Memphis TN April 7 2013 The Memphis attorney for two men behind a bogus health-insurance operation in Springfield has been arrested on charges of theft, conspiracy to commit theft and money laundering in connection with the case.
William L. Hendricks Jr., 54, a former partner in the Memphis law firm Evans-Petree PC, was taken into custody by the TBI on Thursday at his Memphis law office, said Robertson County Assistant District Attorney B. Dent Morriss.
Hendricks was named as a defendant in the same March 20 indictment that accused Springfield businessman Bart S. Posey Sr. and his former business partner, Richard H. “Rick” Bachman Jr. of Austin, Texas, of the theft, conspiracy and money-laundering charges.
Posey and Bachman were arrested last week, but Hendricks’ indictment was kept a secret until police could locate and arrest him, Morriss said.
He is being transported to Springfield and will be held in the Robertson County jail pending a bail hearing, which hasn’t yet been set, the prosecutor said.
Posey, 49, is being held without bail in the Montgomery County jail in Clarksville, while Bachman, 64, is in the Travis County jail in Austin pending extradition to Tennessee, Morriss said.
Robertson County authorities decided to hold Posey in the Montgomery jail because one of his sons is a jailer at the Robertson County jail and another son is a Robertson County deputy sheriff.
The court ordered that Posey be held without bond until it could be determined where his bail money would be coming from, Morriss said. No bail hearing has been set.
“We don’t want him using his victims’ money for bail,” the prosecutor said.
All three defendants are charged with the theft of $225,000 in insurance premiums that came from some of the victims of a nationwide health-insurance scam that netted more than $20 million from about 12,000 victims, according to the Tennessee Attorney General’s office, which helped investigate the case.
The charges are related to money the state alleges that Posey and Bachman diverted from their former companies, Springfield-based Smart Data Solutions and the American Trade Association, after they were shut down in March 2010 by the Tennessee Department of Commerce and Insurance under an order issued by the Davidson County Chancery Court.
According to the indictment, Posey and Bachman arranged for premiums that were still being paid by customers who bought the phony health-insurance policies to be transferred to bank accounts they had set up in Memphis and Springfield after the state had placed their insurance operation into receivership.
Davidson County Chancellor Ellen Hobbs Lyle ruled that three Evans-Petree lawyers — Hendricks, Russell T. “Rusty” Hensley and Theodore T. Kitai — were in contempt of the court when they set up new business entities for Posey and Bachman, with the lawyers listing themselves as the officers, to continue collecting premiums for the phony insurance policies from victims after the state had shut down the original companies.
Under the ruling, all of that money, which was collected by a third-party payment processor in Florida, should have gone to the receiver appointed by Lyle to liquidate Smart Data Solutions and the American Trade Association, for the eventual benefit of victims of the scam.
The state said there was about $7 million in unpaid medical claims pending when the companies were shut down, and so far, none of those bills have been paid.
Hendricks, who had been Posey and Bachman’s lawyer for several years, resigned from Evans-Petree shortly after Lyle issued the contempt order; the other two lawyers are still associated with the firm, Morriss said.
One of the victims of the scam, Karen Saltsman of Mt. Juliet, said Thursday that she was “absolutely thrilled” to hear that some arrests had been made in the case. She said she still has about $10,000 worth of medical claims that were never paid by the health policy she bought from the American Trade Association.
“I’m glad to see that justice is finally being done, but it’s not getting me any of my money,” she said, adding that she had received a letter from the state recently saying that she might get “about $300” from the liquidation of the companies by the state Department of Commerce and Insurance.
The scam preyed on people with prior medical conditions who could not buy health insurance through normal channels, the state has said. Marketers hired by Posey and Bachman sold “memberships” in the American Trade Association that also purportedly provided varying levels of health insurance, depending on the amount of “dues” the member was paying — ranging from about $180-$400 a month.
The money then was funneled to Smart Data Solutions, which supposedly was the benefits administrator for the insurance plans.
In a separate action, the U.S. Bankruptcy Court on Wednesday dismissed the Chapter 13 bankruptcy petition of Posey and his wife, Angela S. Posey, which was filed on March 13.
Morriss said the bankruptcy petition was filed about an hour-and-a-half before F&M Bank of Clarksville was to have held a foreclosure auction for an office building the Poseys own in Springfield.
One half of that building was the headquarters of Posey and Bachman’s enterprises, while the other half was — and still is — the district headquarters of the Tennessee Highway Patrol and the local driver’s license office. F&M Bank held a mortgage on the property of more than $800,000.
Neither Posey nor his wife showed up in bankruptcy court on Wednesday to contest a motion by F&M Bank seeking to dismiss the petition and allow the bank to sell the building. The court’s dismissal of the petition cleared the way for the sale of the building, Morriss said.
In the bankruptcy petition, Posey listed his occupation as “landlord” and said that his only income was the $9,520 monthly rent he collects from the state for the patrol and driver’s license offices.
