Company Officers Indicted In Alleged $190M Health Insurance Scheme

According to the complaint, which was filed by the Federal Trade Commission in the U.S. Court of the Southern District of Illinois, Simple Health Plans LLC sold policies to more than 400,000 people nationwide, including 1,175 of them in all 38 counties that comprise Southern Illinois.

Simple Health Plans also is known as Health Benefits One.

The company's former owner, Steven Dorfman, 27, of Fort Lauderdale, Florida, former Chief Compliance Officer Candida L. Girouard, 45 of Valrico, Florida, and former Vice President of Sales John A. Sand, 47, of Fort Lauderdale, each face single counts of conspiracy to commit mail and wire fraud, four counts of mail fraud, and eight counts of wire fraud.

The three Florida men are scheduled to appear at the federal courthouse in East St. Louis on March 7 for arraignments. If convicted, they face potential sentencing of up to 30 years on the conspiracy charges and 20 years on each of the mail and wire fraud counts.

"We credit the Federal Trade Commission for their continued vigilance to protect the community from predatory and unscrupulous businesses operating online," United States Attorney Steven Weinhoeft said in a statement Thursday. "Crimes like those alleged in the indictment rob people of their hard-earned money, but worse, they have catastrophic consequences when expected insurance benefits aren't there in a time of need. These offenses ruin lives and must be dealt with harshly."

According to federal court documents, Simple Health Plans sold health insurance policies over the phone, most of which were indemnity plans with a low cap on the amount of medical expenses they cover. After the caps are reached, patients are responsible for 100% of the balance out of pocket.

The indictment alleges that the company's sales agents were scripted with a deceptive sales pitch.

"The whole idea of this plan is to make your out-of-pocket expenses as low as possible," the script said, according to the court records. "When all is said and done, you end up with pennies on the dollar."

According to the indictment, it wasn't long after the indemnity plans were purchased that customers called Simple Health to complain:

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That they had incurred "significant medical expense" for treatments and services they were led to believe were covered

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That their doctors and hospitals did not accept the limited indemnity plans

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That prescription drug costs were not covered, contrary to what the company had told them.

The alleged fraud occurred between 2013 and October of 2018, when the FTC filed a complaint with the federal court in southern Florida, which granted a temporary restraining order halting the company's operation and freezing its assets.

Earlier this month, the court certified a nationwide class-action lawsuit it anticipates could sign on as many as 200,000 former customers as plaintiffs. In the meantime, federal courts are prosecuting the company's officers criminally in their local districts.

The St. Louis Office of the U.S. Postal Inspection Service is investigating the case. Assistant U.S. Attorneys Scott Verseman and Peter Reed are prosecuting the case.

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