The CEO of a South Florida-based telemarketing company has been sentenced to 25 years in federal prison after a district court judge in southern Illinois found him guilty of orchestrating a deceptive health insurance scheme. Steven Dorfman, 40, from Fort Lauderdale, led Simple Health in misleading consumers into buying limited indemnity health insurance plans, which were sold through false promises and misleading tactics.
During the trial, evidence revealed how Dorfman’s company trained its employees to aggressively sell these plans, which were inadequate in coverage despite how they were presented. The court documents, outlined on the U.S. Department of Justice’s website, showed that the sales tactics were crafted to purposefully obscure the truth about the insurance policies, which covered very little and quickly hit their low caps, leaving consumers to fully pay subsequent medical expenses.
"This sentencing is a statement that mail fraud will not be tolerated," said Acting Inspector in Charge, John Jackman of the U.S. Postal Inspection Service. Over six years, Simple Health managed to defraud over 400,000 victims, generating over $190 million in revenue through these illusory policies.
According to U.S. Attorney Rachelle Aud Crowe, Dorfman directed his sales agents to "lie to consumers and trick them into believing the limited indemnity insurance plans they were peddling would function like major medical insurance." The false assurance that consumers' out-of-pocket expenses would be minimal and that they would owe "pennies on the dollar" was a common pitch, even though it bore little resemblance to the harsh reality faced by policyholders left with massive bills.
The investigation that led to Dorfman's conviction originated from a referral by the Federal Trade Commission’s Midwest Regional Office in Chicago. Following the conclusion of the federal sentence, Dorfman is expected to serve five years of supervised release. His co-conspirators also faced justice, with varied outcomes, whereby Candida Girouard received a 6-month sentence, and John A. Sand was acquitted after a post-trial judgment despite a jury's conviction. The government is contemplating an appeal against Sand’s acquittal.
Assistant U.S. Attorneys Scott Verseman and Peter Reed were commended for their roles in the prosecution, which stemmed from an extensive investigation spearheaded by the St. Louis Office of the U.S. Postal Inspection Service.
