Federal Court Sentences Former New Jersey Insurance Broker after Guilty Plea for Healthcare Fraud Following U.S. Labor Department Investigation
NEW YORK, NY – The U.S. District Court for the District of New Jersey has sentenced Lawrence Ackerman – a former Bergen County, New Jersey, insurance broker – to six months of imprisonment and six months of home incarceration, and ordered him to pay $1,000,000 in restitution for defrauding the United Auto Workers (UAW) Local 2326 Health and Welfare Fund.
The court action comes after a joint investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), Office of Labor-Management Standards (OLMS) and Office of Inspector General (OIG).
The court sentenced Ackerman after he pleaded guilty in December 2018 to a superseding indictment charging him with one count of healthcare fraud. In January 2017, Ackerman and Sergio Acosta, former president of UAW Local 2326 and International UAW representative, faced a two-count indictment that included conspiracy to commit healthcare fraud. Acosta pleaded guilty to one count of healthcare fraud and the court ordered him to pay $32,000 in restitution to the union’s fund.
Investigators found Ackerman formed Atlantic Business Associates (ABA) and other shell companies in 2001 to use the union's fund to provide medical insurance coverage to individuals who were not ABA employees and ineligible to participate in the union’s welfare fund. These individuals – who Ackerman recruited – paid excessive monthly premiums for medical coverage provided by the Local 2326 welfare fund as they could not get similar coverage elsewhere. The union’s fund was a fully insured health plan for which Horizon Blue Cross and Blue Shield of New Jersey provided coverage from July 1, 2009, through June 30, 2011, when it became a self-insured plan. Ackerman’s ineligible participants remained on the plan through Sept. 30, 2011.
“Criminal acts like these directly impact participants in employee benefit plans by compromising their hard-earned benefits and eroding confidence in those chosen to manage their trust,” said Assistant Secretary of Labor for the Employee Benefits Security Administration Preston Rutledge. “The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs.”
“Lawrence Ackerman’s greed caused the filing of millions of dollars in fraudulent healthcare claims. He used shell companies to exploit a union-affiliated healthcare plan to provide healthcare benefits to individuals who were not eligible for such benefits. The Office of Inspector General will continue to work with our partners within the Department of Labor to root out corruption involving unions and employee benefit plans,” said the U.S. Department of Labor Office of Inspector General’s Special Agent-in-Charge Michael C. Mikulka, in the New York Region.
EBSA’s New York Regional Office, the Department’s OIG and OLMS investigated the case.
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/agencies/ebsa.
EBSA’s mission is to assure the security of the retirement, health and other workplace related benefits of America's workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law.
OLMS administers and enforces most provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), which promote union democracy, transparency and financial integrity in private sector labor unions.
The OIG conducts criminal, civil and administrative investigations into alleged violations of federal laws relating to department programs, operations and personnel. In addition, the OIG conducts criminal investigations to combat the influence of labor racketeering and organized crime in the nation’s labor unions. Promptly refer such matters to the OIG Hotline (https://www.oig.dol.gov/hotlinecontact.htm) or 1-800-347-3756.
The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.
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