After a long investigation, LA City Attorney Carmen Trutanich filed charges Wednesday against three affiliated health insurance companies controlled by investment bankers Goldman Sachs and the Blackstone accusing them of fraud.
The criminal branch filing accuses the firms of engaging “in a
long running scheme to defraud consumers involving the sale of ‘junk insurance’ …marketed as comprehensive that includes
hidden and obscure exclusions and limitations that leave policyholders without coverage.“
Under Unfair Competition and False Advertising Laws, fines could reach tens of millions of dollars.
The firms are Mega Life and Health Insurance Company, both of Califonria, and Mid-West National
Life Insurance Company of Tennessee. Their parent company, HealthMarkets, Inc.; their controlling shareholders,
Blackstone Group, L.P. and Goldman Sachs Group, Inc.; and three affiliated
non-profit associations.
HealthMarkets allegedly sold insurance worth $1.1 billion last year and has paid
special dividends to Blackstone and Goldman totaling $90 million.this year. They acquired HealthMarksts four years in an $850 million deal.
Agents are accused of using deceptive marketing techniques to “incentivize them to say
and do whatever it takes to sell a policy, including making misrepresentations
and concealing important information about the most basic terms of the coverage
being offered.”
The complaint says Blackstone and Goldman
Sachs knew or should have known that HealthMarkets was engaged in fraud and allowed it to continue.
The City Attorney’s Office has been conducting broad investigations of insurance fraud, which was at least part of the reason Trutanich had sought authority to impanel a grand jury and issue subpoenas — powers the City Council successfully fought against.
Maybe Trutanich needs to learn you get cooperation by engendering trust, not throwing your weight around and being a bully. It’s NOT that people fear him “because I’m strong” like he says in Hillel Aron’s Neontommy.com article. (Which has a funny parody from someone about what he REALLY thinks about Jan Perry and a few others.) He gave her good reasons to be afraid for speaking her mind and holding a different opinion on an issue. Maybe she is a lackey for AEG but Cooley and Trutanich want their money too, are sucking up to Tim Leiwike also.
However insurance companies are a fair target and with the Obama bill they are only made stronger – unfortunately, the Republicans insisted the same old insurance companies control all healthcare plans but now, will have the government requiring everyone to buy a plan from them, with the IRS adding people galore to sift through our filings and look for scofflaws who don’t. We’ll just see insurance companies get richer while our waits at doctor’s offices and especially hospitals will get longer with the added people they have to serve. And they can still deny coverage for pre-existing conditions and hike rates to the sky – even as MediCare has been decimated to pay for the bill, hurting seniors on a low income, one of the groups Obamacare initially started out to help. What a mess.
I’m tired of the canard about the supposed threats to Jan Perry: we only have Perry’s version of what happened in that meeting. We don’t have Trutanich’s version, because he is prevented by attorney-client privilege from telling anyone who said what to whom. The only person who can waive attorney-client privilege in this matter is Perry herself. How can anyone believe her story when she won’t allow Trutanich’s to tell us his version? There were other people at that meeting who could confirm who is lying and who isn’t.
Doesn’t the world already have enough private-sector ambulance chasers handling this kind of litigation?
I’d like to see the City Attorney’s office go after fraud and corruption within City Hall, or perhaps something novel, like code enforcement?
This looks more political than legal. Did anyone vote for him based on a promise to sue insurance companies?
The Zoning Code is being gutted with approval by the City Attorney.
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