An Isle of Palms man has been identified as a key-player in a nation-wide insurance fraud scam.
South Carolina Director of Insurance Scott Richardson issued an emergency cease and desist against Isle of Palms resident William M. Worthy, II, Blythewood attorney and town councilwoman Kathleen D. Cauthen, and several others.
Richardson’s order accuses Worthy of illegally engaging in insurance business in South Carolina by organizing and running a nationwide, multimillion dollar scheme. The scam is stated to involve the sale of so-called “limited benefit” medical insurance through associations. Worthy, operating through a network of corporations and associations and in concert with one or more Pakistani organizations, is accused of selling fake insurance and attempted to buy insurance companies.
Several other states have issued similar cease and desist orders against some or all of those named in the South Carolina order. The fraudulent scheme detailed in Richardson’s order is the same scam recently profiled on the CBS News program The Early Show and involves the same people and entities that prompted the Tennessee attorney general to seize and liquidate two unauthorized insurance businesses in that state last month. The Tennessee businesses were run by longtime associates of Worthy, and they have sued Worthy, claiming that Worthy duped them.
“We will do everything in our power to protect South Carolina citizens against the unauthorized transaction of business insurance like this,” said Richardson. Unfortunately, scams such as this one leave those South Carolinians who can least afford it stuck with unpaid medical bills, which they thought were covered by insurance.”
Worthy has been in disciplinary trouble with the South Carolina Department of Insurance several times. In 2006, the Department revoked his individual insurance producer’s license, finding that he misappropriated premium money from insurance companies and consumers.
At least 269 South Carolinians are now stuck with unpaid medical bills and at least eight other states have taken action to halt the policy sales. The recent state of the economy, rising healthcare costs, and millions of people desperate for coverage has resulted in the perfect storm for health care scams such as this one.