College Faculty Union Defrauded. Businessman Sentenced to 37 Months in Prison

College Faculty Union Defrauded. Businessman Sentenced to 37 Months in Prison

HARRISBURG – 69 year-old, Michael Timothy Buchanan has been sentenced to over 3 years behind bars for his role in establishing a trust fund by the Association of Pennsylvania State College and University Faculties (APSCUF) out of an incredible $1,493,629. This sentence was followed by three years of supervised release. The decision was announced on February 26, 2020 by the United States Attorney’s Office for the Middle District of Pennsylvania. Buchanan was the former owner and operator of a dental and vision claims processing business located in Fishers, Indiana. The decision made by Sylvia H. Rambo, a Senior U.S. District Court Judge, comes as a welcome to those affected by the scam.

In May of 2019 Buchanan had pleaded guilty to one charge of health care fraud according to United States Attorney David J. Freed. Between 2007 and 2017 Buchanan attempted to defraud the Pennsylvania Faculty Health and Welfare Fund (The Fund) by submitting false and inflated invoices for the services his company would offer. The Fund was supposed to be provided with assets from Buchanan’s company, Actuaries, Consultants and Administrators, Inc. (ACA) which was connected to the processing of dental and vision claims that the APSCUF Union had submitted.

The ACA paid $5.20 to The Fund for vision claims processed along with $8.10 for each dental claim. The claims that were sent to The Fund were often highly inflated by Buchanan and between 2007 and 2017 this ended up with The Fund massively overpaying ACA. The Harrisburg Office of the FBI and the U.S. Department of Labor, Office of Inspector General investigated the case while Assistant United States Attorney Kim Douglas Daniel was the prosecutor.

U.S. Attorney Freed stated that citizens had to deal with ever increasing health care costs and that citizens that were expected to pay were entitled to protection. Freed went on to state that law enforcement would always step in when funds are misappropriated through fraudulent transactions. He was pleased with Judge Rambo’s decision in recognizing the serious nature of the charge. He indicated that the defendant would be liable to pay back the money he had stolen.

Tara A. McMahon, Acting Special Agent in Charge of the FBI’s Philadelphia Division claims that Buchanan was the mastermind behind overbilling the faculty union and added that Buchanan’s company purposefully and continually submitted false claims on a regular basis with the result being more than $1.5 million being misappropriated. McMahon vowed to curb this type of behaviour and bring those responsible to justice.

Derek Pickle, Acting Special Agent-in-Charge of the Philadelphia Region and U.S. Department of Labor Office said in a statement that Buchanan had made a concerted effort to personally deepen his own pockets by stealing over $500,000 in health benefits from union members. Pickle continued to emphasize the protection of labor organizations against criminals that seek to take advantage of them.

No date has yet been set for Buchanan, but with the guilty verdict handed down he is currently waiting for a preparation that is still pending of a pre-sentence report. If Buchanan is found guilty he could face up to 10 years in prison.

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