An Indian American couple has been convicted of defrauding employee groups in Texas in a health plan fraud worth thousands of Dollars.
Maruthi S Manney, 47, and his wife Lakshmi, 45, who ran a health benefits plan, were convicted on Thursday by Federal Jury in Greenbelt, a Washington suburb in Maryland, after they failed to pay for the medical care of clients that included school districts and business employees in East Texas.
Rockville (Maryland)-based SAI Plan routinely processed claims and printed cheques but failed to mail them out, prosecutors said.
Maruthi Manney invested $500,000 from plan funds in another venture, used $12,000 for a holiday party and spent roughly $7,000 on tickets for Washington Redskins (football) games.
"The victims paid for health insurance coverage that Maruthi Manney and Lakshmi Manney never intended to provide," Maryland US Attorney Rod J Rostenstein said in a statement.
The defendants' attorney said their clients never sought to defraud clients. They said the company, created in 1998, hit financial trouble a year later and was unable to keep up with its growing client base.
Lakshmi Manney's attorney, Jane Carol Norman, claimed, "This was a valid company that paid medical claims and never made any false representations to anyone. The company ended up going bankrupt."
This, she said, was a civil matter that should never have been prosecuted criminally. Maruthi Manney was convicted of one count of wire fraud and eight counts of mail fraud. Lakshmi Manney was convicted of mail fraud but was acquitted on the wire fraud charge.
