While no two scams are exactly alike, these case summaries will give you a sense of the scope and help you recognize red flags if someone tries to scam you.

Health insurance

Sometimes a scam can seem very legitimate. For example, Employer’s Mutual, LLC, marketed its health plan through licensed agents and associations. Unfortunately, it was not a valid plan and 33 victims were identified in Washington state. While the total dollar loss in unpaid claims and premiums is unknown, we do know that one couple suffered a loss of $130,000 in unpaid claims and approximately $1,500 in premiums in only 5 months.

The perpetrators were recently sentenced to prison by federal court.

Dental plan

In another case that made use of the traditional insurance system, My Smart Benefits marketed its dental plan through a network of licensed agents and brokers. This operation was characterized by forgeries of documents and legal delaying tactics by the scammers and outright refusal of a broker to cooperate with the Office of the Insurance Commissioner.

Another national scheme, 343 plan participants (plus dependents) were identified in Washington alone. All lost $22-$250 per month per plan participant. Fortunately for victims in our state, we were able to force the company out of our state and to make good on claims before it went out of business.

Note: Federal authorities estimate at least one-million dollars in premium money is unaccounted for at this time, with several million in claims nationwide. The perpetrators later absconded with several million dollars in premiums. Although the money is still outstanding, the perpetrators were arrested and pleaded guilty in U.S. District Court in Hammond, Indiana, this summer. Both were sentenced to federal prison. Another defendant, the main player's wife, had charges dismissed as part of the primary defendant's plea bargain.

Fake auto insurance

Global Healings Society/The Autobond sells “Financial Responsibility” bonds which falsely claim to replace auto insurance. It is operated by an anti-government group and masquerades as a religion. Headquartered in Washington, the company operates by Internet and mail in all states - and continues to ignore orders to stop doing business.

There are at least 100 victims in Washington and approximately 5,000 nationwide. Many have suffered damage and medical claims which remain unpaid. Others have also suffered damages as the result of accidents involving “insureds” from this group. At this point, the State of Florida’s Attorney General has obtained a $575,000 civil judgment against this group and criminal charges are pending here in Washington.

Coverage for the self employed

National Guild of Medical Professionals/Office and Professional Employees International Union marketed “self-employed” coverage through professional associations and online advertising. We identified 21 victims in Washington, 17 of whom had unpaid claims of almost $44,000. As a result of our investigation, the company was ordered to make good on the claims.

Medical malpractice

UNIMED/Professional Liability Insurance Co. LTD, headquartered in Bermuda and Atlanta, victimized physicians in hard-to-insure specialties by selling bogus medical malpractice coverage. It was operated by a previously convicted felon with a long history of financial crimes. The company’s victims included 4 Washington clinics employing 15 physicians. The total dollar loss in Washington was approximately $156,000 in premiums; fortunately, no claims were incurred.

The perpetrator is currently serving 13 years in federal prison as a result of our investigation. The entity operated in all states and the total dollar loss nationwide is astronomical. Approximately $23 million in assets were seized, including real estate, collector vehicles and several offshore bank accounts.

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