KANSAS CITY — Six Kansas City municipal employees and one Jackson County corrections worker are facing federal wire fraud charges, accusing them of using an insurance member benefit program to illegally rack up tens of thousands of dollars in gift cards.
A law enforcement official told The Associated Press on Thursday that a day before, a federal grand jury returned a 21-count indictment charging each defendant with three counts for their roles in a scheme to defraud Blue Cross and Blue Shield of Kansas City out of more than $300,000.
Prosecutors said the seven participated in a benefit program launched in April 2010 that allowed members to accumulate points for healthy activities in which they participated. They received $1 for every 1,000 points earned toward a gift card or preloaded debit card up to $250 annually per member.
"We are very saddened with the allegations brought upon a small group of city employees," Assistant City Manager Pat Klein said. "These alleged actions do not represent the majority of city employees who adhere to the city's ethical standards."
Each dependent in a member's household also could get points and gift cards for healthy activities, with higher point totals assigned to more rigorous exercise, such as long-distance running. The maximum points awarded for a single activity was 10,000 for marathons and triathlons.
One defendant reported a 1-year-old child had run one duathlon, one marathon and one triathlon, according to the indictment, which included a dozen children 7 years old or younger who had accomplished similar feats.
The indictment lists Crystal Burgin-Woods, 42, a Kansas City municipal court employee, as the biggest violator, tallying 383 gift cards worth $185,655. She is accused of reporting that two 3-year-olds and a 4-year-old completed five duathlons, nine marathons, four half-marathons and 11 triathlons combined.
Also named in the indictment are: Matt Stivers, 41, with the Kansas City information technology department; Kim Blair, 36, with the city Parks and Recreation Department; Matt Tholen, 29, of the city fire department; Michael Olukotun, 39, with Jackson County jail corrections; Michael King, 30, with the city water department; and Sylvia Sims, 47, with the Parks and Recreation Department.
None of the defendants had obtained an attorney as of Thursday afternoon, according to the U.S. attorney's office. Phone calls to each defendant were unsuccessful.