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N.a.p.t. Chief Officer Pleads Guilty to Fraud


Immediate Final Order

TALLAHASSEE - The chief organizer of a Pennsylvania organization that sold bogus health insurance to thousands of Floridians has pleaded guilty to two felony counts of communications fraud, Florida Treasurer and Insurance Commissioner Tom Gallagher and Statewide Prosecutor Melanie Ann Hines announced today.

N.A.P.T. Chief Executive Officer David Andrew Weinstein, 43, of Cherry Hill, N.J., was adjudicated guilty today by Broward County Circuit Court Judge Peter Weinstein (no relation) and sentenced to three years probation, during which he must pay $600,000 in restitution as well as the costs of the prosecution and investigation. Now a convicted felon, Weinstein is banned for life from selling insurance and is prohibited from participating in any banking and insurance industry activities in Florida.

Weinstein was charged with stimulating sales of N.A.P.T. plans by telling insurance agents that Blue Cross Blue Shield of Pennsylvania was a stop-loss coverage provider. However, Blue Cross Blue Shield did not provide stop-loss coverage, but did cover three N.A.P.T. employees, including Weinstein, through a group policy. When N.A.P.T. policyholders' claims became too expensive, Weinstein would submit applications to Blue Cross Blue Shield as if the policyholders were N.A.P.T. employees.

"This sentence sends a strong message to organizers of fraudulent insurance operations who may be thinking about setting up shop in Florida," Gallagher said. "Florida will not tolerate individuals or companies who take advantage of our citizens."

Gallagher shut down N.A.P.T. in an administrative action in March 2001 for operating without an insurance license.

N.A.P.T. sold insurance policies under numerous names including the National Association of Professionals & Technicians, the National Association of Professional Truckers, and the National Association of Professional Traders. None of the affiliated associations or Weinstein has ever been licensed as an insurer in Florida.

Department of Insurance regulators became aware of N.A.P.T. through consumer complaints of cancellations for no reason and without proper notice, as well as slow, and sometimes no, payment of claims.

N.A.P.T. marketed itself to insurance agents and consumers as a qualified Employer Retirement Income Security Act (ERISA) plan, which under federal law may be exempt from state regulation. However, any plan that sells insurance policies to more than one employer does not meet the federal exemption requirement and must be licensed and regulated by the state. An ERISA plan allows an individual employer to establish a self-insured health plan for its own employees.

Moreover, unlicensed entities do not participate in a state guaranty fund, which covers unpaid claims in the event a licensed insurer goes bankrupt. In addition to potentially being left with unpaid claims, many employers and individuals who have purchased unlicensed health coverage may have difficulty securing new coverage because of pre-existing conditions and the subsequent lapse in continuous coverage.

N.A.P.T., now defunct, is in receivership in Florida, a process that will address unpaid consumer claims. Weinstein has been ordered to pay $600,000 in restitution, which will be directed to payment of nearly 1,600 unpaid claims. "We will also continue to actively pursue other players involved in the N.A.P.T. scam for restitution to take care of unresolved claims," Gallagher added.

Gallagher has taken administrative action against six unlicensed entities since February 2001. In addition, the Legislature this year increased the penalty for a licensed agent selling unauthorized insurance from a first-degree misdemeanor to a third-degree felony, punishable by up to five years in jail. HB 1841 was signed into law on April 29 and will go into effect on October 1, 2002. Under the new law, convicted agents also face revocation of their license. If an unlicensed entity fails to pay claims, agents who sold the unlicensed coverage may be held responsible for unpaid claims.

In May of this year, the department launched a media campaign warning employers and individuals to beware of buying insurance from unlicensed entities. The campaign's theme is "Verify Before You Buy." Employers and individuals shopping for health insurance coverage are urged to check with the department to be sure they are dealing with a Florida-licensed insurance company and a Florida-licensed insurance agent.

Visit and click on "News Releases" to view a copy of the department's immediate final order banning Weinstein from the insurance industry.