Timothy Thomas, the former CEO of telemarketing company United Benefits of America, was sentenced July 2 to five and a half years in prison for his role in a health insurance fraud scheme. He was ordered to forfeit $1.5 million and pay another $2.5 million in restitution to the victims.
Here are five things to know:
1. Mr. Thomas was initially indicted in October 2014 for marketing limited benefit health plans as major medical health insurance to consumers between 2007 and 2010.
2. The former CEO of United Benefits of America hired salespeople to sell "association memberships." These memberships included bundled benefits, including limited benefit health plans, prescription drug discount cards and lifestyle benefits. Mr. Thomas and his company allegedly targeted customers who were denied traditional health insurance due to preexisting conditions. The sales pitch Mr. Thomas and his team used made these limited health plans sound equal to major health insurance plans.
3. A lawsuit was filed against Mr. Thomas by the Federal Trade Commission and Tennessee in August 2010. At that time, a judge issued an order freezing Mr. Thomas' assets and placed United Benefits of America into receivership. Immediately after the court order, Mr. Thomas withdrew $100,000 from a brokerage account and convinced a friend to deposit $528,647 into their bank account, violating the order.
4. Mr. Thomas pleaded guilty in March 2018 to committing mail fraud and criminal contempt for moving the money to his friend's bank account.
5. "Tim Thomas used misleading, high-pressure sales tactics to dupe thousands of victims into buying a product that they mistakenly believed was just as good as major medical health insurance," a press release about Mr. Thomas' sentence reads." Then, when a federal court stepped in to shut Thomas’s company down and freeze his assets, Thomas violated that court order by depositing hundreds of thousands of dollars into a friend’s bank account. These crimes implicate not only the public'’s trust but the integrity of the judicial system, and the sentence imposed today reflects their seriousness."