Seven Public Employees Indicted for Fraud Scheme to Cheat Health Insurance Program

KANSAS CITY, Mo., Dec. 13 -- The U.S. Attorney for the Western District of Missouri issued the following news release:

David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced today that six Kansas City, Mo., employees and a Jackson County, Mo., employee have been indicted by a federal grand jury for a scheme in which hundreds of public employees defrauded their health insurance program of more than $300,000 by falsely claiming to have run marathons and competed in triathlons and an Olympic lifting competition for cash incentives.

Crystal Burgin-Woods, 42, an employee of the Kansas City, Mo., Municipal Court; Matt Stivers, 41, an employee of the city's information technologies department; Kim Blair, 36, and Sylvia Sims, 37, both employees of the city's parks and recreation department; Matt Tholen, 29, an emergency medical technician; Michael King, 30, an employee of the city's water department; and Michael Olukotun, 39, a corrections officers at the Jackson County, Mo., jail, were charged in a 21-count indictment that was returned under seal by a federal grand jury on Wednesday, Dec. 12, 2012. That indictment was unsealed and made public today upon the arrests and initial court appearances of Burgin-Woods, Stivers, Sims, Tholen, King and Olukotun.

Points to Blue Program

The federal indictment alleges that all of the defendants engaged in a scheme to defraud their health insurance provider, Blue Cross and Blue Shield of Kansas City. Blue Cross launched a new benefits program on April 1, 2010, called Points to Blue. Under that wellness program, members could login to a Web site and identify healthy activities in which they participated in order to receive points. For each 1,000 points earned through healthy activities, members would receive one dollar of credit towards either a gift card or preloaded debit card, up to an annual limit of $250 per member. Each dependent in the member's household could also participate in healthy activities to accumulate points, up to an annual limit of $250 for each dependent.

More points were awarded for more strenuous activities; the maximum points awarded for a single activity was 10,000 points for extremely strenuous activities such as marathons and triathlons.

Fraud Scheme

Within the first six months of the Points to Blue wellness program, the indictment says, member employees of Jackson County and the city of Kansas City began falsifying their activity entries on the Web site by falsely claiming to have completed the most strenuous activities in order to obtain the maximum gift card or debit card in the amount of $250. The indictment alleges that all six of the defendants, in addition to making false activity entries for themselves and their dependents, solicited their co-workers to engage in the fraud scheme as well. According to the indictment, they submitted false activity entries on behalf of a co-worker or a co-worker's dependent, and in exchange they would keep a portion of the $250 award (usually $50), while the co-worker received the remainder.

According to the indictment: Burgin-Woods fraudulently received 383 gift cards totaling $185,655. Stiver fraudulently received 248 gift cards totaling $39,070. Blair fraudulently received 238 gift cards totaling $30,485. Tholen fraudulently received 144 gift cards totaling $17,600. Olukotun fraudulently received 71 gift cards totaling $16,480. King fraudulently received 79 gift cards totaling $12,745. Sims fraudulently received 90 gift cards totaling $8,925.

As a result of the fraud scheme, 1,253 fraudulent gift cards were issued, totaling $310,960.

Counts

The indictment charges each of the defendants with three counts of wire fraud. For example, Burgin-Woods, Stivers, Blair, Tholen and Olukotun allegedly claimed that young children (often five years old or younger) competed in multiple marathons and triathlons. King allegedly claimed that he participated in three duathlons, three marathons, two half-marathons, an Olympic lifting competition and four triathlons.

Ketchmark cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney John E. Cowles. It was investigated by the U.S. Postal Inspection Service Task Force, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Overland Park, Kan., Police Department.

TNS JF78JF-121214-4140486 EditorFurigay