Health scams: Fakes and pains

By James Quiggle
July 1, 2005
Pete Orr was a friendly, well-liked NASCAR driver who’d carved out more than 300 victories on the searing asphalt raceways. But Pete rode the biggest race of his short life under the cool white sheets of a hospital bed.

Cancer had struck him hard, and the Florida man had bought health coverage from an outfit called TRG Marketing. TRG had promised Pete discounted prices and generous benefits — a godsend for a once-athletic man fighting for his life.

But TRG then refused to pay up as his urgent medical bills surged past $250,000. Pete finally died in 2002, leaving his grieving widow Terri saddled with a bewildering stack of unpaid bills.

TRG was a fake insurance company.

The operators, William Paul Crouse and Carmelo Zanfei, left thousands of trusting people around the US without health coverage in a massive swindle as heartless as it was vast.

Convicted criminally

Crouse and Zanfei finally were convicted criminally this June in Florida, where they left more than 7,200 people with at least $2.8 million unpaid medical bills and stolen premiums.

Like Ginger Harbin, who had a brain tumor and amassed $75,000 in medical bills. Or retiree Richard Baer, who was stuck with $60,000 in unpaid bills for heart bypass surgery.

Or Rusty Baker, a longtime roofer. TRG wouldn’t pay claims for his wife Cindy’s cancer surgery, or for his own skin cancer and back problems after years of hard labor on roof tops. Draining the family savings, their credit ruined and facing upwards of $70,000 in medical bills, Rusty didn’t want to burden the family with any more of his own expenses.

He killed himself in despair.

All told, the Indiana-based TRG foisted its con on 44 states.

Desperate for coverage

The pair exploited small businesses that were desperate for affordable health coverage at a time when premiums were rising in double digits year after year. The come-on was simple and devastatingly effective. Low-low prices, great benefits plus easy signup — even for people with pre-existing conditions.

Crouse and Zanfei hired insurance agents and paid generous commissions to peddle most of the coverage. The agents’ very presence legitimized the so-called coverage in the eyes of victims.

People snatched up the worthless insurance, often canceling perfectly good policies to chase TRG’s empty dream.

TRG avoided nosy state insurance regulators by simply operating without licenses. When anyone asked if the plan was licensed, the agents said federal law exempted TRG from state licenses. In fact, that was false. But few people understood the complex and confusing federal exemption laws, so TRG’s excuse usually worked nicely.

Meanwhile, Crouse and Zanfei took the money, paid themselves large salaries, and lived lavishly in fancy houses.

Agents face suits, trials

Backlash spread swiftly once people realized they’d been conned.

Crouse and Zanfei were busted in state after state, their crooked operations shut down.

Many insurance agents also face possible loss of their licenses, lawsuits by aggrieved victims, fines and potential criminal charges. Did the agents know they were supporting a criminal con? Or did Crouse and Zanfei dupe them just like the trusting policyholders? That’ll come out before long.

And least two TRG victims extracted their own justice. Pete Orr’s widow Terri and retiree Baer constantly appeared in news stories, spreading word of the cons. The Florida legislature was so moved that it passed a law in Pete’s memory. The law made it a felony to run an unlicensed insurance company in the state.

Crouse and Zanfei are scheduled for sentencing in August 2005. They’ll have to repay at least $2.8 million to their victims, plus serve jail terms and probation. How much of the stolen money is left is anybody’s guess.

Which is scant consolation for Cindy Baker after husband Rusty’s suicide.

“They are not going to pay. So many people were affected. I feel that if I have to sell things, I will not be ruined. One woman was left with over $200,000 in medial bills,” she told the Okeechobee News. “It affected me more since my husband took his life. I think my husband would still be here if they would have paid my bills.”

View previous "Fraud Cases of the Month"

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