Scammers prowl churches and clubs, looking for victims
Most of us know that wolves don sheepskins to infiltrate the herd, but too often we don’t spot the fangs until it’s too late.
There are two steps to a successful scam. First, establish yourself as an insider with a group of people who trust each other. Second, offer an insider deal that is too good to pass up, yet is still plausible.
When such a scam crosses the line into criminal behavior, investigators call it affinity fraud. The scammer uses their insider status to cloak their true nature and dupe others. But often a scam is not illegal; it resides in a legal gray area that allows business people to make a killing while staying out of prison.
This is the fine line walked by Aliera Healthcare, according to investigative reporting by my colleague Jenny Deam. Aliera exploits a lightly regulated corner of health care financing, making it a wolf lurking among us. Texas and Washington have taken action against Aliera, alleging de
ceptive business practices and at least two others have warned consumers about the company.
Washington recently ordered Aliera to stop doing business in the state.
Aliera, which denies any wrongdoing, offers what it calls “insurance alternatives,” including an “affiliated health care cost-sharing ministry,” which promises to pay medical bills by pooling contributions from people with shared beliefs.
Deam revealed how Aliera, through a churchaffiliated nonprofit, has generated widespread customer complaints. The company denies it has done anything illegal, and maybe it hasn’t, despite the financial toll on its customers.
As is often the case, the path to perdition begins with good intentions.
Church groups set up health care ministries and collect payments to provide help in paying medical bills. Typically, they help members of a congregation, or members of a specified religious group, who do not have insurance. These programs, though, are not legally insurance and not regulated as such.
These ministries have grown as people become more desperate for affordable health coverage. Religious groups have recruited companies to administer their programs for a fee. The best part for the company, such as Aliera, is that religious sponsorship means the normal rules do not apply.
Aliera teamed up with a group of Mennonites to expand their health-share ministry. But it didn’t take long for that partnership to fall apart. Aliera’s has a new health-share ministry called Trinity HealthShare.
The Affordable Care Act caps profits from health insurance at 20 percent of premiums. Aliera is accused of pocketing 80 percent as profits, according to Texas investigators. Standard insurance pays brokers a 5 percent commission. Aliera pays up to 30 percent, according to Texas insurance officials.
Guess who loses? The patients left holding unpaid medical bills they thought were covered.
The Texas Department of Insurance doesn’t like what they have seen, and investigators asked a judge to shut Aliera down. But Aliera has a compelling defense: religious freedom.
Since the health-share is a ministry, Aliera’s attorneys argue the government must make a case for regulating it. Aliera says the company made it clear that they were not providing insurance, and therefore, as long as they stick to the highly exploitative contract — Aliera is under no legal obligation to pay claims — they’re good to go.
The founders of Aliera know the dangers of crossing the line into crime. A federal judge convicted former executive director Timothy Moses in 2005 on two counts of fraud and one count of perjury in a financial scam. After 78 months in prison and on probation, he and his wife founded Aliera.
The unscrupulous have long cloaked themselves in religion. Burial and funeral insurance are two of the biggest rip-offs sold after Sunday services.
Country clubs are also a popular place for scammers to hang out and pitch early-bird investments in start-up companies, or perhaps a chance to buy an interest in an oil well.
Even public service clubs have a fair share of con artists looking for someone who might want in on a once-in-a-lifetime opportunity to provide for his or her grandchildren.
All of these places lend themselves to scammers because the institutions are looking for new members, and membership conveys an accreditation of the person’s character.
Another common denominator is that people who go to the church, country club or service club tend to be older and wealthier, which is precisely who the scammers are seeking. Don’t let an affiliation allow a scammer to dupe you out of your money. Attending the same church or club does not automatically make someone trustworthy.