White-Collar Crime

Lawyer faces health-fraud charges over claimed $12M insurance scheme

A Texas lawyer has been federally indicted after allegedly siphoning $12 million from insurance plan administrators and their clients, in a Ponzi-like scheme, through his operation of a reinsurance business.

Hugh Lappe Scott Jr., 62, faces 22 health-fraud counts and 20 counts of theft from a health care benefit program. He is accused of working with an accomplice to provide purported “stop loss” coverage, through his companies, to self-insured clients seeking to limit their exposure if they suffered a major claim, reports the San Antonio Express-News.

Although Scott told those he provided with stop-loss policies that only 20 percent of what they paid would go for management and administration, he diverted much more for his own personal benefit, according to the indictment in the San Antonio case.

He and his lawyer declined to comment.

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