TRENTON – Acting Attorney General John J. Hoffman announced that a Middlesex County jury found the primary owner and operator of a third-party insurance administrator guilty of stealing approximately half a million dollars from a trust fund that administered health insurance policies and prescription coverage for hundreds of employees and their families.
Catarina Young, 48, of Metuchen, was convicted by a Middlesex County jury yesterday afternoon (Oct. 29) of second-degree theft by unlawful taking and second-degree misapplication of entrusted property or property of a government or financial institution. The conviction followed a five-week trial before Superior Court Judge Dennis Nieves. The charges were contained in a Dec. 15, 2011 Middlesex County grand jury indictment obtained by Deputy Attorney General T.J. Harker.
Deputy Attorney General Harker, lead counsel, and Tom Tresansky, co-counsel, tried the case for the office of the Insurance Fraud Prosecutor. Judge Nieves scheduled sentencing for January 3, 2014. Young faces up to 10 years in prison for each of the second-degree convictions.
"This defendant showed a deliberate disregard for the welfare of those she was obligated to assist and instead left more than 1,000 employees and their families without vital health care coverage," Acting Attorney General Hoffman said. "She now faces an appropriately lengthy prison sentence for her criminal actions."
“This conviction sends a message to all those involved in planned administration that the government will prosecute those who betray their fiduciary obligation by treating the hard-earned wages of hundreds of employees as their personal piggy bank,” Acting Insurance Fraud Prosecutor Ronald Chillemi said. “I commend the trial team, the detectives, and analysts who built and prosecuted this complex white-collar case together with the cooperation and hard work of the United States Department of Labor and the representatives of Horizon Blue Cross Blue Shield of New Jersey and Benecard.”
“Third-party administrators are placed in a position of trust by the workers and employers who rely on them to handle employee benefit contributions,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “This is an excellent example of our commitment to working with state and local agencies to seek justice when this trust is violated.”
At the time the crimes occurred, Young was a partial owner of the now-defunct Elite Benefits Corp. (Elite), which was located in Middlesex County. Elite administered insurance plans on behalf of third-parties, including the Multi-Skilled Employees & Employer Welfare Trust Fund (Fund), an organization consisting of several union employers and hundreds of employees.
By convicting Young, the Middlesex County jury determined that between Nov. 17, 2003 and Dec. 26, 2006, Young, as fiduciary of the Fund, deposited 86 checks and 16 wire transfers totaling $462,341 belonging to the Fund into her personal bank accounts and, subsequently, used these stolen proceeds for her own purposes. The stolen proceeds were supposed to be used to purchase health insurance coverage from Horizon Blue Cross Blue Shield of New Jersey and Benecard. By stealing this money, Young’s actions resulted in the cancellation of a health insurance plan that insured more than 1,000 working people and their families.
Deputy Attorney General Harker and Sergeant Anthony Butler investigated the case. Deputy Attorneys General Harker and Tresansky, together with Detective Taryn Kong, tried this case in Middlesex County. Financial Analyst Kelly Celenza and Sergeant Butler, as well as handwriting expert Detective William Davis and Investigator Sheila Young-Golden (no relation to the defendant), all with the Office of the Attorney General, were among the 27 witnesses who testified at trial. The five week trial also involved more than 100 exhibits that were admitted into evidence and many more that were used as exhibits but not admitted into evidence.
Acting Insurance Fraud Prosecutor Chillemi thanked Criminal Coordinator Angelo Gaglias, Special Agent Ani White, Senior Investigator Michael Briglia, and Senior Investigator Carmela V. Pagano, all with the United States Department of Labor’s Employee Benefits Security Administration, for their assistance in the investigation. Acting Insurance Fraud Prosecutor Chillemi also thanked Investigator Young-Golden, with the Department of Banking and Insurance, for her assistance in the case, as well as the representatives of Horizon Blue Cross Blue Shield and Benecard who assisted in the investigation and who testified at trial. Acting Insurance Fraud Prosecutor Chillemi further thanked the Middlesex County Prosecutor’s Office for the logistical support they provided during the five-week trial.