Lakewood Man Admits $1.5M Health Insurance Fraud

NEWARK, NJ — An insurance producer from Lakewood has admitted filing false statements in connection with $1.5 million in fraudulent claims by Blue Cross Blue Shield health care affiliates, Acting U.S. Attorney Rachael A. Honig said Monday.

Jonas Knopf, 65, of Lakewood, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to one count of making false statements related to a health care benefits program, Honig's office said.

Knopf was chief executive officer of Madison Financial Services in Lakewood starting in 2009 and a licensed insurance producer – a person who is licensed to sell insurance products.

Madison Financial Services was the parent company of two sham companies created by Knopf and others solely for marketing health insurance coverage to people who were not his employees. These companies purported to be located and doing business in Pennsylvania and created the appearance of employment status for hundreds of individuals, largely Lakewood residents, who were seeking health care coverage through Blue Cross Blue Shield benefit plans.

The fraud lasted until March 2013, when the Pennsylvania Department of Insurance caused Knopf to surrender his Pennsylvania insurance producer’s license and cease operation in the state, Honig's office said.

Knopf used false personal information, including false addresses, dates of birth, marital status and employment, to give Blue Cross Blue Shield the impression that his clients were actually employees being paid for services rendered. The scheme caused the health care insurers to pay out $1.5 million in fraudulent claims.

The count of making false statements relating to a health care benefit program carries a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the gross gain or twice the gross loss from the offense, whichever is greater. Sentencing is scheduled for Aug. 19, Honig's office said.

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