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Press Release

Owner And Operator Of New Jersey-Based Real Benefits Association LLC Admits Selling Bogus Health Insurance

For Immediate Release
U.S. Attorney's Office, District of New Jersey

TRENTON, N.J. - An insurance broker who allegedly stole nearly $1 million while continuing  to sell health care coverage he knew was fake pleaded guilty today in connection with the scheme, U.S. Attorney Paul J. Fishman announced.
David Clark, 70, of Morristown,  N.J., entered his guilty plea to an information, charging him with conspiracy to commit wire fraud, before U.S. District Judge Michael Shipp in Trenton federal court.
According to documents filed in this case and statements made in court:

Clark owned and operated Real Benefits Association, LLC (RBA), a New Jersey limited liability company he incorporated on Dec. 17, 2003, under a similar name. Clark established RBA as a purported labor organization and as a way to market and sell health insurance to the general public through the RBA Welfare Plan. Initially, the Welfare Plan was fully insured through Perfect Health, a licensed New York insurance company. Participants paid insurance premiums to bank accounts of RBA and/or the Welfare Plan, which Clark then remitted to Perfect Health. 

Perfect Health was purchased by Health Insurance Programs (HIP) in 2008, and HIP discontinued its insurance policy with the RBA Welfare Plan. The federal government notified Clark that RBA did not qualify as a labor organization and was required to cease operating.

 Nonetheless, Clark continued to market and sell the health insurance plans to unsuspecting participants. Eventually participants began to complain to their respective state insurance departments when their medical claims were not being paid, which prompted various departments throughout the United States to issue cease and desist orders.

Clark and conspirators continued to market and sell bogus health insurance, and from December 2008 to July 2011, they collected approximately $1,789,596 in premiums for RBA health insurance coverage. Clark diverted approximately $962,027 from the premiums paid by RBA participants for his personal use, including by using victims’ premiums to fund personal debit and credit card purchases, college tuition payments and deposits to a relative’s bank account.
The conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is currently scheduled for Aug. 20, 2014.

U.S. Attorney Fishman credited special agents of the U. S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia; and  the U.S. Department of Labor Employee Benefits Security Administration (EBSA), under Jonathan Kay, Regional Director; as well as postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates, with the investigation leading to the plea.
The government is represented by Assistant U.S. Attorney Michael H. Robertson of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.
If you have information or think you might be a victim of this scheme, please contact (866) 444-3272 to speak to an EBSA benefits advisor.


Defense counsel: John P. McDonald Esq.; Somerville, N.J.

Clark, David Information

Updated August 21, 2015