N.J. Corporation Charged with Stealing Health Care Premiums

New Jersey Division of Criminal Justice Director Vaughn McKoy reported that the Division of Criminal Justice – Office of the Insurance Fraud Prosecutor has obtained an indictment charging a Somerset County corporation with stealing employee health care insurance premiums.

According to Insurance Fraud Prosecutor Greta Gooden Brown, Direct Home Inc., a housewares distributor, which did business at 1075 Easton Ave., Suite 1, Somerset, Somerset County, was charged with theft by failure to make proper disposition (3rd degree). Direct Home Inc. now does business at 1739 Front St. in Plainfield, Somerset County. If convicted, the Direct Home faces a criminal fine of $15,000. In addition, Direct Home Inc. faces civil insurance fraud fines.

The Somerset County Grand Jury indictment alleges that between April 14 and May 8, 2001, Direct Home Inc. accepted more than $2,000 health insurance premiums from a Direct Home Inc. sales representative from Charlotte, North Carolina. The premiums were so the representative would be included on the employer sponsored group health insurance plan maintained by Direct Home Inc. Aetna Insurance Company provided the insurance coverage for Direct Home Inc. representatives.

An investigation by the Division of Criminal Justice – Office of the Insurance Fraud Prosecutor determined that, although Direct Home Inc. accepted the insurance premiums from the representative, his health insurance had allegedly been cancelled and he had no health insurance coverage.