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Former CNA underwriter gets four years for fraud

Posted On: Oct. 23, 2019 12:44 PM CST

Prison sentence

Former CNA Financial Corp. health care liability underwriter David Ballard was sentenced to four years and two months in prison on Tuesday for defrauding health care organizations of $16.1 million in premiums paid for deductible insurance.

Mr. Ballard, who pleaded guilty to the charges last year, could have been subject to an eight-year prison term under the plea agreement.

A Chicago-based vice president of a CNA underwriting group, Mr. Ballard will report to begin his sentence in mid-December, said his attorney, Terence H. Campbell of Cotsirilos, Tighe, Streicker, Poulos & Campbell LLP in Chicago.

Mr. Ballard was originally charged with defrauding an unnamed hospital of $13.5 million by using phony binders and policies to divert premiums to a shell company he controlled and then used the money “to purchase real estate for himself and his family and to pay for his personal expenses, including credit card bills, expensive dinners, and trips,” court papers say.

The policies, which were designed to cover deductibles if a policyholder became insolvent, never experienced a claim, allowing the fraud to go undiscovered for more than a decade.

During the investigation, Mr. Ballard confessed to other schemes involving other health care companies, taking the total he agreed to pay in restitution to $16.1 million.

A CNA spokesman did not immediately return calls seeking comment.