Thursday, December 13, 2012

U.S. Attorney: Seven public officials indicted for insurance fraud

Posted by on Thu, Dec 13, 2012 at 3:32 PM

A reward program is at the center of the fraud case.
  • A reward program is at the center of the fraud case.
Acting U.S. Attorney for the Western District of Missouri David M. Ketchmark announced Thursday afternoon that six employees of Kansas City and one Jackson County employee have been indicted on federal charges of defrauding their health-insurance program. The fraud involved hundreds of public employees who allegedly reaped $300,000 from an insurance program by lying about doing triathlons, running marathons and even participating in Olympic lifting for cash rewards.

The 21-count indictment alleges that the employees wrongly received incentives from Blue Cross and Blue Shield of Kansas City's "Points to Blue" program. Participants in the program would log onto a website and input healthy activities they had done. They earned points for each activity. For every 1,000 points earned, the employees tallied $1 toward a gift card or a preloaded debit card. The annual limit for each employee was $250.

According to the indictment, the employees claimed to do more strenuous activities (and thus earn more points). They also allegedly entered activities for co-workers and their dependents in return for keeping some of the points.

When submitting a co-worker's activity into the system, the employees are said to have kept a portion of the $250 award, usually $50.

Kansas City, Mo., Municipal Court employee Crystal Burgin-Woods, 42, was allegedly the biggest recipient of the points, piling up 383 gift cards totaling $185,655. The scheme totaled 1,253 fraudulent gift cards issued, totaling $310,960.

Some of the exercise claims that the employees allegedly made are absurd. The indictment says the employees claimed that kids - often 5 years old or younger - competed in marathons and triathlons.In one claim, a 2-year-old was said to have run three marathons and a triathlon. Michael King, of the city's water department, allegedly said he did three duathlons, three marathons, two half-marathons, an Olympic lifting competition and four triathlons.

Kansas City's City Manager Troy Shulte released a statement this afternoon: "We are very saddened with the allegations brought upon a small group of City employees. These alleged actions do not represent the majority of City employees who adhere to the City's ethical standards."

Here's a full list of the indicted employees and their departments: Crystal Burgin-Woods, 42, an employee of the Kansas City, Mo., Municipal Court; Matt Stivers, 41, an employee of the city's IT department; Kim Blair, 36, and Sylvia Sims, 37, both employees of the city's parks and recreation department; Matt Tholen, 29, an EMT; Michael King, 30, an employee of the city's water department; Michael Olukotun, 39, a corrections officers at the Jackson County jail.

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