Three plead guilty to charges in health insurance scam

December 30, 1992|By New York Times News Service

Three people charged with defrauding 43,000 health insurance customers of millions of dollars in premiums have pleaded guilty in Miami. They participated in one of the largest health insurance scams prosecuted by the federal government in recent years, law-enforcement officials said.

The three were indicted last month on federal charges of cheating workers out of $29 million in premiums.

They are a former executive and two business associates of International Forum of Florida Health Benefit Trust, a company in class known as Multiple Employee Welfare Arrangements, or MEWAs.

The case is the largest so far investigated by the federal government involving a MEWA. These enterprises help small businesses and individuals buy health insurance that normally only large businesses can purchase. MEWAs have drawn increasing attention in the last year as it has been discovered that criminals have founded them, collected premiums and then suddenly disappeared, leaving consumers with their health bills

to pay.

George V. Doherty, 49, former chief trustee of the Florida Health Benefit Trust, which went out of business in 1990, pleaded guilty to operating a racketeering enterprise, the Labor Department announced late Monday.

April Marie McGlawn, a former service provider, pleaded guilty to "conspiring to defraud the trust through embezzlements, kickbacks and money laundering," the department said.

Robert L. Searle pleaded guilty to preparing false tax returns.

All three defendants have agreed to cooperate with federal investigators, the Labor Department said. Doherty agreed to make $34.5 million in restitution to the trust's victims, and Searle promised to make restitution of $300,442.

They and McGlawn still face possible prison sentences, according to William L. Teich, the special agent in charge of the Inspector General's Office of the Labor Department in Miami.

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