A Tennessee man has pleaded guilty to masterminding a multimillion-dollar insurance scam that victimized thousands of people across the country.
Bart Sidney Posey Sr., 50, is the former owner of Tennessee-based companies American Trade Association (ATA) and Smart Data Solutions (SDS). According to Don Cochran, US attorney for the Middle District of Tennessee, between 2008 and 2010, Posey and his co-conspirators engaged in a wide-ranging scam that targeted consumers looking for health insurance.
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Through ATA and SDS, Posey sold and caused others to sell phony health insurance products, according to the US Attorney’s Office. Posey admitted in his plea to denying legitimate health insurance claims, selling an insurance product that wasn’t backed by a legitimate underwriter, and embezzling millions of dollars in insurance premiums paid by his customers.
According to prosecutors, Posey used customers’ premium payments to buy, among other things, a Harley Davidson motorcycle, a sports car and football tickets. He also used customer money to pay off a $500,000 personal mortgage.
“Posey operated his companies much like a Ponzi scheme – paying off some insurance claims with new premiums to create the appearance of a legitimate insurance carrier and to keep the scheme going,” the US Attorney’s Office said. “Posey admitted that some of his victims had pre-existing conditions and were stuck with thousands of dollars of unpaid medical bills due to his fraud.”
Posey faces up to 30 years in prison. He also agreed to forfeit more than $6 million. He will be sentenced in April.
