Fraud Roundup

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Ohio Chiropractor Sentenced

A Fairfield, Ohio, chiropractor who pled guilty in July to felony workers’ compensation fraud has been ordered to repay the Ohio Bureau of Workers’ Compensation (BWC) more than $200,000.

Bruce E. Holaday, owner of the Back and Spine Center, was sentenced in a Franklin County courtroom. In addition to restitution, the judge sentenced Holaday to 30 days in jail, placed him on five years of community control, and ordered him to pay $12,500 in investigation costs, as well as court costs.

In addition to Holaday, an investigation by the BWC and the Ohio Attorney General’s office, dubbed “Operation Backbreaker,” has resulted in the conviction of four of Holaday’s associates for their roles in the workers’ compensation fraud scheme, the BWC said.

The investigation began after BWC’s Special Investigations Department received an allegation that Holaday was unlawfully using the names and provider identification numbers of the chiropractors with whom he practiced to conceal his direct involvement in rendering or managing treatment for injured workers.

Holaday previously had been decertified as a BWC health care provider.

BWC special agents posed as injured workers and sought treatment at two clinics. Investigators found that in addition to concealing his direct involvement in treating injured workers, Holaday also billed and received payment from BWC for treatment never provided to injured workers. In carrying out the scheme, Holaday created bogus treatment records to substantiate the fraudulent bills submitted to BWC.

In addition to repaying $106,566.13 in restitution, which he has paid in full, Holaday is jointly liable with co-defendant Dr. Gary Berner for repaying an additional $104,350.53.

Dr. Gary T. Berner pled guilty to felony workers’ comp fraud for his active involvement in the scheme. He was sentenced to five years community control and ordered to pay more than $110,000 in restitution and investigative and court costs. As part of his community control, Dr. Berner was also handed a conditional sentence of 180 days in Franklin County jail.

Additionally, Dr. Dennis M. Mulcahy, Charles E. Hoskins Jr. and Debra A. Ramge have all pled guilty to felony workers’ compensation fraud.

N.D. Insurance Agent Pleads Guilty

A former insurance agent, Alan R. Henning of Minot, N.D., on Aug. 24 pled guilty to three counts of wire fraud, the U.S. Attorney’s Office for North Dakota said.

From January 2004 through November 2010 Henning was employed as an insurance agent and general business manager with West McLean County Mutual Insurance Co. in Minot. Henning diverted funds from incoming premiums, created false or fraudulent policy claims and received unauthorized loans against company owned certificates of deposit. He would then wire the funds to various individuals located in China, South Africa, Malaysia, Greece and the United Kingdom.

The statutory maximum penalty for each count of wire fraud is 30 years in federal prison and a $1,000,000 fine.

Henning’s sentencing is scheduled for Nov. 21.

Former Nebraska Claims Examiner Pleads Guilty to Mail Fraud

An Omaha, Neb., man pled guilty to committing mail fraud while he was working as a claims examiner for an insurance company. The U.S. attorney’s office says that William Bouda faces up to 20 years in prison. He is to be sentenced on Nov. 21.

Bouda was indicted by a federal grand jury in April for making false entries in a claim file assigned to him at Zurich American Insurance Co.

Prosecutors say the entries were designed to justify a check to a creditor to an Omaha concrete company. Authorities say Bouda processed the paperwork for a $160,000 check that was sent to the creditor’s law firm. The law firm was suspicious of the check and contacted the insurance company.

The check was never cashed. (AP)

Insurance Firm Owner Gets 3 Years for Wire Fraud in Minnesota

A federal judge in Minneapolis, Minn., sentenced an insurance company’s owner to more than three years in prison for stealing nearly $2 million from two entities his firm served.

Dennis Lee Pap, of Lynden, Wash., was sentenced to 41 months in prison on one count of wire fraud. Prosecutors say Pap used his company, Parthenon Risk Partners, to steal $1.8 million from Access Insurance Association and Pillar Insurance Limited.

Access is a Minnesota-based self-injured workers’ compensation association. Pillar is a property and liability reinsurance company.

Pap pleaded guilty in January to depositing the funds in his personal bank account. (AP)