Judge dismisses $377 K fraud case filed against Newton Falls wom - WFMJ.com News weather sports for Youngstown-Warren Ohio

Judge dismisses $377 K fraud case filed against Newton Falls woman

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AKRON, Ohio -

At the request of the U.S. Attorney's office, a  federal judge has dismissed criminal charges Newton Falls woman who had been accused of stealing $377,000 from healthcare plans.

In November, federal prosecutors charged 58-year-old Pamela Priddy with 22 counts of bank fraud and four counts of theft.

When the case was filed, investigators saidPriddy stole $377,000 from healthcare plans she administered in Austintown and used the money to pay for personal and business expense.

On Tuesday, U.S. District Court Judge Sara Loi granted the motion of U.S. Attorney Justin Herdman asking the judge to dismiss the case "without prejudice."  The motion does not explain the requested dismissal.

A case dismissed "without prejudice" allows the refiling of the charges at a later date.

Prosecutors said that in 2010, Priddy started Health Plan Administrators LLC ("HPA"), a company that was a third-party administrator of healthcare plan benefits. It was located in Austintown. Priddy was HPA's President, founder, and owner majority owner.

HPA allegedly had several clients that were companies which sponsored self-funded health care benefit plans for their employees.  Officials say these companies hired HPA and paid it a fee to administer their benefit plans.  

Investigators alleged that Priddy knew HPA was required by law and by contract to establish individual segregated bank accounts for each of the client companies to hold, in trust, the funds the companies sent to HPA to pay claims from medical service providers. 

The indictment alleged that from at least January 2012, through November 2013, Priddy diverted and used approximately $377,091.74 of HPA clients' money in connection with a health care program as general assets of HPA and for Priddy's benefit.  

Also, prosecutors said that from January 2012 through January 2013, Priddy obtained approximately $151,568.66 in funds from Company's accounts. 

Priddy reportedly failed to disclose to the clients that following the termination of their business relationship with HPA the material fact that there were substantial remaining funds in the Company's client claim accounts.

The indictment claimed that from January 1, 2012, through November 13, 2013, Priddy misappropriated approximately $225,523.08 of health care service provider refunds.  Health care service providers sent around 178 checks representing refunds due to Companies to HPA.  

The refunds were due to multiple claim payments, payments made without accounting for network discounts, and payments paid in error by HPA, on behalf of HPA clients, with clients' health plan assets, as evidenced by multiple Explanation of Benefit forms and refund request letters generated by HPA or refund forms generated by service providers.  The majority of the refunds were due to former clients of HPA and were received after the clients had terminated services with HPA.

Instead of depositing those checks to Companies' client accounts, crediting clients' accounts, or refunding the money, prosecutors alleged that Pridd deposited in HPA accounts, and the funds were used for HPA business expenses and Priddy's personal benefit.  The indictment alleged that Priddy failed to tell clients that HPA received refunds from providers, but those funds were not deposited into the client claims accounts or credited to the client's bill with HPA.
 

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