Lakewood Man Charged with Defrauding Health Care Company of Millions
An insurance producer from Lakewood is facing charges for conspiring to defraud several Blue Cross Blue Shield Health Care insurance affiliates of more than ten million dollars.
U.S. Attorney Craig Carpenito said 63-year old Jonas Knopf conspired to defraud three BCBS affiliates in the Pennsylvania and Washington D.C. areas.
Knopf was charged by complaint with one count of conspiring to defraud three health care BCBS affiliates in P.A. and the D.C. area.
From 2009 to 2017, Knopf was the CEO of Madison Financial Services (MFS) and a licensed insurance producer - a person who is licensed to sell insurance products, according to documents filed in this case and statements made in court.
MFS was the parent company of 11 sham companies Knopf created among others for the purpose of marketing health insurance coverage to people who were not, in fact, his employees.
These companies purported to be located and doing business in Pennsylvania and/or Virginia, and created the appearance of employment status for hundreds of individuals, most of whom are Lakewood residents who were seeking health care coverage through BCBS benefit plans.
The conspiracy began in Pennsylvania, and lasted until 2013, when an internal BCBS investigation uncovered irregularities in the information submitted by Knopf and others through his sham companies.
The Pennsylvania Department of Insurance then started an investigation and Knopf surrendered his Pennsylvania insurance producer's license and ceased operation in the state.
His conspiracy, however, continued in Virginia.
Knopf's clients or purported employees paid him inflated insurance premiums as well as providing him with monies for payroll.
He then issued fake payroll checks, giving the false impression that they were actually employees being paid for services rendered.
This conspiracy continued until January 2017 and caused the health care insurers to pay out more than $10,000,000.00 in fraudulent claims.
The count of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison and a $250,000.00 fine.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent In Charge Gregory W. Ehrie; special agents of the U.S. Department of Labor, Office of Inspector General, Office of Investigations, New York Region, under the direction of Special Agent in Charge Michael Mikulka; investigators of the U.S. Department of Labor, Employee Benefit Security Administration (EBSA), under the direction of Regional Director Darren Cohen, and the Ocean County Prosecutor's Office, under the direction of Bradley D. Bilhimer, with the investigation leading to today's charge.
The government is represented by Senior Litigation Counsel V. Grady O'Malley of the U.S. Attorney's Office's Organized Crime/Gangs Unit and Assistant U.S. Attorney Tracey Agnew of the Violent Crime Unit.
Defense counsel is Michael Gilbert Esq., New York.