Newspaper article St Louis Post-Dispatch (MO)

Five Indicted in Phony Health Insurance Scheme

Newspaper article St Louis Post-Dispatch (MO)

Five Indicted in Phony Health Insurance Scheme

Article excerpt

A federal grand jury has indicted five men on charges of collecting $2 million by selling phony health insurance policies. About 1,400 people were bilked, many of them in the St. Louis area, authorities said.

The scheme left scores of people on the hook for medical bills ranging up to $100,000, prosecutors said.

A woman from Florissant, for instance, was stuck with a $40,000 bill after she developed breast cancer and found her insurance policy didn't exist.

The men were owners and employees of the Delta Group, an insurance agency in O'Fallon, Mo., that folded suddenly early last year.

The indictment was handed up Thursday and made public Monday. Those charged were:

John Allen, 55, of Foley, Mo., listed in Missouri insurance records as an owner of Delta.

Michael Patrick McClelland, 51, of St. Peters, also listed as an owner.

William A. Anderson, 34, of St. Peters.

Barney L. Sandow, 60, of Hazelwood.

Ronald Horn, 52, of St. Peters.

On Monday, postal inspectors and FBI agents arrested four of the five men; Allen remained at large. Those arrested were released on $25,000 unsecured bond.

According to the charges, Delta Group recruited insurance agents in St. Louis and several states to sell health insurance policies. The defendants told the agents that Delta was a "third party administrator." That means it handled paperwork for several insurance companies, which actually issued the policies.

The problem, prosecutors say, is that Delta rarely actually placed a customer with an insurance company. Of 1,400 customers, only 10 were actually insured. In all, customers sent $2 million in premiums to Delta and three sister companies.

One of the uninsured was Margo Schaefer of Florissant. …

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