Watch CBS News

Health Care Plan Founder Accused Of Fraud


DENVER (CBS4)- Thousands of Coloradans are stuck with huge medical bills after a local health care founder is accused of fraud. Gerald "Gerry" Rising, 59, the owner of Rural Health Plans Initiative Administration Company, is accused of embezzling tens of thousands of dollars from his company.

Rising appeared in Federal Court in Denver Wednesday afternoon. He faces 20 counts, including mail fraud, embezzlement and 18 counts of money laundering.

A Federal Grand Jury indicted him after accusations that 4,000 customers, both in Colorado and two other states, have been hit by the fraud masterminded by Rising.

Some of those have unpaid medical bills of more than $40,000. Rural Health Plans Initiative not only failed to pay most of the claims, but also went bankrupt.

As a self-funded trust, RHPI was not regulated by the state division of insurance.

Nancy Warmin, a former cancer patient, is one of those suffering in the wake of the fraud. She was diagnosed with lymphoma in September 2008 and started to undergo treatment.

"I thought beating cancer was the hardest thing I'd have to do. But it's not," said Warmin. "When you've planned out your lift and are looking at retirement and you may not be able to do it, it's a difficult thing."

Warmin works for Best Care, a home health care company in Englewood. She had been paying a $400 monthly premium for insurance.

She had no idea there were any problems until Sept. 2010 when she received a certified letter stating that none of her bills had been paid.

"The hospital bill and three scans had not been paid. Over $40,000," said Warmin.

Her repeated attempts to contact the company went unanswered.

"Wouldn't get through. Would leave voice mails and messages," said Warmin.

Barbara Brom is another one of those hit by the alleged fraud. Her employer arranged for insurance through RHPI. When Brom broke her elbow, she thought her bills would be covered.

"It was a constant battle daily to get them to pay even the smallest bill. Even to an urgent care," said Brom.

Rising has no previous criminal history. He posted $2 million bond and surrendered his passport. Rising has been banned from traveling out of Colorado. His next court appearance is scheduled for April 20.

Additional Resources
Do Research Before Investing In Health Care Plan

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.