According to court documents, from January 2008 through March 2010, Posey and his co-conspirators engaged in a widespread fraud designed to defraud customers looking for health insurance. Through ATA and SDS, Posey sold and caused others to sell bogus health insurance products to unsuspecting customers.
Posey admitted he duped customers by denying legitimate health insurance claims, selling an insurance product that was not backed by a legitimate underwriter and embezzling millions of dollars of insurance premiums paid to his company by victims.
Posey used those premium payments to buy, among other things, a Harley Davidson motorcycle, a sports car, college football tickets and 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. Posey admitted some of his victims had pre-existing conditions and were stuck with thousands of dollars of unpaid medical bills due to his fraud.
As part of his plea agreement, Posey pleaded guilty to mail fraud and to embezzling health care fraud premium payments. He faces up to 20 years in prison on the mail fraud conviction and up to 10 years for the embezzlement conviction. Posey also agreed to forfeit more than $6 million. He will be sentenced April 30.