Second Person Pleads Guilty In Smart Data Solutions, LLC, National Healthcare Benefits Scheme
More Than 17,000 Victims Defrauded
William M. Worthy, II, 53, of Isle of Palms, South Carolina, pleaded guilty today to federal charges arising from a national health care benefits scheme that defrauded more than 17,000 victims, announced David Rivera, United States Attorney.
During a hearing before U.S. District Court Judge Aleta A. Trauger, Worthy pleaded guilty to one count of wire fraud and one count of conspiring to commit mail fraud, wire fraud, health plan embezzlement, and money laundering. At the plea hearing Worthy admitted participating in a scheme designed to defraud thousands of individuals who purchased purported health care coverage from Worthy and his co-conspirators. Worthy acknowledged his role in promoting and selling the health care plans not backed by insurance companies, which were marketed by Smart Data Solutions, LLC (ASDS@), a company located in Springfield, Tennessee owned and managed by Bart Sidney Posey, Sr., who is charged as a co-conspirator in this case. Worthy also admitted that he and his co-conspirators embezzled funds from premiums paid by individuals who had signed up for these unauthorized health plans, diverting more than $5.4 million in premiums for their own personal use. He further admitted that the majority of claims submitted in connection with these unauthorized health plans were never paid and accepted responsibility for more than $7.3 million of losses from the fraud.
Worthy is scheduled to be sentenced by Judge Trauger on January 21, 2016. He faces up to 20 years in prison on the wire fraud charge and up to 5 years in prison on the conspiracy charge. Worthy will also be ordered to pay restitution to the victims of the fraud schemes and will face forfeiture of the proceeds of his crimes.
On August 14, 2015, Kathleen Devereaux Cauthen, 45, formerly a licensed attorney in South Carolina, pleaded guilty to misprision of a felony in connection with this same conspiracy and fraud scheme. During a hearing before Judge Trauger, Cauthen admitted she helped to conceal this fraud scheme by handling certain corporate filings, by posing as counsel for a sham insurance company and by operating and managing bank accounts used to receive health plan payments. Cauthen is scheduled to be sentenced on August 29, 2016, by Judge Trauger and faces up to three years in prison and restitution to the victims of her offense.
Worthy was indicted in connection with this scheme in June 2013. Also indicted were Bart Sidney Posey, Sr., 48, and Angela Slavey Posey, 48, both of Springfield, Tennessee and Richard Hall Bachman, 67, of Austin, Texas. Charges against Bart and Angela Posey and Bachman remain pending.
An indictment is merely an allegation and is not evidence of guilt, and these defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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 and Office of Inspector General; the United States Secret Service; the Internal Revenue Service - Criminal Investigation; and the Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and William F. Abely and by Senior Trial Attorney Nicholas S. Acker of the U.S. Department of Justice Fraud Section.