Comment
0
Tweet
0
Print
RSS Feeds

Trial set in Va. for former Texas insurance exec

Tuesday - 4/30/2013, 6:40pm  ET

ABINGDON, Va. (AP) -- The former owner of a Texas company that provided health insurance to Virginia Tech students has pleaded not guilty to racketeering, conspiracy, money laundering and fraud charges.

Records show 73-year-old John Paul Gutschlag Sr. entered his plea Tuesday in federal court in Abingdon. 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 Frisco, Texas-based 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. The indictment says that by overstating claims, GM was able to charge higher premiums and discourage competitors from bidding to provide the service.


Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.