A 70 year old man from Morristown was held guilty on charges of fraud in federal court on Wednesday. He was charged with stealing approximately 1 million U.S. Dollars from people by duping them and selling them bogus health insurance plans.
The convicted man (David Clark) pleaded guilty on charges of fraud and conspiracy to commit wire fraud. The proceedings of the court were controlled by U.S. District Judge Michael Shipp.
U.S. Attorney, Paul J. Fishman revealed that David Clark and his co-conspirators stole more than 1 million U.S. Dollars by selling bogus health insurance plans to more than 25000 individuals in many states including New Jersey.
Clark and his co-conspirators, managed their activities through a firm called Real
Benefits Associations. Clark founded the company and registered it as a labor organization that aimed at selling health insurances through RBA Welfare Plan. Later it was revealed that the company had no license to sell insurance policies to anyone in any of the states.
The Welfare Plans of RBA were initially legitimate as they were supported by Perfect Health which was a licensed insurance company. But in 2008 another company known as Health Insurance Plans purchased Perfect Health and then discontinued all of its policies. The concerned department took appropriate action and sent multiple notices to Clark informing about the merger and asking him to stop all of his activities. But even after repeated warnings, clark and his co-conspirators didn’t ceased their operations.
It is alleged that Clark ignored all the notices from the federal government and continued to sell the insurance plans to unsuspecting customers. He allegedly continued this for another 4 years and raked in more than a million U.S. Dollars.
The money collected from customers was used by Clark and his co-conspirators for their personal benefits. It was reported that some people started to complain about the illegal activities of RBA to their state authorities when their medical expenses were not covered and were denied for no just reasons. Such complaints filed by multiple people forced the federal government to issue a cease and desist order for RBA.
During the court proceedings it was also found that Clark is not a first time offender. He has already faced a class action lawsuit for violating the Racketeer Influenced and Corrupt Organizations Act. However, this lawsuit was dismissed in a New York state court as the evidence didn’t proved the fraud beyond the shadow of doubt.
Clark and his co-conspirators will soon be awarded their sentences, probably in the first week of August. Found guilty on all charges, Clark and his co-conspirators face a maximum penalty of 20 years in prison. The sentence can also be accompanied by a fine of up to 250,000 U.S. Dollars.
Considering the fact that over 25,000 people might have fallen victim to Clark’s illegal activities, the court advised that anyone who feels he/she has been duped by Clark can contact 866-444-3272 in order to speak to an adviser.
Since the news broke, more and more people are coming out with their stories involving insurance fraud. The case of David Clark can thus very well lead to some other leads involving similar frauds.
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