Connecticut Insurance Firm Owner Pleads Guilty in $40M Fraud Scheme

The owner and manager of a Connecticut insurance firm pled guilty this week in federal court in White Plains, New York to conspiracy to commit wire fraud and bank fraud, according to prosecutors.

Between 2015 and 2019, Anthony Riccardi, and his co-conspirators used his firm, Employee Benefit Solutions LLC, as part of a $40 million scheme to steal client healthcare funds and defraud multiple lenders.

Damian Williams, the U.S. Attorney for the Southern District of New York, said Riccardi, of New Canaan, Connecticut, pled guilty to one count of conspiring to commit wire fraud and bank fraud. In connection with the guilty plea, Riccardi agreed to pay $14,870,653.36 in restitution and forfeit $2,000,000.00. Sentencing has been scheduled for July 20, 2023.

Riccardi’s co-defendant, Patricia Riccardi, previously pled guilty to one count of conspiring to commit wire fraud and bank fraud before Judge Halpern. Her sentencing is scheduled for June 20, 2023.

Riccardi’s co-conspirator, Erin Verespy, was previously sentenced to 66 months in prison following her guilty plea to one count of conspiring to commit wire fraud and bank fraud.

According to the court filings and statements, EBS provided third party healthcare claims administration services to clients that elected to “self-fund” their employee healthcare plans. As a TPA, EBS would purportedly administer, process, and pay healthcare claims for its clients’ employees in exchange for an administrative fee. EBS also brokered stop-loss insurance coverage for reimbursement of costs that exceed a policy’s limits.

The complaint said that between at least 2015 and continuing through 2019, EBS represented an automobile dealership chain in Westchester County, New York. During this time period, this client transferred approximately $26 million to EBS for the payment of healthcare claims.

In reality, prosectors said, a significant number of purported checks listed on the EBS check register invoices were never actually deposited by the healthcare providers. Instead, approximately $17.87 million in healthcare payments were misappropriated with the overwhelming majority simply transferred by EBS into its own operating account, where they were used for non-healthcare expenses by the managers and owners of EBS, according to prosecutors.

According to the complaint, they also created fake claims, including more than $3 million in claims falsely attributed to one pharmacy.

Prosecutors cited an example where a review of bank records indicates that the dealership’s healthcare funds were used by Riccardi and his co-conspirators to pay their home mortgage expenses as well as a personal credit card account with expenses relating to boating, luxury cars, and golf.

EBS decided what few healthcare claims to actually pay based on which healthcare providers were likely to complain if they did not receive payment or if the claims were connected to executives of the client. The dealership told investigators that one healthcare provider was suing it for nonpayment and several employees were being called by bill collectors.

Riccardi and his co-conspirators concealed their fraud by creating fabricated bank statements and checks to create the appearance that healthcare claims were being paid by EBS, when in reality, they were not, investigators said. A former employee testified that EBS used a software that allowed employees to convert scanned bank statements into editable documents.

Riccardi and his co-conspirators also applied for multiple fraudulent bank loans and merchant cash advances designed in part to pay various fiduciary obligations that EBS owed to the client. They fraudulently received millions of dollars in loans under the auspices of financing the purchase of upgraded billing software for EBS, which included Riccardi and his co-conspirators submitting fabricated invoices from a fake company that supposedly sold the billing software, according to prosecutors.

Topics Fraud Connecticut