The Chicago Daily Law Bulletin Published Timothy Liam EPSTEIN's Article Entitled, "Ex-NFL players’ health-care scheme indictment a warning to all."

On Dec. 6, the Department of Justice filed charges against 10 former NFL players alleging they operated or assisted in a fraudulent scheme that resulted in defrauding $3.9 million from the NFL’s health-care benefit program for retired NFL players. United States v. Buckhalter, 5:19-CV-205-KKC (E.D. Ky. 2019); United States v. McCune, et al., 5:19-CV-206-KKC (E.D. Ky. 2019). If the alleged scheme articulated in the indictments is found to be true, it is likely those involved will face prison time.

The Gene Upshaw NFL Player Health Reimbursement Account Plan was established through the 2006 collective bargaining agreement between the NFL and the National Football League Players Association. The reimbursement plan provides qualified retired NFL players, their spouses and dependents (collectively, plan participants) tax-free reimbursements for medical expenses and equipment. The reimbursement plan’s potential maximum value is $350,000.

In order to receive a reimbursement, plan participants submit a reimbursement request form and required additional documentation. This request is transmitted electronically to a data center in Lexington, Ky., which is then routed and reviewed by Cigna Healthcare employees in Pennsylvania. If Cigna decides to pay the claim, plan participants either receive a check or are sent a direct deposit.

Two indictments have been filed in the Eastern District of Kentucky against two-time pro bowler Clinton Portis and nine other former NFL players alleging wire fraud, health-care fraud and/or conspiracy to commit these crimes. These charges arise from an alleged collaborative scheme where the players submitted fabricated reimbursement requests and received “reimbursements” despite there never being a reason to be reimbursed.

According to the indictments, some of the charged players submitted several reimbursement requests accompanied with completely fabricated health-care provider documents. The fraudulent documents ranged from invoices from medical equipment companies to prescriptions from health-care providers.

Consequently, the players misrepresented to Cigna that they needed such medical equipment, and because of the reimbursement plan, they were entitled to be reimbursed for never-purchased equipment. For example, one player received more than $56,000 for a never-purchased cryotherapy chamber.

This alleged fraud was not conducted independently, but instead, operated like a pyramid scheme.

The indictment alleges that the players at the top of the scheme recruited other players to participate in the fraud. These recruited players would provide the higher-ups with the information necessary to submit a fraudulent reimbursement request.

The recruited players would receive the reimbursement check, and subsequently, provide the player who filed the fraudulent claim a kickback. These kickbacks ranged from a few thousand dollars to more than $10,000 per fraudulent claim.

Of the almost $4 million alleged to have been fraudulently obtained through this scheme, $3.4 million was obtained in an 18-month period.

Eight of the 10 players have been charged with wire fraud, which is codified as 18 U.S.C. Section  1343. Wire fraud consists of three elements: (1) a scheme or artifice to defraud; (2) use of interstate wire communications in furtherance of the scheme; and (3) intent to deprive a victim of money or property. United States v. Prince, 214 F.3d 740, 747-48 (6th Cir. 2000).

The alleged facts provided in the indictments support all three elements of wire fraud. First, the charges go into great detail of how the players operated their multistep scheme to receive reimbursements checks for never-purchased medical equipment.

Second, because the reimbursement request forms needed to be faxed to a data center in Kentucky, the second element almost undoubtedly is satisfied, as none of the charged players reside in Kentucky. In fact, two of the charged players are alleged to have called Cigna, and by impersonating other involved players, received status information regarding the fraudulent reimbursement claims.

And third, the allegations do not indicate that any of the players charged did not intend to be unjustly enriched for a combined $3.9 million. If found guilty, each player could face up to 20 years in prison.

The same eight players have also been charged with health-care fraud. Pursuant to 18 U.S.C. Section  1347, the players will be guilty of health-care fraud if they knowingly and willfully executed or attempted to execute the scheme to either (i) defraud the reimbursement plan or (ii) obtain money or property owned by or in control of the reimbursement plan by fraudulent pretenses.

Similar to the wire fraud charges, the alleged facts provided in the indictments strongly support the finding that the players are guilty of health-care fraud. Specifically, the allegations that forged doctors’ signatures, completely fabricated prescriptions and other fraudulent documents were used to receive reimbursements for never-purchased medical equipment are not favorable facts for the charged players. A conviction of health-care fraud can result in up to 10 years in prison.

Lastly, all 10 players are charged with conspiracy to commit wire and health-care fraud. Generally, conspiracy to commit wire or health-care fraud require two or more persons agreeing to commit the crime (in this case wire and health-care fraud), with the defendants knowingly and voluntarily joining the conspiracy. United States v. Harrison, 663 Fed. Appx. 460, 464 (6th Cir. 2016).

Given the collaborative characteristics of the alleged scheme and the fraudulent documents the Justice Department says they have obtained, prosecutors have a strong chance of obtaining convictions.

Among other things, the fact that confidential health information is required to receive reimbursements, and players are alleged to have filed requests for others, an agreement to commit wire and/or health-care fraud seems apparent.

The burden of proof is on the government to establish that each player committed these crimes beyond a reasonable doubt. Nonetheless, U.S. Assistant Attorney General Brian Benczkowski appears to be quite confident that convictions will be obtained, illustrated by his statement introducing the charges: “[t]en former NFL players allegedly committed a brazen, multimillion-dollar fraud on a health-care plan … Today’s indictments underscore that whoever you are, if you loot health-care programs to line your own pockets, you will be held accountable by the Department of Justice.”

If any of the charged players agree with Benczkowski’s likelihood of conviction belief, it is possible those who were less involved will attempt to negotiate a plea deal. It is likely the Justice Department will entertain this option with less involved players to ensure they convict those who operated and profited the most from this fraudulent scheme.

As Benczkowski made clear, the Justice Department will not treat this case lightly and will likely use this case as an opportunity to demonstrate the consequences that will be served to those who unjustly enrich themselves from a program intended to aid and provide financial support to NFL players who rely on it.

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