Four Charged With Defrauding More Than 17,000 VictimsIn National Health Care Benefits Scheme
57-Count Indictment Alleges Over $28 Million Fraud
Bart Sidney Posey, Sr., 46, and Angela Slavey Posey, 46, both of Springfield, Tennessee; William M. Worthy, II, 50, of Isle of Palms, South Carolina; and Richard Hall Bachman, 65, of Austin, Texas, were indicted by a federal grand jury in Nashville, Tennessee on June 26, 2013 for their roles in a national health care scheme that defrauded more than 17,000 victims of more than $28 million in health benefit plan premiums, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee. The defendants face a 57- count indictment, which alleges an extensive national health insurance fraud scheme that includes charges of conspiracy, wire and mail fraud, embezzlement from a health care benefit plan, and money laundering.
Bart and Angela Posey were the owners and operators of Smart Data Solutions, LLC and other related entities, operating out of Springfield, Tennessee. Richard Bachman was a business associate of Bart and Angela Posey and Vice-President of Smart Data Solutions. William Worthy promoted himself as an insurance consultant and representative of Beema/Serve America, a foreign insurance entity.
The indictment alleges that Serve America, a “shell” company, was promoted as the underwriter for insurance policies sold to the public, however, the company was not licensed to operate in any state. Smart Data Solutions LLC, operated as the benefits administrator for Serve America and related entities. In 2010, Smart Data and its related entities were seized and liquidated by the State of Tennessee after the Davidson County Chancery Court found that these entities were acting as an unlicensed insurance company and posed a significant hazard to the public.
The indictment alleges that at various times and through various business entities, from January 2008 through July 2010, the defendants conspired and engaged in schemes to defraud persons seeking health care insurance. The defendants purported to provide health care coverage but instead operated in a manner to purposely evade state and federal regulations. They collectively operated as unlicensed, unregulated and fraudulent insurance companies, collected more than $28 million in premiums for health care coverage, and then denied or unjustly rejected legitimate claims submitted by participants.
The indictment also alleges that the defendants embezzled funds from the premiums paid by the participants that were intended to be used to pay eligible health care claims. The majority of the claims were not paid and during the scheme, the defendants diverted more than $5.4 million in premiums for their personal use.
“It is a priority of the U.S. Attorney’s Office to pursue those who demonstrate a willingness to steal from individuals who are at the most vulnerable period of their lives-a time when they need health care coverage,” said Acting U.S. Attorney David Rivera. “The magnitude of this fraud and the vast number of victims left in its wake is astounding. Even though the scheme is extensive and complicated, this indictment should serve as notice that we and our law enforcement partners will dedicate the necessary resources to meticulously dismantle such criminal enterprises and see that justice is properly served.”
“The U.S. Postal Inspection Service, working with our law enforcement partners and the U.S. Attorney's office, will aggressively pursue those who utilize the U.S. Mails to defraud innocent victims and bring them to justice,” said B.K. Morris, Inspector in Charge, Atlanta Division.
“Confronting those who commit fraud and use criminal schemes to take advantage of innocent victims is a priority for the FBI, especially when it involves the health care of our community,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The indictment announced today illustrate the combined commitment and effort of the FBI and our law enforcement partners to protect the safety and well-being of the public as well as the health care products they rely upon.”
"Theft of employee benefit assets jeopardizes the health security of workers,” said Isabel Colon, Regional Director of EBSA's Atlanta Regional Office. “This case reaffirms the Labor Department's commitment to protect workers' benefits by identifying criminal activity wherever and whenever it occurs. This investigation was part of the U.S. Department of Labor’s Health Benefits Security Project, which focuses on egregious and corrupt health arrangements and seeks to identify potential criminal violations and to assist the victims of crimes related to employee health benefits.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people's money," said Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable."
“Today’s indictments demonstrate the OIG’s commitment to investigating health care fraud schemes involving employee benefit plans. We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate these types of schemes,” said Richard Walker, the Special Agent-in-Charge of the Atlanta Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
If convicted, the defendants face up to 20 years in prison on the wire and mail fraud counts; 10 years in prison on the health care embezzlement and money laundering counts; and five years in prison on the conspiracy counts; and a $250,000 fine per count. Any sentence following conviction will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This case is being investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, the United States Department of Labor Employee Benefits Security Administration - Office of Inspector General, the United States Secret Service, the Internal Revenue Service - Criminal Investigation, and the State of Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and John K. Webb.
An indictment is merely an allegation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty at trial at which, the government would bear the burden of proof beyond a reasonable doubt as to each count of the indictment.