NEWARK – An insurance producer from Lakewood admitted in court Monday to filing false statements to affiliates of the health insurance giant Blue Cross Blue Shield in order to obtain $1.5 million in fraudulent claims, authorities said.
Jonas Knopf, 65, pleaded guilty to one count of making false statements related to a health care benefits program, Acting U.S. Attorney Rachael A. Honig said in a news release. The hearing was held by videoconference before Chief U.S. District Court Judge Freda L. Wolfson.
Knopf, who was the CEO of Lakewood-based Madison Financial Services and was a licensed insurance producer tasked with selling insurance products, helped create two “sham companies” which existed only to market health insurance coverage to people who were not his employees, federal prosecutors alleged.
“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,” according to the news release.
Knopf used false personal information — including addresses, dates of birth, marital status and employment functions — to give Blue Cross Blue Shield a false impression that his clients were paid employees, according to prosecutors.
The scheme caused the health care insurers to pay out $1.5 million in fraudulent claims, authorities said. It continued until March 2013 when the Pennsylvania Department of Insurance ordered Knopf to surrender his Pennsylvania insurance producer’s license and cease operation in the state, authorities said.
Knopf was initially accused of a much larger scheme when he was charged in 2018, which prosecutors at the time said involved 11 sham companies and $10 million in fraudulent claims. But he admitted on Monday to a $1.5 million fraud.
Knopf is scheduled to be sentenced on Aug. 19.
His defense attorney, Michael Gilbert, did not immediately return a request for comment.
Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Tracey Agnew, a member of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit, are representing the government in the case.
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