McALLEN – Homer Cedillo Jr., a former Hidalgo County District Court probation officer, along with his mother, two aunts and three cousins, have been convicted for defrauding the American Family Life Assurance Company (Aflac), U.S. Attorney Kenneth Magidson announced Monday.
A total of 36 persons were charged with conspiracy and wire fraud in mid-June 2011 in connection with a multi-million dollar scheme to defraud Aflac involving the filing of thousands of false injury claims under Aflac's Accident-Only Supplemental Insurance Plan.
At a hearing before Chief U.S. District Judge Ricardo Hinojosa, Cedillo, 42, of Edinburg, pleaded guilty. The six others who alos pleaded guilty today were Mary Cedillo, 65, of Edinburg, and Martha Ortega, 58, Yolanda Segovia, 55, Candida Chavez, 35, Lori Chavez, 29, and Anissa Chavez, 31, all of McAllen. As a result of today's guilty pleas, 35 of the 36 defendants charged in this case have been convicted of wire fraud.
According to information presented at today's hearing, the above-named defendants were policyholders under Aflac's Accident-Only Supplemental Insurance Plan at various times from 2005 through 2010. During that time period, they would routinely deliver lists of fake accidents and injuries to two licensed physicians who worked at a clinic together in Reynosa, Tamaulipas, Mexico. After receiving the lists, the physicians prepared an "accident report" for each fake injury in exchange for a cash kickback of approximately $15 per accident report.
In each report, the physicians falsely claimed they had provided treatment and prescribed medicine to the defendants for their purported injuries. Over time, the above-named defendants and their co-conspirators faxed a total of approximately 21,000 false injury claims, each accompanied by a false accident report prepared by the physicians, to Aflac's claims department in Columbus, Ga., causing Aflac to disburse in excess of $3 million in insurance proceeds.
Chief Judge Hinojosa has scheduled sentencing for Tuesday, Feb. 21, 2012, at which time they will face up to 20 years in federal prison without parole and a $250,000 fine.
The investigation leading to the charges was conducted by FBI with valuable assistance from Aflac's Special Investigations Unit in Columbus, Ga. Assistant United States Attorney Greg Saikin is prosecuting the case.