not wish to consider, but I would think that a bright tax attorney could help Marla refile her old joint tax statements to a good effect. They were probably in IRS dispute anyway. She will pay a penalty, but a smaller one than being entangled in this.

And what do they call it when it goes the other way: insurance companies stealing from us and "donating" money to protect their favorite?

Stay on message, folks.

Nick, I get what you're saying. However, if this is true (and noone has been convicted yet), this is not a matter of righteous civil disobedience, this is a matter of theft. You can't take what's not yours without permission--there can't be any moral relitivism there. It doesn't make what the insurance companies do right, but we don't UNDO injustice by getting OUR hands dirty. We need to stay above the fray.

If we want to prove to America that we deserve full participation in the system (flawed as it is) then we need to show we're willing to play by the rules (even when they favor the rich) and if we don't like a law we have to show we understand we know how to and have the maturity to work within the system to change it. We really have to stay clean because everything like this is fodder the right can use against us. Its not fair but it is what it is. Recognize it be be smart and agile enough to do the right thing rather than just lash out and break the law when all odds are against you.

I don't know that Nick is arguing on behalf of righteous civil disobedience. I'd read his note a bit more carefully. Maybe I'm wrong, and Nick can correct me, but I believe he *is* referring to it as theft.

As for: "Recognize it be be smart and agile enough to do the right thing rather than just lash out and break the law when all odds are against you." Where is this coming from? Who's lashed out when the odds are against them?

On a related note, I'm not sure why we're all going on about how teh gayz need to be held to greater standards than others, or need to worry more about our tainted relationships to things like money or, well, relationships (one of the ongoing threads in this discussion). Really? Why? The narrative of exceptionalism overdetermines gay organising, and it is always doomed to fail.

I'd stop worrying about proving how we're so much better than others. Embrace our fallibility - after all, isn't the aim of the "movement" to prove how we're "just like everyone else?" But, oh right, then we'd have to admit that the politics of inclusion that we crave so desperately is in itself flawed, yes?

A little less self-righteousness might be in order.

gregorybrown | October 2, 2009 10:13 AM

It's unfortunate that somebody with what seems to be good intentions and great energy should have used part of that energy to steal money from her employer. But it proves the point that LGBTQ folks are neither better nor worse than anybody else in matters of good judgment, fiduciary responsibility--or making and maintaining good marriages, however that's defined. If we're really concerned about becoming full participants in our political/social/cultural community that encompasses everybody, everyone has to behave responsibly, and recognize that there are bad apples among the fruit bowl, and press on anyway.

Yasmin is correct -- I'm not suggesting that this is an act of righteous civil disobedience or comparing either of them to Robin Hood. I'd hardly say that donating money to Hillary Clinton counts as giving to the poor, and donating money to politicians in general sounds more like civil obedience than disobedience to me.

What I am saying is that their theft isn't going to make the community look bad, whatever that means. What is actually harmful is all this hemming and hawing and rushing to condemn this act and trying to separate the good queers from the bad -- instead of just saying: "Look, let's talk about the real issue here, which is that every day insurance companies are spending millions of dollars to buy political votes so they can continue to fuck over people living in this country. And queers and other marginalized folks are disproportionately affected by this violent greed, paying for it with our lives."

That's what I mean by stay on message. Efforts to make a distinction between Marla and the "law-abiding" rest of the community are silly and futile - that's the battle they want you to be fighting. It's a great distraction.

Robert Ganshorn Robert Ganshorn | October 2, 2009 7:23 AM

What Nick is talking about are the donations given by insurance companies and other corporations to various political candidates of both major parties. It is public record who donates what to whom.

By choosing to work for an insurance company in a position of trust and breaking faith with them as an employee she is not Robin Hood, but Benedict Arnold to have donated any of those illegal proceeds to Gay orgs or affirming candidates. (Assuming this is so in the end)

How easily with the next lesbian, trans, Gay or Bi person advance in this company or any related company that hears of this? This is just the sort of thing that hurts our brothers and sisters and keeps us in the outer circle. I know that to you corporate America is the enemy and let anarchy rule. If we want laws changed in our favor we had better be seen to be law abiding ourselves.

In a civil rights struggle we had better damn well be clean even if we are fallible humans and this is an absolutely clear line not to cross.

