The raging fire displaced two other couples who rented space. One tenant gave birth in the hospital the night of the fire, rendering her and the baby homeless. The insurer paid for the ruined house. Prosecutors allege this happened: Keller said she awoke at 2 a.m. to find the home afire. Yet photos were removed from the bedroom walls before the fire — there was no dark smoke outline on the wall around the photos to suggest they were present during the blaze. A woman with whom Keller’s husband was having an affair overheard Keller say she planned to burn down the place, during a heated conversation over a speaker phone. Keller also had two bags of dog food in her car trunk, plus a box of insurance paperwork, hair from a baby in a plastic bag, a baby’s tooth and photo album. The fire started around the dishwasher, Keller said. Yet the dishwasher didn’t cause the blaze nor were there “naturally present ignition sources,” investigators determined. Keller is charged with arson and insurance fraud. She faces up to 30 years in state prison if convicted.
Former president Donald Trump granted amnesty to at least five convicted fraudsters during his final weeks in office. Among the latest was a prolific Medicare scammer. Dr. Salomon E. Melgen was a major political donor and eye doc who ran a $73-million Medicare scheme in Florida. He fraudulently gave seniors excruciating eye tests, then inflicted painful and useless eye injections and laser blasts on their retinas. Melgen was handed 17 years in federal prison in 2017. His remaining prison sentence was commuted. In other fraudster amnesties:
· Phil Esformes. The president commuted the sentence of Phil Esformes on Dec. 22. The South Florida man launched a $1.3-billion Medicare-Medicaid scam involving false claims for skilled-nursing and assisted-living services — one of the largest insurance cons in history. Esformes received 20 years in federal prison, serving less than 4 ½ years.
· Sholam Weiss. The New York man received 835 years in federal prison in 2000 for siphoning millions from an insurer, leading to the collapse of National Heritage Life. It was the longest white-collar sentence ever, news reports say. Weiss’ sentence was commuted.
· Rick Renzi. The former three-term U.S. congressman from Arizona stole client premiums instead of buying coverage, diverted agency funds to his first election campaign, and traded his vote on a mine for a land deal. Renzi served a three-year prison term and was released in 2017. Renzi was pardoned.
· Alfonzo Costa. Trump pardoned the convicted dental scammer in December. The Pittsburgh man fraudulently billed insurers for phantom dental work. Costa was convicted in 2007, served two years of federal probation and paid nearly $300,000 in fines and restitution.
Bribery bamboozle: Chapter I. A federal lawsuit filed by convicted billionaire fraudster Greg Lindberg against North Carolina Insurance Commissioner Mike Causey was summarily dismissed by a federal judge. Lindberg sued only a few weeks after being convicted on March 5, 2020 of trying to bribe Causey to ease regulatory pressure on his struggling insurers in the state. Rather than taking the bribery bait, the Commissioner notified the FBI and recorded conversations leading to Lindberg’s conviction. Lindberg was sentenced to more than seven years in state prison last August — and then was enshrined in the Insurance Fraud Hall of Shame. A federal judge recently threw out Lindberg’s civil suit alleging Causey conspired against him. Lindberg’s appeal of his state criminal sentence is pending.
Bribery bamboozle: Chapter II. Lindberg also faces a federal investigation into suspected financial fraud in his struggling empire, plus lawsuits by his own insurers. The state insurance department took over Lindberg’s insurers last year amid liquidity concerns. Now the insurers, with a state-appointed rehabilitator calling the shots, have sued Lindberg. They allege Lindberg funneled money to himself instead of reinvesting cash in the struggling insurers. These four insurers allegedly face a potential shortfall of more than $1 billion. Policyholders and creditors are threatened with “severe losses,” says the newly unsealed civil complaint. Lindberg also faces federal bribery charges plus the fraud investigation — on top of his state conviction.
Nearly two decades in federal prison await pharmacy owner Wade Walters for his central role in a $510-million attempted theft from the health program for military service members. It was likely the largest insurance scheme in Mississippi history, the feds say. Walters ran the pharmacy in Hattiesburg. It was the distribution hub for expensive and unneeded compound creams. Walters and his cronies maneuvered the highest reimbursements without regard for medical need. Recruiters obtained prescriptions for high-margin compound meds. Docs were bribed to issue the scripts. The ring illegally waived or reduced copays to convince beneficiaries to take part. Shell firms and overseas accounts hid the stolen money. Walters’ ring stole so much money that TRICARE had to cut back its healthcare offerings and ask the feds for more money. Walters pled guilty, was handed 18 years in federal prison and must repay $287.7 million.
Trying to boost prescription sales, two pharmacies paid illegal kickbacks to have prescriptions routed through the firms in the Bronx and Union City, N.Y. About $65 million of reimbursement payments from Medicare, Medicaid and private insurers were for meds that Prime Aid Pharmacies didn’t give to patients, and didn’t order or have in stock. Bribes included expensive meals and designer bags, plus cash, checks and wire transfers. Alex Fleyshmakher is the pharma owner Igor’s son. Alex and cronies cashed millions of dollars of insurance checks at a Brooklyn check-cashing firm, or diverted them through Canadian bank accounts back into U.S. accounts he owned. Fleyshmakher pled guilty to federal charges and will be sentenced in May. Igor earlier pled guilty, along with others. More suspects await trial.
Rodney L. Stevenson II ran a fake website that peddled nonexistent N95 masks, the feds charge in San Francisco. Stevenson ran EM General, which claimed to sell coveted N95 masks with N99 filters. As charged: EM General sold many masks for up to $24.95 each. Stevenson created a professional-looking website that included the names, backstories, and stock photos of fake EM General executives. The site falsely described how long the firm was in business, its sales volume and reputation. EM General sold $3.5 million of masks to more than 25,000 customers, yet never delivered the equipment. When customers complained, Stevenson lied that EM General couldn’t offer refunds but that masks would ship soon. Stevenson then sent lower-quality masks to some customers. He faces multiple federal charges.
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