KANSAS CITY, Mo. — Seven local government employees – six in Kansas City, Mo., and one in Jackson County, Mo. – were arrested Thursday for their alleged roles in a scheme in which hundreds of public employees allegedly defrauded their health insurance provider.
The indictment and arrests resulted from an investigation led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), in cooperation with the U.S. Postal Inspection Service and the Overland Park (Kan.) Police Department.
Investigators uncovered a scheme in which hundreds of public employees defrauded Blue Cross and Blue Shield of Kansas City (BCBS) of more than $300,000 by falsely claiming to have competed for cash incentives in sporting events, such as marathons, triathlons and Olympic-lifting competitions.
The following people were arrested in connection with this investigation:
- Crystal Burgin-Woods, 42, an employee of the Kansas City, Mo., municipal court;
- Matt Stivers, 41, an employee of the city's information technologies department;
- Kim Blair, 36, an employee of the parks and recreation department;
- Sylvia Sims, 37, also an employee of the parks and recreation department;
- Matt Tholen, 29, an emergency medical technician;
- Michael King, 30, an employee of the city's water department; and
- Michael Olukotun, 39, a corrections officer at the Jackson County, Mo., jail.
The seven were charged in a 21-count indictment that was returned under seal by a federal grand jury Wednesday. That indictment was unsealed and made public upon the arrests and initial court appearances of Burgin-Woods, Stivers, Sims, Tholen, King and Olukotun.
Points to Blue Program
The federal indictment alleges that all of the defendants engaged in a scheme to defraud their health insurance provider, BCBS. The provider launched a new benefits program in April 2010, called Points to Blue. Under that wellness program, members could log in to a website and identify healthy activities in which they participated to receive points. For each 1,000 points earned through healthy activities, members received one dollar of credit towards either a gift card or preloaded debit card, up to an annual limit of $250 per member. Each dependent in the member's household could also participate in healthy activities to accumulate points, up to an annual limit of $250 for each dependent.
More points were awarded for more strenuous activities; the maximum points awarded for a single activity was 10,000 points for extremely strenuous activities, such as marathons and triathlons.
Within the first six months of the Points to Blue wellness program, the indictment states, employees of both Jackson County and Kansas City began falsifying their activity entries by claiming to have completed the most strenuous activities to obtain the maximum $250 gift card or debit card. The indictment alleges that all six defendants, in addition to making false activity entries for themselves and their dependents, solicited their co-workers to engage in the fraud scheme as well. The indictment alleges they submitted false activity entries on behalf of a co-worker or a co-worker's dependent; in exchange they kept a portion of the $250 award (usually $50), and the co-worker received the remainder.
According to the indictment, the employees received varying numbers of cards:
- Burgin-Woods fraudulently received 383 gift cards totaling $185,655;
- Stiver fraudulently received 248 gift cards totaling $39,070;
- Blair fraudulently received 238 gift cards totaling $30,485;
- Tholen fraudulently received 144 gift cards totaling $17,600;
- Olukotun fraudulently received 71 gift cards totaling $16,480;
- King fraudulently received 79 gift cards totaling $12,745; and
- Sims fraudulently received 90 gift cards totaling $8,925.
As a result of the fraud scheme, 1,253 fraudulent gift cards were issued, totaling $310,960.
Each defendant has been charged with three counts of wire fraud. For example, Burgin-Woods, Stivers, Blair, Tholen and Olukotun allegedly claimed that children younger than 5 years old competed in multiple marathons and triathlons. King allegedly claimed that he participated in three duathlons, three marathons, two half-marathons, an Olympic lifting competition and four triathlons.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.