Ex-owner of Frisco Insurance Firm Pleads Not Guilty
The former owner of a Frisco-based company that provided health insurance to Virginia Tech students has pleaded not guilty to racketeering, conspiracy, money laundering, and fraud charges, according to the Associated Press.
John Paul Gutschlag Sr., 73, entered his plea in federal court in Abingdon, Va., this week. A jury trial was set to start Sept. 23. Gutschlag was released on $10,000 unsecured bond.
A 57-count federal indictment accuses Gutschlag and GM-Southwest Inc. of overstating claims by more than $9 million to boost profits.The company is a third-party administrator of student health insurance. Major insurance carriers provide coverage but pay GMS a fee for collecting premiums and paying claims. According to the indictment, GM was able to charge higher premiums and discourage competitors from bidding to provide the service by overstating claims.