Source: TheTennessean
William L. Hendricks Jr., 54, a former partner in the Memphis law firm Evans-Petree PC, was taken into custody by the TBI on Thursday at his Memphis law office, said Robertson County Assistant District Attorney B. Dent Morriss.
Hendricks was named as a defendant in the same March 20 indictment that accused Springfield businessman Bart S. Posey Sr. and his former business partner, Richard H. “Rick” Bachman Jr. of Austin, Texas, of the theft, conspiracy and money-laundering charges.
Posey and Bachman were arrested last week, but Hendricks’ indictment was kept a secret until police could locate and arrest him, Morriss said.
He is being transported to Springfield and will be held in the Robertson County jail pending a bail hearing, which hasn’t yet been set, the prosecutor said.
Posey, 49, is being held without bail in the Montgomery County jail in Clarksville, while Bachman, 64, is in the Travis County jail in Austin pending extradition to Tennessee, Morriss said.
Robertson County authorities decided to hold Posey in the Montgomery jail because one of his sons is a jailer at the Robertson County jail and another son is a Robertson County deputy sheriff.
The court ordered that Posey be held without bond until it could be determined where his bail money would be coming from, Morriss said. No bail hearing has been set.
“We don’t want him using his victims’ money for bail,” the prosecutor said.
All three defendants are charged with the theft of $225,000 in insurance premiums that came from some of the victims of a nationwide health-insurance scam that netted more than $20 million from about 12,000 victims, according to the Tennessee Attorney General’s office, which helped investigate the case.
The charges are related to money the state alleges that Posey and Bachman diverted from their former companies, Springfield-based Smart Data Solutions and the American Trade Association, after they were shut down in March 2010 by the Tennessee Department of Commerce and Insurance under an order issued by the Davidson County Chancery Court.
According to the indictment, Posey and Bachman arranged for premiums that were still being paid by customers who bought the phony health-insurance policies to be transferred to bank accounts they had set up in Memphis and Springfield after the state had placed their insurance operation into receivership.
Davidson County Chancellor Ellen Hobbs Lyle ruled that three Evans-Petree lawyers — Hendricks, Russell T. “Rusty” Hensley and Theodore T. Kitai — were in contempt of the court when they set up new business entities for Posey and Bachman, with the lawyers listing themselves as the officers, to continue collecting premiums for the phony insurance policies from victims after the state had shut down the original companies.
Under the ruling, all of that money, which was collected by a third-party payment processor in Florida, should have gone to the receiver appointed by Lyle to liquidate Smart Data Solutions and the American Trade Association, for the eventual benefit of victims of the scam.
The state said there was about $7 million in unpaid medical claims pending when the companies were shut down, and so far, none of those bills have been paid.
Hendricks, who had been Posey and Bachman’s lawyer for several years, resigned from Evans-Petree shortly after Lyle issued the contempt order; the other two lawyers are still associated with the firm, Morriss said.
One of the victims of the scam, Karen Saltsman of Mt. Juliet, said Thursday that she was “absolutely thrilled” to hear that some arrests had been made in the case. She said she still has about $10,000 worth of medical claims that were never paid by the health policy she bought from the American Trade Association.
“I’m glad to see that justice is finally being done, but it’s not getting me any of my money,” she said, adding that she had received a letter from the state recently saying that she might get “about $300” from the liquidation of the companies by the state Department of Commerce and Insurance.
The scam preyed on people with prior medical conditions who could not buy health insurance through normal channels, the state has said. Marketers hired by Posey and Bachman sold “memberships” in the American Trade Association that also purportedly provided varying levels of health insurance, depending on the amount of “dues” the member was paying — ranging from about $180-$400 a month.
The money then was funneled to Smart Data Solutions, which supposedly was the benefits administrator for the insurance plans.
In a separate action, the U.S. Bankruptcy Court on Wednesday dismissed the Chapter 13 bankruptcy petition of Posey and his wife, Angela S. Posey, which was filed on March 13.
Morriss said the bankruptcy petition was filed about an hour-and-a-half before F&M Bank of Clarksville was to have held a foreclosure auction for an office building the Poseys own in Springfield.
One half of that building was the headquarters of Posey and Bachman’s enterprises, while the other half was — and still is — the district headquarters of the Tennessee Highway Patrol and the local driver’s license office. F&M Bank held a mortgage on the property of more than $800,000.
Neither Posey nor his wife showed up in bankruptcy court on Wednesday to contest a motion by F&M Bank seeking to dismiss the petition and allow the bank to sell the building. The court’s dismissal of the petition cleared the way for the sale of the building, Morriss said.
In the bankruptcy petition, Posey listed his occupation as “landlord” and said that his only income was the $9,520 monthly rent he collects from the state for the patrol and driver’s license offices.
Source: TheTennessean