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Seven Public Employees Arrested in Insurance Fraud Scheme

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KANSAS CITY, Mo. -- Federal prosecutors say that six Kansas City Missouri municipal employees and a Jackson County employee have been arrested in connection to an alleged insurance fraud scheme.

Crystal Burgin-Woods, 42, an employee of the KCMO Municipal Court; Matt Stivers, 41, of the KCMO Information Technologies Department; Kim Blair, 36, and Sylvia Sims, 37, both of the Parks and Recreation Department; Matt Tholen, 29, an emergency medical technician; Michael King, 30, of the Water Department; and Michael Olukotun, 39, a corrections officer for the Jackson County Jail were charged in a 21-count indictment returned by a federal grand jury on Wednesday.

The defendants were each charged with three counts of wire fraud.

According to prosecutors, the defendants engaged in a scheme to defraud their healthcare provider - Blue Cross and Blue Shield of Kansas City - through a benefits program called Points to Blue. Under the program, members would receive points in exchange for engaging in healthy activities, and for every 1,000 points earned members would earn one dollar of credit towards either a gift card or preloaded debit card, up to an annual limit of $250 per member.

More points were awarded for more strenuous activities - for instance, running a marathon or triathlon could earn up to 10,000 points.

Prosecutors say that within the first six months of the program, the accused public workers began falsifying entries on the Points to Blue website in order to obtain the maximum gift card. The defendants would, in addition to making false entries on their own behalf, solicit coworkers to engage in the fraud scheme as well - submitting false activities on the behalf of a coworker or a coworker's dependent in exchange for a portion of the $250 award.

According to the indictment: Burgin-Woods fraudulently received 383 gift cards totaling $185,655. Stiver fraudulently received 248 gift cards totaling $39,070. Blair fraudulently received 238 gift cards totaling $30,485. Tholen fraudulently received 144 gift cards totaling $17,600. Olukotun fraudulently received 71 gift cards totaling $16,480. King fraudulently received 79 gift cards totaling $12,745. Sims fraudulently received 90 gift cards totaling $8,925.

Prosecutors allege that as a result of the fraud scheme, 1,253 fraudulent gift cards were issued, totaling $310,960.

According to prosecutors, Burgin-Woods, Stivers, Blair, Tholen and Olukotun allegedly claimed that young children (often five years old or younger) competed in multiple marathons and triathlons. King allegedly claimed that he participated in three duathlons, three marathons, two half-marathons, an Olympic lifting competition and four triathlons.

In a statement, the City of Kansas City said that they were cooperating fully with the investigation, stressing that no public funds were misappropriated as a part of the alleged fraud.

“We are very saddened with the allegations brought upon a small group of City employees. These alleged actions do not represent the majority of City employees who adhere to the City’s ethical standards,” said City Manager Troy Schulte in a statement.

If convicted, each defendant could face up to 60 years in prison and a $750,000 fine.

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