Robert Ganshorn Robert Ganshorn | October 2, 2009 7:59 AM

I note that in "Advance Indiana" that the proceeds of the "misdirection" of commissions were deposited at a bank in Indianapolis which has now frozen this account.

1. Stealing is wrong and illegal.

2. A person is innocent until proven guilty by their peers.

3. Yes, the allegation of their actions gives us all a black eye. The wingnutz will use it to condem all GLBT friendly legislation and activites and use it to work to undo it all.

4. If it is true that they did give major funding to help GLBT causes in Iowa, who does it really condem? Them? Yes. But also it condems the entire political process in Iowa. Iowa is up for sale. If you got the bucks you got your law. I guess it is true that the entire US Government from brough to national is run by the highest bidder with the most bucks.

Robert Ganshorn Robert Ganshorn | October 2, 2009 10:23 AM

I also noticed that they had just bought a $380,000.00 house in Iowa in the "Advance Indiana" article which seems to be doing all they can to distance themselves from Marla's past political activity in Indiana. They even suggested that many were glad to see her leave Indiana for Iowa. Perhaps Bil can enlighten us on their motivations.

In Iowa $380,000.00 is a LOT of house and it was lived in by both of them. But Gina, don't lose heart, political donations to proper grass roots candidates who are inclusive is different from more money just going to the same interests.

Gary's comments have more to do with his grudge against Marla for spilling the beans about Gary's chosen candidate in a primary race against Rep Julia Carson. Gary has a deep seated hatred of the Carsons and anything that touches them is automatically the target of his ire.

Well, I'm not denying that we live in a society that is less than ideal, and that some of the institutions we're trying to gain access to are flawed. We can discuss whether or not those institutions are worth joining in another topic. I think you've got a point. However, I STILL don't agree that just because there's injustice in the system that you completely opt out of the system and make your own rules. What system does not have injustice? Where have they gotten it right yet? I certainly think a lot of us would jump ship if we could figure that out.

Flawed and all, I think if we live here now, we need to try to abide by the rules of the game as best as we can--not because we're just going to accept things as they are will always be, but because you can't change the rules until you know them inside and out and can make a real, principled argument for their change.

I think everyone should strive to be a better person every day--I should try to help more people every day, I should strive to destroy more of my ego every day (which is a task, because my ego is enormous!), we should try to be better role models to others every day, be kinder to strangers more every day, love our loved ones more every day.

In short, whether or not you agree with me that LGBT people need to be better than straight folk, we should certainly all try to be better than ourselves every day. And if we try that, we WILL become ideal citizens. They can't deny us equality very long if we live in THEIR society more peacefully and justly than THEY do.

Robert Ganshorn Robert Ganshorn | October 2, 2009 10:30 AM

Phil, you are being too introspective. You were right the first time. We must be a country of laws, we must obey laws we do not even agree with if we wish to have an influence on changing laws.

In this case theft is theft (if it is proven) and anyone willing to state that they have an out sized ego is pretty well balanced in my book.

The Iowa Republican blog post linked to here is wholly inaccurate. Their main contention is false: the LGBT Fairness Fund is not affiliated with One Iowa or our PAC in any way.

The LGBT Fairness Fund appears to be a federal PAC based in Indiana that can give to federal candidates. The Fairness Fund PAC (the political arm of One Iowa) is an Iowa registered state PAC that can only give to candidates for state office. There is no connection between our PACs, nor has Marla ever been employed by our PAC.

Totally innocent until proven guilty. But after looking back at the insane writings of Marla Stevens, it wouldn't surprise me a bit. (And ANYONE who gave money to John Edwards should be in prison just for the stupidity of it).

Phil is correct. The conservatives will use this against you and paint all LGBT activists as if they were thieves. It's what they do now. Aren't all LGBT people pedophiles? Like it or not, it's the reality of dealing with people who hate you and will lie to promote their hate.

Oh that poor insurance company -- I shed tears every time an insurance company loses a few million...

Robert Ganshorn Robert Ganshorn | October 5, 2009 9:18 PM

Those would be crocodile tears? :)

So it is all right to steal money from where your grandmother has her insurance annuity providing her with monthly income?

Think carefully before you ask for anything sweet from granny again. Yes Mattilda, I read your site.