AG Horne: Large Medical Insurance Fraud Nets Prison Time

PHOENIX (Monday, August 27, 2012) -- A Phoenix woman who defrauded Cigna Health and Life Insurance of nearly $700,000 in phony chiropractic treatments has been sentenced to prison time and probation, Attorney General Tom Horne announced today. 

Esther Obrzut, 42, of Phoenix, Arizona, was sentenced by Judge Dawn Bergin to 2.5 years in prison for Forgery, a class 4 felony; followed by 5 years probation for Fraudulent Schemes and Artifices, a class 2 felony; and ordered to pay $653,108.01 in restitution to Cigna. 

Between May 1, 2003 and February 2011, Obrzut billed Cigna for $1,152,779.00 for 4,490 chiropractic treatments for herself, her spouse and her two minor children. Investigation by the Arizona Department of Insurance determined that of the $1 million billed to Cigna, $684,545.01 was paid out for treatments never received by Defendant or her family. 

“Medical insurance fraud is a significant crime because it drains resources that insurers need to make sure that people who are truly sick get the treatment they need,” Horne noted. “My office is committed to vigorous prosecution of fraud and I am very pleased to see that the perpetrator in this case will not only pay restitution, but will spend time behind bars.” 

Between May 1, 2003 and April 1, 2011, Obrzut was the medical insurance biller for chiropractor Dr. Ramsey Gordon and Power Up Family Chiropractic. She fraudulently submitted insurance claims to Cigna Health and Life Insurance for chiropractic treatments that were never performed on her, her husband or her two minor sons. She submitted billings for 2,944 treatment dates between May 3, 2002 and April 2008 listing Dr. Gordon as the treating physician. Dr. Gordon had no knowledge of these billings and the checks totaling $484,386.00 were sent to the Obrzut’s home address. At the time these false billings were submitted, Obrzut was an employee for Dr. Gordon. 

After leaving Dr. Gordon’s employ in April 2008, Obrzut partnered with chiropractor Lora Contreras to open Power Up Chiropractic. Obrzut was the office manager and Dr. Contreras treated the patients. Between April 2008 and February 2011, Obrzut submitted claims to Cigna for 1,546 treatment dates listing Dr. Contreras as the treating physician. Cigna paid a total of $668,393.00 for these billings. Dr. Contreras was not aware that Obrzut was submitting these false bills. 

Obrzut’s family received some chiropractic treatments from Dr. Gordon and Dr. Contreras. However, of the $1,152,779.00 billed Cigna determined that $684,545.01 was paid out for treatments never received by Obrzut or her family. 

This matter was handled by Assistant Attorney General Beverly Rudnick. This case was investigated by the Arizona Department of Insurance Fraud Unit, with the assistance of the Attorney General’s Financial Remedies Section, the National Insurance Crime Bureau, and the Phoenix Police Department.