Lakewood Man Accused Of $10M Health Insurance Fraud

NEWARK, N.J. — A Lakewood insurance producer is accused of conspiring to defraud several Blue Cross Blue Shield health care insurance affiliates of more than $10 million, federal authorities announced Monday.

Jonas Knopf, 63, of Lakewood, has been charged with one count of conspiring to defraud three health care Blue Cross Blue Shield (BCBS) affiliates in Pennsylvania and the Washington, D.C., area, U.S. Attorney Craig Carpenito said.

Knopf was scheduled to appear before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

From 2009 to 2017, authorities allege Knopf, the chief executive officer of Madison Financial Services and a licensed insurance producer (a person licensed to sell insurance products), created 11 sham companies solely to market health insurance coverage to people who were not his employees.

These companies purported to be located and doing business in Pennsylvania and/or Virginia, and created the appearance of employment status for hundreds of individuals, largely Lakewood residents who were seeking health care coverage through BCBS benefit plans, Carpenito's office said.

The conspiracy began in Pennsylvania in 2009 and lasted until 2013, when an internal BCBS investigation uncovered irregularities in the information submitted by Knopf and others through his sham companies. Ultimately, the Pennsylvania Department of Insurance initiated an investigation and Knopf surrendered his Pennsylvania insurance producer’s license and ceased operation in the state.

The conspiracy, however, continued in Virginia until January 2017, Carpenito's office said.

Knopf’s clients or purported employees paid him inflated insurance premiums as well as providing him with funds for payroll; Knopf, in turn, issued fake payroll checks, giving the false impression they were actually employees being paid for services rendered.

The conspiracy caused the health care insurers to pay out more than $10 million in fraudulent claims, Carpenito said.

The count of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine.

Carpenito credited special agents of the FBI, under the direction of Special Agent In Charge Gregory W. Ehrie; special agents of the U.S. Department of Labor, Office of Inspector General, Office of Investigations, New York Region, under the direction of Special Agent in Charge Michael Mikulka; and investigators of the U.S. Department of Labor, Employee Benefit Security Administration (EBSA), under the direction of Regional Director Darren Cohen, with the investigation.

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