Agents indicted for insurance fraud [Toledo Business Journal]

The indictment of two former Ohio insurance agents was the result of a joint investigation between the Ohio Department of Insurance (ODI), the Ohio Auditor of State, and the US Department of Labor. The indictments of Van Workman, president of Mansfield-based Employer Benefit Services (EBS), and Michelle Dinsmore, the company's chief operating officer - for money laundering, theft, passing bad checks, and engaging in a pattern of corrupt activity - were issued in the Brown County Court of Common Pleas in February.

"The deceptive behavior of Workman and Dinsmore has burdened both public and private entities with unnecessary financial harm and distracted them from their core business focuses," stated Mary Taylor, Lieutenant Governor and ODI director. "Thanks, in large part, to the investigation conducted by the ODI, these individuals have been indicted."

In 2011, the department revoked the Ohio resident insurance agency and third-party administrator (TPA) licenses of EBS and revoked the Ohio resident insurance agent license of Van A. Workman, of Greenwich, Ohio. EBS and Van Workman were also assessed $2,000 each in administrative costs. Ohio resident agent Matthew Workman, of Mansfield, Ohio, was ordered to pay a $5,000 civil penalty and $500 in administrative costs. According to ODI, they were involved in swindling more than $405,000 from clients. Separately, Dinsmore, of Mansfield, Ohio, permanently surrendered her Ohio resident insurance agent license. She failed to remit premiums to several health insurers and co-mingled medical claim funds with EBS' operating funds.

Through EBS, the Workmans specialized in partially self-funded health insurance programs for employer groups. They provided clients TPA services, administered employer's claims, and paid them in accordance with the plan provisions. EBS and the Workmans also arranged stop loss insurance, which provides for an employer's claims payments above a preset amount to the stop loss insurance maximum.

Through a department investigation that began in August 2008, it was determined that EBS and the Workmans failed to use due diligence in selecting appropriate stop loss insurance for Omni Manufacturing (St. Marys), Brown Publishing Company (Cincinnati), and the Delaware County Board of Developmental Disabilities. The coverage was secured through United Re Trust, which is not a licensed insurance company in Ohio.

In addition, EBS and the Workmans engaged in a pattern of up rating premium costs of insurance products to multiple clients without their knowledge or consent. They also did not disclose the cost of coverage and the insurer's name, and manipulated documentation to hide their commission amount. This misrepresentation of insurance terms and costs is considered a fraudulent and coercive practice under Ohio insurance law.

Ohio insurance law permits the director to suspend or revoke any license of an insurance agency and agent for using fraudulent, dishonest practices, demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere.

The Ohio resident insurance agency and TPA licenses of EBS and the Ohio resident insurance agent licenses of Van WorkmanJuly 12, 2011. Dinsmore's license was permanently surrendered on September 21, 2011.