Federal Grand Jury Indicts Father and Son in $16 Million Dollar Hearing Aid Insurance Fraud Scheme

April 21, 2017

DALLAS, TEXAS — A federal grand jury indicted a Texas father and son this week in what is being alleged as a $16.7 million dollar insurance scam targeting American Airlines workers. Licensed hearing aid dispensers, Terry Anderson, 66, and Rocky Anderson, 36, were each charged on 15 federal counts by the U.S. attorney for the Northern District of Texas.

American Airlines workers were targeted due to generous insurance benefits.

According to the indictment, from 2011 to 2016, the pair devised and executed a scheme at their business — Anderson Optical and Hearing Aid Center — by sending Blue Cross Blue Shield submissions fraudulent claims for hearing aids on behalf of American Airlines’ employees.

The claims were allegedly submitted despite the fact that workers didn’t actually need hearing aids, and sometimes never even received them.


Hearing Aid Fraud Scheme


According to the report, the business offered a free pair of sunglasses or prescription eyeglasses in exchange for taking a free hearing test. At the end of the test, patients were told they had slight to mild hearing loss and were required to sign an order for hearing aids in order to receive their free glasses.

The patients were told the hearing aids would be provided at no cost through their insurance.


The indictment claims the hearing tests failed to meet Blue Cross Blue Shield’s medical standards and noted that many of the tests were actually conducted in an employee break room at DFW International Airport, taking less than five minutes.


Further allegations claim that patients were told even though they did not have hearing loss, they most likely will develop it in the future and therefore, they should order hearing aids while they still had generous insurance benefits through American Airlines.


Company Fraudulently Submitted $27 Million in Claims


The grand jury indictment estimates the total amount of hearing aid claims submitted on behalf of American Airlines employees at $27 million, with aprpoximately $16.7 million being sent to the Anderson’s business.


“The defendants took advantage of BCBS plans offered to employees of American Airlines because prior to 2014, the American Airlines insurance plans administered by BCBS had no maximum limit on the cost of hearing aids and allowed subscribers to obtain hearing aids once per plan year. In 2013, approximately 84.6% of Anderson Optical & Hearing’s total income came from BCBS and 99.7% of the BCBS payments were based on claims submitted for American Airlines employees and their dependents.”  

U.S. Attorney’s Office, Northern District of Texas


It further alleges that the Andersons falsified patient records, forged patient signatures and attempted to collect deductibles and co-insurances for the hearing aids from patients years after conducting the hearing test and promising free hearing aids.

If convicted, the pair will have to forfeit a 300 acre ranch in Bosque County, three vehicles and more than $3.1 million dollars that was seized in December 2015.

The case is currently being investigated by the FBI and Assistant US Attorney Doug Brasher is prosecuting the case.

Each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The aggravated identity theft counts carry a mandatory statutory penalty of two years in federal prison and a $250,000 fine.


Source: Justice Dept


Leave a Reply