U.S. Attorney charges Quick Health leaders with conspiracy, wire fraud

The U.S. Attorney’s Office has charged four businessmen and two companies with conspiracy and wire fraud in connection with a nationwide telemarketing fraud scheme. Several of the principals in the case and their company, Quick Health, were also investigated by the Office of the Insurance Commissioner for similar offenses, which left victims in Washington out more than $777,000.

During the OIC’s investigation, an attorney for Arthur Walsh — one of the company’s licensees — said Walsh would not sit for an interview due to “potential litigation” involving the company. An attorney for two others, Barry Adams and Albert Groff, said the two had been detained by federal agents.

Walsh and Groff were named as defendants by the Department of Justice, along with Alan Redmond and Jesus Barrera.

The DOJ outlined the alleged crimes:

“The 44-page indictment returned by the federal grand jury alleges that, from at least January 2018 through December 2022, the defendants collected tens of millions of dollars in commissions by regularly and systematically deceiving and misleading consumers seeking health insurance through bait-and-switch sales tactics, which included tricking consumers into buying limited benefit plans that provided little or no coverage by falsely representing that the plans provided comprehensive health insurance coverage, also known as “major medical insurance,” or provided coverage equivalent to major medical insurance, when they did not.”

It also details their shady tactics:

“Redmond and the manager defendants used unlicensed sales employees to sell the limited benefit plans; bundled products together to mimic major medical insurance; trained the sales employees with misleading scripts and sales pitches to use on the phones; used a variety of trade names and aliases when selling plans; engaged in “churning” and “policy-flipping” by reselling and upselling existing consumers; omitted and downplayed material restrictions about the limited plans sold; overbilled and double-billed consumers; told consumers to ignore or disregard the verification disclaimers or disclosures; altered recorded sales calls after the fact to deceive regulators; withheld information about the limited benefit plans from sales employees; ignored complaints from consumers, carriers, and regulators; and refused or delayed refunds to consumers.”

The case has also been covered in a story by Bloomberg (‘Boiler Room’ Operator Quick Health Charged by US With Fraud). The news organization also covered how companies sell fake ERISA plans — a tactic Quick Health used — to get around Affordable Care Act standards.

Back in January, Washington state Insurance Commissioner Patty Kuderer issued a warning to people looking for health insurance — namely, to make sure they’re a legitimate company.

The word of caution came after a long investigation into Seguro Medico — a company that sold health policies under a host of different names, primarily Quick Health — and testimonies from over 120 of the company’s victims.

Complaints from those victims sparked the investigation and detailed Quick Health’s fraudulent business practices. Those included failing to refund customers for cancelled plans, misrepresenting plan coverages during the sales process and making unauthorized charges to policyholders’ bank accounts — all of which have been cited by the DOJ.

Just based on the complaints the OIC received, the financial damage to victims in Washington was more than $777,000.

The OIC fined Quick Health $100,000 and ordered it to stop operations in Washington. The company didn’t appear at the appeal hearing it demanded.

Tips for purchasing health insurance

The most reliable source of individual or family health coverage remains the state Health Benefit Exchange. Anyone looking for health insurance can find a plan on the Exchange’s Washington Healthplanfinder and check the OIC’s Consumer tools page to ensure the company is registered to sell insurance in Washington.

Open enrollment for individual health plans runs from Nov. 1 to Jan. 15 each year.