Millions of dollars disappeared under control of accused health insurance fraudster, FTC says

Accused health insurance fraudster Steven J. Dorfman lied when he told a federal court that he did not control any overseas bank accounts, the FTC said in a filing outlining fresh evidence in its case against Dorfman and his companies.

As it pursues permanent shutdown of the operation it accuses of duping consumers into thinking they were buying comprehensive health insurance covering preexisting conditions, the FTC is asking what happened to millions of dollars in those overseas accounts.

In an April 8 filing in U.S. District Court in Fort Lauderdale, the agency presented what it said was evidence showing that Dorfman, founder and CEO of Hollywood-based Simple Health Plans LLC, established the bank account for a Panamanian call center that received nearly $10 million from Dorfman’s companies.

He also controlled the bank account for another offshore operation used by Dorfman’s companies — a call center in the Dominican Republic that Dorfman referred to as a “branch” of one of his own companies, the new filing states. A previous filing showed that $10.7 million was transferred to that account.

That meant “telemarketers should create a sense of ‘urgency and fear’ in the uninsured consumers as to whether they are eligible for any type of plan,” the FTC said. Stoking such fears increased the likelihood the prospects would agree to buy the company’s products, which were not comprehensive health insurance but a package of discounts, wellness plans and limited indemnity plans worth a maximum annual reimbursement potential of $3,200.

In December, the FTC said 37,000 victims are still paying millions of dollars each month for the sham plans they purchased before the shutdown. But unless the court rules in the FTC’s favor and keeps the operation closed, the receiver overseeing the assets would not be authorized to reach out to those customers and give them the opportunity to cancel, the FTC said.

Despite the operation taking in nearly $150 million in commissions since 2013, the FTC found just $3.9 million when it seized Dorfman’s corporate and personal accounts, records state.