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Document and Benefit Fraud

Kansas City employee pleads guilty to federal health care fraud

KANSAS CITY, Mo. — A Kansas City employee pleaded guilty in federal court Thursday to his role in a scheme in which hundreds of public employees defrauded their health insurance program of more than $300,000.

This guilty plea resulted from an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), with the cooperation of the Overland Park, Kan., Police Department.

Michael King, 31, of Kansas City, Mo., pleaded guilty to one count of wire fraud May 30.

King, who was employed by the city's water department, received health insurance coverage from Blue Cross Blue Shield of Kansas City. As part of his insurance plan, King participated in a wellness program that offered incentive gift cards for participating in exercise and diet programs. Points earned through participation translated to a cash equivalent, granted via a gift card, up to a maximum of $250 annually for each insured person. The more strenuous activities earned more points.

King admitted that he and other city employees submitted false entries to the program, claiming they completed extremely strenuous activities to fraudulently obtain the maximum gift card of $250. To make even more money in this scheme, King admitted that he and others submitted false entries for other employees and their eligible dependents, in exchange for receiving a portion of the fraudulent gift card proceeds.

King made fraudulent submissions on behalf of 51 employees, resulting in 79 gift cards worth a total of $12,745. Among the fraudulent submissions, on Dec. 3, 2010 King submitted an activity entry stating that he had completed three duathlons, three marathons, two half marathons, one Olympic lifting competition, and four triathlons.

Co-defendant Matt Tholen, 29, also of Kansas City, pleaded guilty to the same charge May 13. Tholen, an emergency medical technician, admitted that he made fraudulent submissions on behalf of 62 employees, resulting in 144 gift cards worth a total of $17,600. Among the fraudulent submissions, Tholen submitted an activity entry stating that a 5-year-old child named "TJ" had completed two marathons and two triathlons.

Under federal statutes, King faces a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the U.S. Probation Office completes a pre-sentence investigation.