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U.S. District Court Sentences Springfield, Tennessee, Man to Prison and Orders Payment of $6,524,888 in Restitution for Healthcare Fraud Scheme
NASHVILLE, TN – The U.S. District Court for the Middle District of Tennessee has sentenced Bart Posey – of Springfield, Tennessee – to 168 months in prison, 36 months of supervised release, and ordered the defendant to pay $6,524,888 restitution after a U.S. Department of Labor Employee Benefits Security Administration (EBSA) investigation discovered a multi-million dollar insurance fraud that affected more than 17,000 individuals nationwide.
The court's action comes after Posey - owner of American Trade Association Inc. and Smart Data Solutions LLC - pleaded guilty in January 2018 to one count of mail fraud and one count of embezzlement from a healthcare benefit program. EBSA's investigation found Posey - along with William Worthy, Angela Posey, Richard Bachman, and Kathleen Cauthen - co-conspired to commit healthcare fraud against individuals in multiple employer welfare groups nationwide.
EBSA determined Posey and his co-conspirators sold and caused others to sell bogus health insurance products to unsuspecting consumers. Posey failed to obtain backing from a legitimate underwriter for the products and, as a result, his scheme denied legitimate health insurance claims for participants. Posey also embezzled millions in insurance premiums the scheme's victims paid to his company.
Investigators found Posey and his co-conspirators diverted more than $5 million, using those premiums to buy a motorcycle, sports car, football tickets, and to pay off a $500,000 personal mortgage. The scheme collected more than $22 million in premiums for health coverage and left approximately $6,524,888 in unpaid health claims.
"Knowingly committing healthcare fraud victimizes hardworking employees and their families," said Employee Benefits Security Administration Regional Director Isabel Colon, in Atlanta. "Posey and his co-conspirators financially devastated hardworking victims who were forced to pay out-of-pocket thousands of dollars in healthcare costs. The U.S. Department of Labor will continue to relentlessly work to hold those who commit these crimes accountable."
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.