American-Amicable Life Insurance Company of Texas Fraud

Tycko & Zavareei LLP was hired to represent whistleblower Keith Sanders in an appeal to the United States Court of Appeals for the Third Circuit from a trial court decision dismissing his qui tam case brought under the False Claims Act. The case alleges that American-Amicable Life Insurance Company of Texas and Central National Bank of Waco, Texas engaged in a scheme to fraudulently induce the United States Government to pay them money that otherwise would have been paid to enlisted military personnel. As alleged in the complaint, this scheme involved falsely marketing high-cost, low-value life insurance policies to service members as “savings accounts.” And as part of that scheme, Defendants submitted documents to the United States that purported to authorize “allotments” of service members’ pay. An allotment is a request to the government to pay to a third-party a sum of money that otherwise would be paid to a service member. These documents falsely identified the purpose of the allotments to be deposits into savings accounts, and failed to disclose that the allotments were actually being used to pay premiums on the American-Amicable life insurance policies. As alleged in the complaint, these false representations were a necessary part of Defendants’ scheme, as they were intended to circumvent regulations that restricted in various ways the use of allotments for payment of life insurance premiums. The issue on the appeal is whether those fraudulent documents were “claims” covered by the False Claims Act. To download a copy of the brief filed by Tycko & Zavareei LLP, click here.