White-Collar Crime

Lawyer faces charges linked to claimed $28M health insurance fraud

A South Carolina lawyer is facing federal criminal charges linked to a claimed $28 million health insurance fraud scheme.

Kathleen Devereaux Cauthen is accused of aiding others who allegedly sold some 17,000 phony policies throughout the country, via the American Trade Association, reports the Tennessean.

She was charged in a criminal information with conspiracy to commit theft or embezzlement in connection with health care and misprision of a felony, for failing to report the commission of a felony to judicial authorities. If convicted, she could get a maximum of five and three years on each charge, respectively. Each also carries a maximum $250,000 fine.

Cauthen did not respond to the newspaper’s request for comment and her lawyer declined to comment.

She previously was named as an unindicted co-conspirator in an indictment (PDF) of other defendants in the case, as the newspaper points out.

A Charleston Regional Business Journal article from 2010 provides additional details.

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