Ex-employee allegedly embezzles $4.4M from UnitedHealth subsidiary, resulting in a lawsuit
In a series of legal developments this year, UnitedHealth Group has found itself embroiled in a complex embezzlement scandal involving its subsidiary, Optum. The scheme, which began in 2013 and continued until late 2019, has led to mounting legal action against the health care giant.
At the heart of the scandal are two individuals, Luke Steiner and Michael Mann. Steiner, who pleaded guilty to an embezzlement scheme in 2020, and Mann, who was sentenced to 12 years in federal prison and ordered to pay over $101 million in restitution for wire fraud, bank fraud, and identity theft, were the architects of the fraud.
The fraudulent activity involved the use of a service known as "factoring," where receivables, often sold on an ongoing basis for a percentage of their total value, were manipulated. Steiner and Mann conspired to create fake invoices claiming large consulting/receivable fees were owed by Optum to Mann's companies. To add legitimacy to these false invoices, Steiner made false statements to the financing companies Mann was defrauding, leading them to believe the payments came from Optum/UHG.
One of the banks defrauded in the embezzlement scheme was Axos Bank. Axos Bank acted as a financial partner to Optum in transactions related to the fraud scandal. The lawsuit claims that Axos Bank would not have paid money to FocalPointe Group, one of Mann's entities, if Optum had refused to sign the verification and had told the truth about the invoices. As a result, Axos Bank is suing UnitedHealth Group to force repayment of $4.4 million that was stolen in the scheme.
John Hilton, our website Senior Editor, has covered business and other beats in more than 20 years of daily journalism. You can follow him on Twitter @INNJohnH. John Hilton may be reached at [email protected] for more information on this developing story.
It is alleged that Steiner used Optum/UHG phones, computers, and other instrumentalities of interstate commerce during the fraud. Steiner reportedly received about $11,300 in Amazon gift cards from Mann for his role in the scheme.
This embezzlement scheme has cast a shadow over UnitedHealth Group's reputation and raised questions about the company's internal controls and oversight. As the legal proceedings continue, it remains to be seen how this scandal will unfold and what consequences, if any, UnitedHealth Group will face.
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