A Louisiana couple has pleaded guilty in a $48 million scheme that targeted a medical reimbursement program, federal prosecutors said on June 21.
The U.S. Justice Department, New Orleans-based U.S. Attorney Peter Strasser and other officials outlined the case in a news release. It said Denis Joachim, 53, pleaded guilty to conspiracy to commit money laundering; Donna Joachim, 52, pleaded guilty to conspiracy to defraud the United States.
The Covington couple’s corporation, The Total Financial Group Inc., pleaded guilty to conspiracy and false statement counts.
Prosecutors said the defendants marketed to employers a phony supplemental benefits plan, marketed as “Classic 105,” to reimburse employees for medical expenses such as insurance deductibles. But prosecutors said the Joachims used much of the money raised for personal expenses. The complex scheme included purportedly tax-exempt payments from employees.
A document filed in federal court says the defendants fraudulently collected more than $25 million. They also caused employers and employees to unwittingly underpay more than $23 million in various taxes — including Social Security, personal federal income taxes, federal unemployment taxes and state unemployment taxes.
“This exposed participants and employers to adverse financial consequences, including not only unpaid taxes, fees, and penalties, but also ineligibility from certain government programs, including unemployment payments, and reduced Social Security payments,” prosecutors said in a “factual basis” filed in federal court.
The guilty pleas took place May 30 but were not made public until Thursday. Sentencing is set for Sept. 5. Denis Joachim faces up to 10 years in prison and Donna Joachim could get up to five years, according to their respective plea agreements.
In the news release, federal authorities say the defendants will forfeit $6 million in assets. They also say the defendants have acknowledged a potential loss to the victims totaling more than $48 million and agreed to repay restitution.
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