Sifting through the opposing rulings on the legality of the subsidies on the federal health insurance exchange.
BOISE, Idaho, June 20 -- The U.S. Attorney for the District of Idaho issued the following news release:
U.S. Attorney Wendy J. Olson announced today that Adrian Rand Robison, 67, of Rigby, Idaho, pleaded guilty to mail fraud. Rand Robison was the founder and chairman of the board of The Legacy Network, an insurance brokerage agency in Rexburg. Adrian Russell Robison, 38, of Idaho Falls, Idaho, pleaded guilty to one count of making and subscribing a false tax return. Russell Robison was the Chief Executive Officer of The Legacy Network, owned a minority interest in the company, and is the son of Rand Robison. The defendants appeared before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello. They were charged in separate informations filed on May 16, 2013, by the U.S. Attorney's Office.
According to the plea agreement, Rand Robison, a licensed insurance agent, owned a majority interest in The Legacy Network, a company that brokered the sale of life insurance policies between the carriers that offered the policies and the independent insurance agents that marketed the policies to clients. In return for its services, The Legacy Network received a commission paid by the carriers for each policy sold. According to the plea agreement, Rand Robison admitted that he encouraged some high net-worth clients to apply for high face-value life insurance policies with the promise of rebating all or part of the first-year premiums back to the customer. Robison further admitted that he misrepresented in agent reports and other contractual documents, that he would not rebate, or otherwise finance, the premium payments of his clients. The Legacy Network received commission payments from the insurance carriers of approximately 105 to 138 percent of the first-year premium. Robison admitted that with those funds, he rebated some of the premiums to some high net-worth clients and kept the remainder. From 2006 to 2009, the Legacy Network received approximately $1,371,634 in commissions from life insurance carriers on the policies of a group of their high net-worth clients; they rebated approximately $923,497 to the clients and kept approximately $448,137. Robison agreed to pay restitution of $1,371,634.
According to the plea agreement, Russell Robison was aware that agents of The Legacy Network rebated all or part of the premium payments to some of their high net-worth clients, and had, in fact, signed rebate checks to the clients. Neither Robison nor The Legacy Network issued IRS Forms 1099-MISC recording the rebates as income to the high net-worth clients. The company's internal books and records recorded the rebates as deductible business expenses. After some clients' policies lapsed due to non-payment of premiums--which occurred typically in the second year of the policies--some policies were replaced with policies issued by different insurance carriers. According to the plea agreement, Robison admitted that for tax years 2007, 2008 and 2009, he filed a partnership income tax return for The Legacy Network, knowing that the returns contained false information by improperly overstating expenses for rebates paid. According to the plea agreement, the total tax loss for tax years 2007 through 2009 was $270,631.
Adrian Rand Robison faces up to 20 years in prison, a maximum fine of $250,000, and up to three years of supervised release. Adrian Russell Robison faces up to three years in prison, a maximum fine of $100,000, and up to one year of supervised release.
The defendants are scheduled to be sentenced on September 12, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The cases were investigated by Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation (FBI), and the Idaho Department of Insurance.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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