WASHINGTON - Tarek Abou-Khatwa, also known as Dean Addem, 58, of Washington, D.C., has been indicted on charges that he defrauded CareFirst, a health care benefit program, and through his scheme, gained for himself in excess of $2 million.
The indictment was announced by U.S. Attorney Jessie K. Liu, Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Stephen C. Taylor, Commissioner of the District of Columbia Department of Insurance, Securities and Banking.
Abou-Khatwa was arrested earlier today and pled not guilty to the charges this afternoon in the U.S. District Court for the District of Columbia. He was released on high-intensity supervision pending a status hearing set for April 10, 2018. The 24-count indictment charges him with violations of health care fraud, false statements to a health care benefit program, wire and mail fraud, and identity theft, which is a District of Columbia Code offense. The indictment also includes a forfeiture allegation seeking all proceeds that can be traced to the fraud scheme. The indictment was returned on March 20, 2018, and unsealed today.
According to the indictment, Abou-Khatwa defrauded CareFirst BlueCross BlueShield (“CareFirst") a not-for-profit, private health care benefit program, offering health insurance plans for individuals and groups, as well as other products. Group health insurance coverage is a policy purchased by an employer and offered to eligible employees (and often to the employees’ family members) as a benefit of working for that employer.
The insurance premium rates for group contracts at issue in this indictment were based on multiple factors, the most significant one being the average age of the covered employees listed on the census and wage/tax forms for the employer groups. Abou-Khatwa, through his company, was a broker for CareFirst until May 2011, and received commissions from CareFirst as his compensation as a broker; later he continued to work through other CareFirst brokers.
According to the indictment, Abou-Khatwa defrauded CareFirst by creating fake groups of insured individuals, which included both fictitious names and real people with altered years of birth, to fraudulently obtain lower insurance premium quotes from CareFirst; once the premium rates were set, he had the CareFirst invoices sent directly to him instead of his clients, marked up the insurance premiums charged by CareFirst, and pocketed the difference between the two. Through this scheme, Abou-Khatwa allegedly fraudulently siphoned off in excess of $2 million in illegal proceeds, and diverted the proceeds of the fraud for his personal use and benefit.
The indictment further states that when CareFirst undertook audits of the employer groups, Abou-Khatwa submitted false employee census reports and wage/tax forms to CareFirst to justify the listings of employees in the shell company contracts.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
In announcing the charges, U.S. Attorney Liu, Assistant Director in Charge Vale, and Commissioner Taylor expressed appreciation for the work performed by Special Agents and forensic accountants from the FBI’s Washington Field Office and fraud investigators from the District of Columbia Department of Insurance, Securities and Banking. They also acknowledged the efforts of those working on the case from the U.S. Attorney’s Office, including former Forensic Accountant Crystal Boodoo and current Forensic Accountant Bryan Snitselaar; former Assistant U.S. Attorneys Christopher Kavanaugh, Philip A. Selden, and Richard DiZinno; Assistant U.S. Attorneys Kendra Briggs and Peter Lallas; former Paralegal Specialists John Lowell, Angela Lawrence, and Jessica Mundi; Paralegal Specialists Donna Galindo, Joshua Fein, and Aisha Keys, and Litigation Technology Specialist Claudia Gutierrez. Finally, they commended the work of Assistant U.S. Attorney Diane Lucas, who is assisting with forfeiture issues, and Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case.
Source: U.S. Department of Justice, Federal Bureau of Investigation (FBI)
