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Old Tappan Insurance Broker Indicted In $5.6M Health Insurance Scheme

A federal grand jury in Newark returned the indictment.
A federal grand jury in Newark returned the indictment. Photo Credit: CLIFFVIEW PILOT file photo

OLD TAPPAN, N.J. – An insurance broker from Old Tappan and a former union president were indicted by a federal grand jury for what authorities said were their roles in siphoning millions of dollars from Horizon Blue Cross Blue Shield and the United Auto Workers (UAW) Local 2326 Health Care Plan.

Lawrence Ackerman, 53, and Passaic resident Sergio Acosta, the 66-year-old former president of Local 2326, conspired to defraud Horizon Blue Cross Blue Shield of $5.6 million by covering 700 to 800 ineligible participants through bogus – or “shell’ – companies, U.S. Attorney Paul J. Fishman said.

Ackerman, who acted as the CEO of the various companies, recruited participants from across the country and “created the appearance” that they worked for them, Fishman said.

Horizon discovered the fraud and rescinded its coverage from the union, Acosta “permitted the same ineligible participants to continue being covered by the Local 2326 self-insured health care plan,” the U.S. attorney said. “After just five months, an additional $1 million in losses were incurred.”

Acosta was an employee of Local 2326 and was its president from 2002 to 2008, with responsibility for conducting the union’s operations as well as its benefits plan, Fishman said.

He became a representative and employee of the UAW International Union in 2008 yet continued to serve as the union’s trustee to the benefit plan, he said.

Fishman credited special agents of the U.S. Department of Labor Office of Inspector General for the New York Region,

the Office of Employee Benefit Security Act (EBSA) and the Office of Labor Management Standards for the investigation leading to the indictment.

The government is represented by Senior Litigation Counsel V. Grady O’Malley of Fishman’s Organized Crime/Gangs Unit.

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