City employee pleads guilty to health insurance fraud scheme

A City of Kansas City, Mo., employee pleaded guilty in federal court today to his role in 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 for cash incentives.

Michael King, 31, Kansas City, Mo., pleaded guilty before U.S. District Judge Gary A. Fenner to one count of wire fraud.

King, who was employed by the city in the water department, received health insurance coverage from Blue Cross/Blue Shield of Kansas City. As an insured, King was eligible to participate in a wellness program offered by Blue Cross called Points to Blue. The program offered gift cards to King and other insureds based upon entries made to the Points to Blue website, logging various exercise programs and diet programs completed by the insureds. Every 1,000 points earned translated to one dollar toward a gift card, up to a maximum of $250 annually for each insured. The more strenuous exercises earned more points.

King admitted that he and other employees submitted false entries to the Points to Blue website, claiming they completed extremely strenuous activities in order to fraudulently obtain the maximum gift card of $250. To make even more money in this scheme, King admitted, he and others submitted false entries for other employees and their eligible dependents, in exchange for receiving a portion of the fraudulent gift card proceeds.

King made fraudulent Points to Blue submissions on behalf of 51 employees, resulting in 79 gift cards worth a total of $12,745. Among the fraudulent submissions, on Dec. 3, 2010, King submitted an activity entry to Points to Blue stating that he had completed three duathlons, three marathons, two half marathons, one Olympic lifting competition, and four triathlons.

Under federal statutes, King is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the United States Probation Office.

Co-defendant Matt Tholen, 29, of Kansas City, Mo., pleaded guilty to the same charge on May 13, 2013. Tholen, an emergency medical technician, admitted that he made fraudulent Points to Blue submissions on behalf of 62 employees, resulting in 144 gift cards worth a total of $17,600. Among the fraudulent submissions, on Jan. 16, 2011, Tholen submitted an activity entry to Points to Blue stating that 5-year-old “TJ” had completed two marathons and two triathlons.

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