EAST ST. LOUIS, Ill. – A Florida-based telemarketing company CEO has been convicted of defrauding thousands of health insurance customers, including southern Illinois residents, in a widespread scam.
Prosecutors with the U.S. Attorney’s Office of the Southern District of Illinois said Steven Dorfam, 40, has been indicted for mail and wire fraud in connection with defrauding customers through his company, Simple Health.
Prosecutors say Dorfam would direct his sales agents at the telemarketing company to lie to consumers by tricking them into believing their fixed insurance plans would function as major medical insurance with comprehensive coverage.
Despite promises made to victims that their policy would cover most of their medical expenses, these policies often left most customers uninsured and would provide little to no coverage when attempting to use the policy.
Prosecutors say many of Simple Health’s customers owed thousands of dollars in medical bills that were not covered by their insurance policies.
Prosecutors say court documents and evidence showed Dorfam’s company trained employees to use deceptive sales tactics to scam consumers into purchasing the fixed insurance plans, which covered low amounts of medical expenses.
Simple Health salespeople would often mislead consumers about the coverage provided in the policies. According to prosecutors, 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.”
Prosecutors also say that salespersons would often tell additional, off-script lies to consumers to get them to buy policies. Dorfam would make little to no effort to stop the practice of his salespeople going off-script.
More than 400,000 unsuspecting customers fell victim to Simple Health’s scam between May 2012 and November 2018. More than 1,400 of Simple Health’s policies were sold to individuals from all 38 counties in the southern district of Illinois.
Simple Health generated more than $190 million in revenue during the scam.
Dorfam was convicted on 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.
Two co-conspirators were also charged with fraud. Candida Girouard, 47, from Valrico, Florida, was sentenced to six months of imprisonment in May. Simple Health’s vice president, John A. Sand, 50, from Fort Lauderdale, Florida, was tried alongside Dorfman and convicted on all counts contained in the indictment.
