Florida deserves praise for pressing TRG fraud case

By Daily Journal, bcorbin@thejournalnet.com
Johnson County, Indiana
April 16,2003

When Richard Baer underwent heart-bypass surgery last year, he assumed his health-insurance company, TRG Marketing, would cover his claim. It didn't. He was left with unpaid medical bills of $60,000.

Pete Orr received cancer treatment, again counting upon his insurer, TRG, to honor its policy. It reneged. Orr was stuck with $275,000 in unpaid medical bills and later died.

What these two Florida men and thousands of others have in common is that they were victim of TRG, a Greenwood company. Its CEO, William Paul Crouse Jr., resides in an upscale house in White River Township.

The TRG story is a complicated spider web of shady financial deals, but it basically boils down to this: TRG was a virtual health-insurance company, selling health plans to employers when TRG didn't have the financial wherewithal to pay on all the policies.

After collecting premiums from at least 12,000 people in 42 states in 2000 and 2001, TRG terminated its health coverage in November 2001, under pressure from regulators. An unknown number of claims were unpaid, but they could easily total in the millions of dollars.

TRG was able to get away with this by operating in the gray area between state and federal regulation. The company was based in Indiana, but nearly all its defrauded clients were out of state, meaning Indiana insurance regulators had little basis on which to pursue the company on consumer-protection grounds.

Attempts by the Indiana Department of Insurance and attorney general's office to hold TRG accountable were half-hearted at best. In May, state regulators asked Marion County Circuit Court Judge William Lawrence to halt the company's illegal insurance operations and appoint a conservator to seize documents before they were hidden or destroyed.

But the judge hesitated, failing to rule on the state's request to freeze TRG's assets.

TRG quietly abandoned its Greenwood headquarters, leaving behind an empty office building and the ruined lives of its clients, with barely a peep from state regulators. (Indiana has no criminal penalty for selling unauthorized health insurance.)

Fortunately, insurance regulators in Florida recognized TRG for what it was: an elaborate pyramid scheme. Prosecutors in Florida charged Crouse with felony charges of fraud.

Crouse was arrested Monday at his White River Township home and was jailed on $1 million bond, pending extradition.

Florida regulators should be praised for not letting this case fall through the cracks. Insurance fraud is extremely complicated and difficult to prosecute, and it would have been easy to look the other way.

But officials in the Sunshine State didn't. And now Crouse is facing a maximum of 60 years in prison, along with fines and restitution.

Though it's cold comfort to Richard Baer and the family of Pete Orr, we think that William Crouse deserves harsh punishment from the Florida courts.

If convicted, Crouse should spend many years in prison and be forced to forfeit all his assets to pay restitution to his victims.