Three officers of an allegedly bogus health insurance company were arraigned in Los Angeles federal court Monday on charges of bilking more than 22,000 policyholders in the 50 states and leaving $30 million in unpaid claims.
The company, Employers Mutual, Carson City, Nev., allegedly collected more than $14 million in premiums in 2000 and 2001 -- but paid only $3 million in claims -- after falsely telling employers it was insured by three credible companies.
The 37-count indictment by the U.S. attorney in Los Angeles accuses Employers Mutual officers James Graf, 43, William Kokott, 60, and Kari Hanson, 43, of committing mail fraud, misappropriating funds, obstructing justice, lying to federal agents and falsifying evidence.
In 2001, the U.S. Labor Department sued to freeze the company's assets, and Colorado, Florida, Nevada, Oklahoma and Texas ordered it to stop selling insurance in their jurisdictions.
The company is not to be confused with Employers Mutual Insurance Co. of Des Moines, Iowa.