4 at Berks call center indicted in nationwide health insurance fraud scheme

Four businessmen — including three from Berks County — and two companies have been indicted on wire fraud charges in a nationwide telemarketing fraud scheme, federal officials have announced.

Corporate defendants Bene Market LLC and Seguro Medico LLC — doing business as Quick Health, Q Health, Benefits Now, Express Benefits and YourBenefits4U (collectively the Bene Market Group) — operated a boiler room call center near Reading that peddled discount health and dental plans to consumers through a series of false, misleading and deceptive sales practices, David Metcalf, U.S. attorney for the Eastern District of Pennsylvania, said in a release.

Prosecutors said the businesses were controlled and managed by the principal architect of the alleged fraud scheme, Alan Redmond, 42, of Wyomissing.

Redmond had been indicted in October on federal charges that he failed to pay more than $1 million in employment taxes related to the call center.

The indictment announced Wednesday is a superseding indictment, which federal officials explained replaces the indictment originally filed.

“Superseding indictments can modify/add charges and/or include additional defendants,” federal officials said in an email. “In this case, both charges and defendants were added.”

According to the release:

Redmond was supported in the scheme by senior executives Arthur Walsh, 65, of West Lawn and Jesus Barrera, 32, of Dillsburg, York County, and head sales agent and manager Albert Groff, 44, of Wernersville.

The 44-page indictment returned by the federal grand jury alleges that from at least January 2018 through December 2022, the defendants collected tens of millions of dollars in commissions by systematically deceiving and misleading consumers seeking health insurance through bait-and-switch sales tactics.

Those tactics included tricking consumers into buying limited benefit plans that provided little or no coverage by falsely representing that the plans provided comprehensive health insurance coverage, also known as “major medical insurance,” or provided coverage equivalent to major medical insurance, when they did not.

The Bene Market Group paid lead generators for the transfer of live calls with consumers looking to buy health care insurance.

The market group employees then falsely told consumers the company was “the national enrollment center for health insurance” and worked as a third-party broker to search and compare health insurance products across the marketplace to find the best coverage at the lowest rate.

The market group also falsely claimed to “work with over 30 of the top A-rated insurance companies” and to sell comprehensive health insurance policies from well-known, blue-chip insurers.

In reality, the group did not search the marketplace, did not work with the touted A-rated carriers and did not even sell major medical insurance.

Instead, the group peddled a limited set of discount plans that had lower and more restricted benefits than major medical insurance. In some cases, the limited benefit plans sold were not even insurance.

The bait-and-switch scheme left tens of thousands of purchasing consumers without insurance coverage for the majority of their medical, dental and prescription costs.

For some consumers with serious health care needs, the lack of coverage from the limited benefit plans caused financial hardship and left them with medical debt in the tens and hundreds of thousands of dollars.

To keep the fraud scheme going, Redmond and the managers used unlicensed sales employees to sell the limited benefit plans; bundled products together to mimic major medical insurance; trained the sales employees with misleading scripts and sales pitches to use on the phones; used a variety of trade names and aliases when selling plans; engaged in “churning” and “policy-flipping” by reselling and upselling existing consumers; omitted and downplayed material restrictions about the limited plans sold; overbilled and double-billed consumers; told consumers to ignore or disregard the verification disclaimers or disclosures; altered recorded sales calls after the fact to deceive regulators; withheld information about the limited benefit plans from sales employees; ignored complaints from consumers, carriers and regulators; and refused or delayed refunds to consumers.

Redmond is accused of obscuring his control of Seguro Medico by using nominees, including his spouse, and using funds fraudulently obtained from victims’ purchases to buy personal and commercial properties, jewelry, airline tickets, event tickets, private school tuition and limousine services.

The other defendants also received significant payments or distributions from the fraud scheme.

The indictment also alleges that between 2019 and 2022 Redmond caused Bene Market and Seguro Medico to withhold over $1.2 million in trust fund taxes — Social Security, Medicare and income taxes — from the wages and paychecks of employees but he did not pay over these withheld amounts to the IRS on behalf of the employees as required.

If convicted of the conspiracy, wire fraud and tax offenses, Alan Redmond faces a maximum possible prison sentence of 635 years, a five-year period of supervised release and a $6.75 million fine, along with restitution and forfeiture of properties and money, prosecutors said.

Walsh, Barrera and Groff each face 600 years of imprisonment, a five-year period of supervised release and a $5 million fine, along with restitution and forfeiture, prosecutors said.