Information and Alerts

Government Actions

USA vs Steven Dorfman, Candida Girouard, John Sand.

As of July 25, 2024:

A district court judge in southern Illinois sentenced the owner of a south Florida-based telemarketing company to 25 years in federal prison for causing his employees to sell limited indemnity health insurance plans to unsuspecting consumers by means of false and deceptive practices.

Steven Dorfman, 40, of Fort Lauderdale, Florida, owned, operated, and functioned as the CEO of a south Florida telemarketing company known as Simple Health. In February, a jury convicted Dorfman of one count of conspiracy to commit mail and wire fraud, four counts of mail fraud and eight counts of wire fraud in connection with his operation of Simple Health.

According to court documents and evidence presented during the trial, Dorfman’s company trained employees to use deceptive sales tactics to scam consumers into purchasing the limited indemnity insurance plans. These plans cover relatively low amounts of medical expenses. Once the low caps were reached, the consumers were then responsible for paying 100% of their medical expenses.

At Dorfman’s direction, Simple Health salespeople utilized false and misleading scripts to mislead consumers about the amount of coverage provided by the policies. Following these scripts, salespeople would make statements such as “the whole idea of this plan is to make your out-of-pocket expenses as low as possible” and “when all is said and done, you’ll end up owing pennies on the dollar.” Evidence at trial also established that Simple Health’s commissioned salespersons frequently told additional, off-script lies to the consumers to get them to buy them to buy the policies, with little to no effort by Dorfman to stop this practice.

Using the deceptive scripts and the blatant lies of their salespersons, Simple Health sold these limited indemnity policies to more than 400,000 unsuspecting victims across the country from May 2012 through November 2018. This fraudulent conduct generated more than $190 million in revenue for Simple Health. The company sold more than 1,400 of these limited indemnity policies to individuals from all 38 counties in the Southern District of Illinois.

Two co-conspirators were also charged in the conspiracy. Candida Girouard, 47, of Valrico, Florida, was sentenced to 6 months’ imprisonment in May. Simple Health’s vice president of sales, John A. Sand, 50, of Fort Lauderdale, Florida, was tried at the same time as Dorfman and was convicted by the jury on all counts contained in the indictment. As a post-trial hearing, however, the federal judge assigned to this case granted Sand’s motion for judgment of acquittal notwithstanding the verdict.  The Government is currently considering whether to appeal that decision.

Following imprisonment, Dorfman will serve five years of supervised release.

The investigation began with a referral from the Federal Trade Commission’s Midwest Regional Office in Chicago. The FTC filed a complaint for civil injunctive relief in October 2018. The FTC’s action put an end to the fraud and a court-appointed receiver was appointed to take over Simple Health’s business operations.

LINK: https://www.justice.gov/usao-sdil/pr/telemarketing-company-ceo-convicted-health-insurance-policy-scheme-sentenced-federal

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As of February 24, 2022:

A federal  grand  jury  in  East  St.  Louis  returned  an indictment  charging  a  former  owner  and  two  top  tier  executives  of  a  south Florida  telemarketing business known as Simple Health with federal fraud offense.   Former owner Steven Dorfman, 37, of Fort Lauderdale, FL, former Chief Compliance Officer, Candida L. Girouard, 45, of Valrico, FL, and former Vice President of Sales John A. Sand, 47, of Fort Lauderdale, FL, were all charged with one count of conspiracy to commit mail and wire fraud, four counts of mail fraud, and eight counts of wire fraud.

Simple Health, also known as Health Benefits One, sold health insurance policies over the phone. The  vast  majority  of  the  policies  sold  by  Simple  Health  were  limited  indemnity  plans.  
Limited indemnity plans have a relatively low cap on the amount of medical expenses they will cover.   After those caps are reached, the patients are responsible for paying 100% of their 
medical expenses out of their own pockets.

The  indictment  alleges  that  Simple  Health  employed  a  deceptive  sales  script  to  trick people  into purchasing the limited indemnity plans.   Among other things, the script required the 
Simple Health salespersons to tell the customers that:   “The whole idea of this plan is to make your out of pocket expenses as low as possible . . . .” and “When all is said and done, you end up with pennies on the dollar!!”   Relying on these and other false and misleading representations, thousands of people across the country purchased limited indemnity plans from Simple Health.   According to the indictment, after customers purchased these policies, they frequently called Simple Health’s Customer Service Department and complained that (1) they had incurred significant medical expenses that they had been led to believe would be covered, but were not; (2) their doctors and hospitals did not accept the limited indemnity plans; and (3) their prescription drug costs were not covered, contrary to what they were told when the purchased the policies.

Dorfman, Girouard, and Sand are scheduled to appear in federal court in East St. Louis on Monday, March 7, 2022, for their arraignments.   Because the alleged scheme was conducted via telemarketing and victimized ten or more persons over the age of 55, the maximum penalty for the conspiracy count is 30 years, pursuant to the SCAMS Act.   Each of the mail and wire fraud counts carries a maximum sentence of up to 20 years in prison.   In addition, the defendants can be ordered to pay full restitution to the victims.

LINK: https://www.justice.gov/usao-sdil/pr/owner-and-two-top-executives-south-florida-health-insurance-telemarketing-business