CFO Alex Sink Announces Arrest of Owner of Suncoast Physicians Health Plan, Inc.
CONTACT: Jerri Franz or Jennifer Hirst, 850-413-2842
- Providing Fraudulent Documentation to State Sends South Florida Man to Jail –
TALLAHASSEE—Florida CFO Alex Sink today announced the arrest of Kenneth Feldman, 62, founder of Suncoast Physicians Health Plan, Inc., on one first-degree felony charge for filing false financial statements with the Office of Insurance Regulation (OIR). As a result of the various transactions, over $600,000 listed as available cash or other liquid assets in the company’s financial statements were, in fact, unavailable. Feldman was arrested in Tallahassee and booked into the Leon County Jail; if convicted, he faces up to 30 years behind bars.
“When insurance companies become insolvent, their policyholders are at extreme risk of not having their claims paid,” said CFO Sink.
“I commend the work of my Divisions of Insurance Fraud and Rehabilitation and Liquidation, as well as the Office of Insurance Regulation, and I hope this arrest serves as an example to all that we will not tolerate acts of insurance fraud in this state.”
The Divisions of Insurance Fraud (DIF) and Rehabilitation and Liquidation (DRL), along with assistance from the Florida Office of Insurance Regulation (OIR) partnered to secure Feldman's arrest after he allegedly provided false information to OIR about the company’s financial condition by shuffling money between his different companies to create the appearance of a cash infusion in Suncoast. The arrest occurred after the Division of Insurance Fraud’s Major Case Squad determined Feldman perpetrated the scam in an effort to keep his company from going into receivership.
In April 2007 an OIR financial specialist discovered the company had insufficient funds in its reserve as required by Florida law. One week later Feldman was notified that the company was required to deposit funds into its accounts in order to comply with the minimum amounts required by statute and avoid a receivership. In response to OIR’s demand, in May 2007 Feldman directed a “circular transaction” of funds - taking approximately $225,000 directly from Suncoast Physicians’ account(s), he funneled the money through the bank accounts of two other companies under his control, then had the same $225,000 amount redeposited into Suncoast Physicians’ accounts.
Suncoast Physicians Health Plan went into receivership for purposes of liquidation in August 2007. The Florida Department of Financial Services (DFS) was appointed as Receiver of the company, thereby giving DFS full access to the company’s records. The discrepancies in the previously filed company paperwork were discovered when the company went into receivership. DIF’s Major Case Squad investigators followed the money trail which revealed the May 2007 transactions and also revealed that Feldman had performed the same “circular transaction” with regard to funds in March and April of 2007.
Feldman is currently being held at the Leon County Jail awaiting bond.
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