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Recent SEC Notices of Investigation: Embezzlement

July 12, 2010

In a July 9, 2010 8-K filing, UCI Medical Affiliates, Inc. (the “Company”) received an insurance settlement in the amount of $2,732,840.04 under a fidelity bond claim filed in connection with the $2,967,382 embezzled from the Company by Jerry F. Wells, Jr., the former Executive Vice-President of Finance, Chief Financial Officer, and Secretary of the Company. The insurance recovery reflects a reduction from the amount of the loss for the policy deductible and amounts recovered by the Company from Mr. Wells.

On July 23, 2009, Mr. Wells pled guilty in federal court to criminal charges for falsifying eight of the Company’s periodic reports filed with the Securities and Exchange Commission (the “SEC”). During the plea hearing, Mr. Wells admitted that from January 2003 through December 2008, he embezzled $2,967,382 from the Company by (1) using the Company’s corporate credit card to pay personal expenses; (2) preparing false expense reports and submitting them for reimbursement; and (3) submitting fraudulent check requests for non business expenses, such as construction work on his personal residences and payments on personal credit card accounts. Mr. Wells is presently awaiting sentencing by the United States District Court.

The misconduct of Mr. Wells was identified during the Company’s internal investigation announced on Forms 8-K filed by the Company on December 18, 2008 and January 15, 2009. On July 23, 2009, Unites States Attorney W. Walter Wilkins expressed his appreciation to the Company for its assistance and stated that “UCI uncovered the fraud and brought it to the attention of the SEC and the United States Attorney’s Office. During the resulting investigations of both the criminal and civil probes, UCI cooperated extensively, and it voluntarily provided all requested materials to federal investigators.”

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