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Watchdog: Follow the Money

Ohioan charged with embezzling $2.9M from insurer

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News,Business,Watchdog,Follow the Money

CLEVELAND (AP) — A former longtime employee of Ohio's biggest health insurance company has been charged in federal court in Cleveland with embezzlement for diverting nearly $3 million in phony payments that he deposited into his own bank account.

Joseph Satava, 69, of the Cleveland suburb of Sheffield Lake, was charged Monday. Prosecutors said in court documents Satava used the money to support a more expensive lifestyle than he normally could have afforded, including household furnishings, his son's expenses, vacations and a retirement home on Lake Erie.

First hired by Medical Mutual of Ohio in 1971, he is accused of creating nearly 1,400 phony checks that he deposited into his own account between August 1997 and November 2013. He served as the company's manager of credit and collections for 20 years and had the authority to approve payment amounts of up to $5,000.

Satava devised a scheme where he would create reimbursement checks in the names of people who were insured by Medical Mutual through their employers, prosecutors said. He would write on a form that people were being reimbursed after their health insurance coverage had been denied. Satava would then forge the person's signature sign the back of the check himself and deposit them into his bank account using ATM machines, prosecutors said.

He got away with the embezzlement scheme for years, prosecutor said, by charging the phony reimbursement to a company account through which billions of dollars flowed, making the relatively small amounts difficult to detect. Satava would typically create between two and four of the phony reimbursements a week, prosecutors said.

Medical Mutual issued a statement Monday that said none of its members were affected. The losses were covered by insurance and the company cooperated with the FBI and federal prosecutors, the statement said.

A charge by information generally indicates that a defendant has agreed to plead guilty and to cooperate with prosecutors.

Satava's attorney did not return telephone calls seeking comment. Calls to Satava's home also were not returned.

Prosecutors said in the information that they will ask a judge to seize $2.9 million of Satava's assets if he is found guilty.

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