Four Employees and Two Investors Sentenced in Health Insurance Fraud Scheme

BOSTON – Six individuals were sentenced today for their role in a scheme perpetrated through HMA Direct, a Massachusetts health insurance company.

William O’Brien, of West Barnstable, Mass., was sentenced to 18 months in prison and three years of supervised release; Kevin Brown, of Chinquapin, N.C., was sentenced to one year and one day in prison and three years of supervised release; Michael Cassandro, of Middleton, R.I., was sentenced to eight months in prison and three years of supervised release; Shelley Lenkutis, of Framingham, was sentenced to three years of probation, the first six months of which is to be served in home confinement; Francis Gaetani, of Sutton, Mass., was sentenced to one year of probation, the first six months of which is to be served in home confinement; Ronald Anger, also of Sutton, was sentenced to one year of probation, the first four months of which must be served in home confinement.  All of the defendants were ordered to pay restitution and forfeiture.

HMA Direct offered self-funded insurance plans to small businesses in New England.  At the heart of HMA Direct’s business was “carving out” from its clients’ self-funded plans those employees who had significant health risks, and then, through false statements, arranging for those employees to be insured through traditional health insurance providers such as Blue Cross Blue Shield, Harvard Pilgrim, Tufts Health Plan, and United Healthcare.

O’Brien, Brown, Cassandro and Lenkutis participated in the carve-out scheme and subsequent lies to the health insurance providers.  O’Brien also arranged for Gaetani and Anger, who were investors in HMA Direct, to pretend that they were satisfied customers of the company and to provide fake references to prospective clients.  In addition, after state and federal agencies began investigating HMA Direct, Lenkutis and others destroyed and altered documents in order to conceal evidence of the illegal scheme.

Between August and September 2014, O’Brien, Brown, Cassandro and Lenkutis pleaded guilty to conspiracy to commit mail fraud, wire fraud, health care fraud, and false statements relating to health care matters.  In addition, Lenkutis pleaded guilty to obstruction of justice; O’Brien, Brown and Cassandro pleaded guilty to health care fraud; and O’Brien pleaded guilty to wire fraud and obtaining customer information from a financial institution by false representations.  Gaetani and Anger each pleaded guilty to wire fraud.  The defendants were indicted in August 2011.

United States Attorney Carmen M. Ortiz; Susan Hensley, Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Regional Office; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today.  The case was prosecuted by Assistant U.S. Attorneys Kristina E. Barclay and Gregg Shapiro.