CareFirst BlueCross BlueShield has filed a federal racketeering lawsuit against a Maryland insurance broker and his brother, alleging the pair fraudulently enrolled overseas clients in health plans meant for Maryland residents as part of a yearslong scheme that cost the insurer more than $51 million.
The complaint, filed June 15 in the U.S. District Court for the District of Maryland, names Avraham Rappaport, a former licensed insurance broker, and his brother Eliezer Rappaport, a financial advisor and former licensed broker. It also names 20 unidentified co-conspirators. In the filing, CareFirst described itself as “the victim of a health insurance fraud conspiracy of breathtaking scale and audacity.”
According to the complaint, the brothers submitted plan applications that falsely listed out-of-state and international clients as Maryland residents so those clients could obtain CareFirst policies but obtain nationwide coverage.
“Utilizing fraudulent identities, fake residences, an international network of referrals, and the assistance of individuals and numerous entities, the Rappaports coordinated an international insurance-fraud machine,” the complaint said.
CareFirst said it identified at least 259 members who did not qualify for the plans they were sold, and nearly 20,000 paid claims tied to them that totaled more than $51 million. The brothers sold nearly 1,000 policies over a six-year period and earned hundreds of thousands of dollars in commissions, according to the complaint.
CareFirst alleges the conduct ran from 2017 through 2023, but that it didn’t discover the scheme until late 2022. The company was also not aware of the full scale until Maryland insurance regulators published a consent order involving Avraham Rappaport. The complaint said that his brokerage license has been revoked and that Eliezer Rappaport’s license has been suspended, largely because of the alleged scheme.
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