On behalf of Anaya-McKedy, P.C. posted in White Collar Crimes on Tuesday, April 12, 2011.
Usually when it comes to white collar crimes, federal prosecutors have spent months and even years building a case up against a suspect before the person is indicted. By that point, the prosecution likely has plenty of incriminating evidence against the person, so the person’s defense often becomes focused on negotiating the best plea bargain possible.
This may be the scenario for the suburban Denver man who was federally indicted last week on charges including 18 counts of money laundering, one count of mail fraud and one count of theft or embezzlement for allegedly operating a health plan scam in three states.
The 59-year-old owner and founder of Rural Health Plans Initiative Administration Company is accused of misrepresenting health plans and employee welfare plans throughout Colorado, Kansas and Oklahoma, the indictment said. The man is expected to make his first federal court appearance in the matter tomorrow.
Allegedly, the man took money from companies and employees who thought they were signing up for self-funded premiums with backup insurance for claims exceeding $25,000. In actuality, the backup policies didn’t kick in until the claims reached nearly $125,000, and the premiums were mingled in a central account.
The indictment says the men and his employees fallaciously stated that money paid by plan holders would be kept in separate trust accounts and used to pay the customer claims of individual health plans. However, Rural Health Plans Initiative Administration Company is accused of commingling money from different plans, which was in violation of the trust agreement.
The man is also accused of keeping the money paid by customers in an offshore bank account to avoid being regulated by Colorado law.
The Internal Revenue Service and the U.S. Employee Benefits Security Administration began to investigate after many employees had reported that their medical bills had never been paid for by their insurance.
The man accused could face 20 years in prison and millions of dollars in fines.
Source: ABC 7 News, “Colo. Health Plan Founder Indicted On Fraud, Embezzlement,” Alan Gathright, 4/5/2011.