After deceiving sick and uninsured, CEO headed to prison - WSMV News 4

After deceiving sick and uninsured, CEO headed to prison

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Tim Thomas, former CEO of United Benefits of America. (WSMV) Tim Thomas, former CEO of United Benefits of America. (WSMV)
NASHVILLE, TN (WSMV) -

Nine years after the News4 I-Team first exposed how his company was deceiving the sick and uninsured, the CEO of United Benefits of America will spend five and half years in prison and pay $2.5 million in penalties.

In court, Timothy Thomas, 55, apologized to his customers and to his ex-wife Keenan Dozier Thomas, who was sentenced last week for defying a court order in the case.

The prison term and hefty fine end what was once a lavish lifestyle, created in part by selling what was purported to be health insurance but in reality was nearly-worthless discount cards.

Thomas once lived in a large house in the prestigious Governor’s Club neighborhood, owned a yacht and partied around the world, all while the prosecutor said he was making substantial money off his company.

In 2009, the News4 I-Team sent in our hidden camera into the company, exposing how the employees were being taught to lie to customers, many of whom were uninsured and had serious illnesses, into buying what they thought was health insurance.

At his sentencing, prosecutors said Thomas had direct knowledge of how customers were being deceived and encouraged his staff to go make him money.

In court, with Thomas watching, prosecutors showed one of the I-Team first investigations, where former employees spoke of their guilt.

Those employees then turned to the News4 I-Team to help expose it.

“It's often the case that members of the public become aware of a crime, and the first people that they turn to are investigative reporters,” said Cecil VanDevender, Assistant U.S. Attorney.

Thomas will report to prison in three months due to treatment for rectal cancer.

The judge noted that unlike his victims, Thomas has full-coverage insurance.

Thomas was also ordered to forfeit $1.5 million dollars and to pay more than $2.5 million in restitution to the victims of the fraud scheme.

In March 2018, Timothy Thomas pleaded guilty to committing mail fraud.  He was initially indicted in October 2014 for fraudulently marketing limited benefit health plans as major medical health insurance to consumers. Thomas also pleaded guilty to criminal contempt, charges that resulted from a lawsuit filed by the Federal Trade Commission (FTC) and the State of Tennessee in August 2010, wherein a federal judge in the Middle District of Tennessee issued an order freezing Thomas’s assets and placing his company into receivership. Immediately after being informed of the court’s order, Thomas violated it by withdrawing more than $100,000 from a brokerage account and convincing a friend to deposit checks totaling $528,647, constituting proceeds of the scheme, into the friend’s bank account.

Thomas’s 66-month sentence consists of 36 months for mail fraud, to be followed by 30 months for criminal contempt.

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