A federal jury in Greenbelt yesterday convicted a Montgomery Village couple of defrauding employee groups in Texas.
Prosecutors said Maruthi S. Manney, 47, and his wife, Lakshmi, 45, who ran a health benefits plan, failed to pay for the medical care of clients that included school districts and business employees in East Texas. Authorities said their company, Rockville-based SAI Plus, routinely processed claims and printed checks but failed to mail them out.
Prosecutors said Maruthi Manney invested $500,000 from plan funds in another venture, used $12,000 for a holiday party and spent roughly $7,600 on tickets for Washington Redskins games.
"The victims paid for health insurance coverage that Maruthi Manney and Lakshmi Manney never intended to provide," Maryland U.S. Attorney Rod J. Rosenstein said in a statement.
The defendants' attorneys said their clients never sought to defraud clients. They said the company, created in 1998, hit financial trouble a year later and was unable to keep up with its growing client base.
"This was a valid company that paid medical claims and never made any false representations to anyone," said Jane Carol Norman, Lakshmi Manney's attorney. "The company ended up going bankrupt. This was a civil matter that should have never been prosecuted criminally."
Maruthi Manney was convicted of one count of wire fraud and eight counts of mail fraud. Lakshmi Manney was convicted of mail fraud but was acquitted on the wire fraud count.