Texas student insurance firm indicted in Va.

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Associated Press

Posted on April 9, 2013 at 3:31 PM

Updated Tuesday, Apr 9 at 3:33 PM

RICHMOND, Va. (AP) — An indictment says a Texas company that provided health insurance to Virginia Tech students fraudulently overstated claims by more than $9 million to boost its profits.

The grand jury indictment unsealed Tuesday in U.S. District Court in Abingdon, Va., charges GM-Southwest Inc. and its former owner, 73-year-old John Paul Gutschlag Sr., with racketeering, conspiracy, money laundering and fraud.

The indictment says that by overstating claims, the company was able to charge higher premiums to Virginia Tech and its students and discourage competitors from bidding to provide the service.

Company officials did not immediately return a telephone message, and no phone listing could be found for Gutschlag in Frisco, Texas, where the company is based. Court documents do not list an attorney for the defendants.

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