UnitedHealth subsidiary sued over $4.4M stolen by ex-employee
A San Diego-based bank is suing UnitedHealth Group over an embezzlement scheme perpetrated by one of its employees.
Axos Bank wants a court to force the health insurance giant to repay $4.4 million, part of what Luke Steiner stole in a phone invoice scheme. While working for Optum, a UnitedHealth subsidiary, Steiner conspired with Michael Mann to defraud lenders via fake billing.
Steiner pleaded guilty in 2020 and was sentenced to probation and ordered to pay about $12.9 million in restitution.
UnitedHealth did not respond to a request for comment. The insurer has faced mounting legal action on a variety of fronts this year.
Years-long fraud
The Steiner-Mann fraud began in 2013 and went on until late in 2019, court documents say. Mann owned ValueWise Corp., FocalPointe Group and other companies, and relied on a service known as “factoring” to perpetrate wire fraud.
Factoring involves the sale of receivables, often on an ongoing or rolling basis, for a percentage of their total value. This provides the business with a more immediate receipt of cash following the provision of goods or services, improving liquidity, in return for accepting less than the face amount of the goods that its customer is charged for it.
The scheme involved creating fake invoices that claimed large consulting/receivable fees were owed by Optum to Mann’s companies. Steiner would falsely confirm the invoices were valid and payable by Optum and submit these to finance companies, court documents say.
That allowed Mann’s entities to borrow money based on false invoices.
“Mann routinely created false invoices purportedly from FocalPointe Group and other companies he owned and controlled, falsely reflecting millions of dollars in payments purportedly due from Optum/UHG,” the Axos lawsuit said. “Mann then assigned those invoices to financing companies (including banks), which in turn provided millions of dollars to Mann’s companies.”
Axos is one of the banks that was defrauded.
The Optum connection
In its lawsuit, the bank notes that Steiner participated in the fraud while “using Optum/UHG phones, computers, and other instrumentalities of interstate commerce, and often while at Optum/UHG facilities and properties.”
Likewise, Steiner “routinely and knowingly made false statements to the financing companies Mann was defrauding to make them believe the payments came from Optum/UHG.”
Axos relied on “verification” from Optum that its employees were not breaking the law, the lawsuit claimed.
“Axos Bank would never have paid even one dollar over to FocalPointe Group if Optum/UHG had refused to sign the verification and had told Axos Bank the truth – that the invoices … were fake,” the lawsuit reads.
Mann was sentenced to 12 years in federal prison and ordered to pay more than $101 million in restitution for wire fraud, bank fraud, and identity theft.
As compensation, Steiner reportedly received about $11,300 in Amazon gift cards from Mann for his role.
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