N.J. Businessman Pleads Guilty in Health Benefits Scam

New Jersey Attorney General Peter Harvey announced that a Bergen County man has pleaded guilty to stealing health insurance benefits by reportedly creating a phony business group in order to fraudulently purchase group health insurance coverage for individuals not employed by the company. The fraud resulted in non-eligible “employees” fraudulently obtaining more than $110,000 in ineligible group benefits and insurance coverage.

According to Vaughn McKoy, director, Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden Brown, Barry W. Kallenberg, 51, of Bergen County, pled guilty before Bergen County Superior Court Judge William Meehan to a criminal Accusation which charged theft by deception (3rd degree). A third degree crime carries a maximum sentence of up to five years in state prison and a fine of up to $15,000.

Additionally, Kallenberg may by ordered to pay restitution and subject to civil insurance fraud fines pursuant to the civil Insurance Fraud Prevention Act. Kallenberg is scheduled to appear before Judge Meehan on March 26, 2004 for sentencing.

In the Dec. 19 guilty plea hearing before Judge Meehan, Kallenberg reportedly admitted that he created a fictitious real estate management business group in order to purchase group health insurance for five individuals not entitled to group coverage because they were not bona fide employees of a bona fide business.

The Accusation charges that in February, 1999, Kallenberg applied to Horizon Blue Cross and Blue Shield of New Jersey for a small employer health benefits policy in order to provide health coverage at a lower premium employee group rate. The investigation revealed that between January, 1996 and January, 1999, $111,500 in health insurance claims were submitted to Horizon Blue Cross and Blue Shield on behalf of the purported employees.