Newton Falls Woman Charged with Stealing $377K from Health Plans
YOUNGSTOWN, Ohio — A 26-count indictment filed this morning accuses Pamela Priddy of Newton Falls of stealing more than $377,000 from health-care plans she administered and using the money to pay for personal and business expenses.
Priddy was charged with 22 counts of bank fraud and four counts of theft from a health-benefit program. Priddy is the former president, founder and majority owner of the Austintown-based Health Plan Administrators LLC, or HPA, a third-party administrator of health-care plan benefits.
Companies that sponsored self-funded health-care benefit plans for employees paid HPA to administer those benefit plans, according to Justin Herdman, U.S. attorney for the Northern District of Ohio . The indictment states that HPA was “required by law and by contract” to hold, in trust, funds paid by customers in individual, segregated bank accounts for each company. The funds were to be used to pay claims from medical service providers.
From at least Jan. 1, 2012, to Nov. 13, 2013, Priddy diverted and used approximately $377,091.74 of HPA clients’ money in connection with a health-care program as general assets of HPA as well as for her personal benefit through company account misappropriations and misappropriations of health-care service provider refunds, according to the indictment.
For $151,568.66 of the funds, Priddy failed to disclose to customers there were “substantial remaining funds” in their claim accounts after terminating the business relationship with HPA.
About 178 checks totaling $225,523.08 in health-care service provider refunds were made due to HPA customers for multiple claim payments, payments made without accounting for network discounts, and payments paid in error by HPA on behalf of its customers with their health plan assets. Most of those refunds were due to former HPA customers and were received after their business relationship with HPA was over, according to the charges.
Rather than depositing the funds in customer accounts, crediting their accounts or refunding the money, Priddy deposited those funds in HPA accounts and used them for business and personal expenses, according to the indictment. Priddy also failed to disclose to customers that the funds had been received.
Following an investigation by the U.S. Department of Labor, Office of Inspector General and Employee Benefits Security Administration, and the FBI, Assistant U.S. Attorney Matthew Kall will prosecute the case.
Copyright 2020 The Business Journal, Youngstown, Ohio.
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