WASHINGTON, DC — A D.C. insurance broker was sentenced Wednesday to nearly six years in prison for his role in a scheme to defraud CareFirst BlueCross BlueShield of more than $3.8 million, according to the U.S. attorney’s office for the District of Columbia.
Following a two-week federal trial in November 2019, Tarek Abou-Khatwa, 61, owner of Benefits Consulting Associates LLC, was found guilty of one count of health care fraud, three counts of making false statements related to health care matters, seven counts of mail fraud, six counts of wire fraud and five counts of identity theft, the prosecutors said.
Abou-Khatwa was involved in a scheme to defraud CareFirst BlueCross Blue Shield by creating fictitious employees and altering years of birth of actual employees by as much as 40 years to lower the average age of insured groups and fraudulently obtain lower insurance premiums, according to the prosecutors.
He then inflated the rates charged to clients and pocketed the difference, which was in excess of $3.8 million, the prosecutors said. As part of his scheme, Abou-Khatwa also stole the identities of former employees and clients, lowered their ages, and moved them in and out of shell companies in order to obtain the fraudulently lower premiums.
When groups controlled by Abou-Khatwa were audited by CareFirst, he created false census reports, false D.C. wage and tax reports, and false paystubs to coverup his fraud.
In addition to the 70-month prison sentence, Abou-Khatwa was ordered to serve three years of supervised release and pay $3,836,709.34 in restitution and forfeit $8,402,966.73.
The FBI and the U.S. Department of Health and Human Services’ Office of Inspector General investigated the case with the help of the D.C. Department of Insurance, Securities and Banking.