Two women have been convicted in federal court for defrauding union and private health insurance firms out of $50 million for medically unnecessary procedures performed on insurance beneficiaries who received free or discounted liposuction, tummy tucks and boob jobs.
Meanwhile, an ex-insurance agent in Brea was convicted and sentenced to seven years in state prison recently for receiving more than $900,000 from fraudulent insurance policies that he spent on luxury high-rise apartments, travel, wine clubs and fine dining.
Which proves my theory the rich really are different than you and me.
Theresa Fisher, 45, of Tustin, Lindsay Hardgraves, 30, of San Pedro, and Vi Nguyen, 31, of Placentia, billed the International Longshore and Warehouse Union and Operating Engineers Union health plans, as well as Aetna and Anthem, for more than $71 million and received more than $50 million in payments, according to federal prosecutors.
But evidence showed that the insured "patients" were lured to a surgery center in Orange–variously known as Princess Cosmetic Surgery, Vista Surgical Center and Empire Surgical Center–by being told they could use their union or PPO health insurance plans to pay for cosmetic procedures that are generally not covered, the feds say.
Hardgraves was a marketer who found the "patients," while Fisher and Nguyen acted as consultants who scheduled procedures after coaching people to fabricate or exaggerate symptoms to get their medical procedures covered by their insurance, according to prosecutors, who add these "patients" underwent multiple medically unnecessary procedures such as endoscopies and colonoscopies that were billed to the insurance companies. Some cosmetic surgeries were billed to insurance companies as medically necessary, add prosecutors.
After a six-day trial, a jury found Fisher guilty of five counts of mail fraud and Hardgraves was convicted of two counts. Each count carries up to 20 years in prison, but the pair is scheduled to learn how long their stretches in Club Fed will be when U.S. District Court Judge Josephine Staton imposes their sentences on May 29.
Nguyen pleaded guilty in January to four counts of mail fraud and is scheduled to be sentenced on July 10.
Jacob Richard Bonzer, a former Lake Forest resident and insurance agent, pleaded guilty last week to 49 felony counts related to receiving more than $900,000 in commission and premium payments from fraudulent insurance policies and was sentenced to seven years in state prison.
The 28-year-old, who was living in Chicago where he was arrested by a U.S. Marshals task force last August, committed three separate crimes between 2009 and 2013, according to the Orange County District Attorney's office (OCDA), which participated with the Brea Police Department and the California Department of Insurance in a joint investigation of Bonzer.
On Aug. 4, 2009, Bonzer obtained his insurance license and was hired the next day by Farmers Insurance Group as a reserve agent at a FIG branch in Brea, says the OCDA, which adds he was terminated on July 31, 2010, for failing the company's career program.
After Bonzer's termination, FIG opened an investigation that found: 128 homeowner policies that listed their mailing address as Bonzer's office; no premium was ever collected by FIG on any of those policies; and the policies were validly issued but those insured did not own the properties, thereby making the policies fraudulent, the OCDA said.
Bonzer was paid and received commission from FIG for $46,000 for the fraudulent policies, and when the California Department of Insurance (CDI) received notification on Nov. 17, 2010, of Bonzer's termination, an investigation began.
Then, in September 2011, CDI received information that a citizen's name appeared on a FIG Memorandum of Fire Insurance for a property the person was never associated with. The policy showed that it involved another FIG agent, who investigators would learn had been approached by Bonzer on behalf of the mortgage processing firm CBG and Co. The thing is, CBG and Co. did not exist, but based on Bonzer's phony claims to the agent, 791 homeowner policies were bound, according to the OCDA.
None of the people in those policies owned the properties Bonzer listed, making them fraudulent, according to OCDA, which adds he and the other FIG agent split a full commission of $573,242. The agent later repaid Farmers his commission chargebacks of $333,489, but as with the previous case in Brea, Bonzer never returned his commissions, the OCDA says.
Bonzer created a fictitious insurance company by the name of GW Mutual Risk Retention Group, LLC in 2012 that he registered in Florida. GW Mutual is not licensed by California to write insurance nor to transaction business within the state, but Bonzer sold workers compensation and commercial insurance policies through his agency, Bonzer Insurance Brokerage, in South Orange County. He defrauded customers by using multiple P.O. boxes, virtual assistants, business entities, office spaces, e-mail accounts, website domains and bank accounts–and collected more than $632,000 in premiums from Golden State consumers who believed they were purchasing valid coverage.
When a customer questioned Bonzer about GW Mutual's ability to transact insurance in California, he provided a fraudulent CDI Report of Examination as proof.
He spent the money he received from premium payments on personal living expenses, including renting luxury high-rise apartments, travel, wine clubs and fine dining, the OCDA notes.
The 49 felony charges Bonzer pleaded guilty to included grand theft, forgery, transacting insurance business without certificate of authority, insurance fraud (45 counts!), with sentencing enhancements for aggravated white collar crime over $500,000, and a taking over $200,000. He was also ordered to pay $918,302 restitution to the victims.
On the bright side, he can join his prison's toilet wine club.