Texas Man Pleads Guilty for His Role as Executive National Marketing Director in Operating Sham Medical Reimbursement Account Program | USAO-EDLA

NEW ORLEANS – U.S. Attorney Duane A. Evans announced that JOSEPH ANTHONY BORINO, 64, a resident of Spring Hill, Texas, pleaded guilty to United States District Judge Wendy B. Vitter on July 8, 2021 has Replaced Bill of Information accusing him of failing to commit a crime, money transfer fraud, in violation of 18 USC § 4.

According to court documents, Total Financial Group (TTFG) was a Louisiana company founded by Denis and Donna Joachim with the Louisiana Secretary of State on or about January 6, 2005. TTFG was last at 406 N. Florida Street, Covington, Louisiana. TTFG had at least 13 employees and 56 independent sales representatives. BORINO, who has been with TTFG since 2012, was National Executive Marketing Director for TTFG. In this function, BORINO supervised, trained and trained the regional sales staff of TTFG. BORINO primarily took care of problems that agents, potential customers and registered customers encountered.

TTFG and its owners, together with BORINO and others, created and marketed a program for medical reimbursement accounts called “Classic 105”. Classic 105 claimed to be an overtime welfare scheme marketed to employers as a benefit plan for their employees to reimburse them for medical expenses such as co-payments and deductibles. All Classic 105 participants had to take out basic insurance that was not linked to Classic 105. Classic 105 claimed to consist of several components: a tax-free contribution of between $ 1,000 and $ 1,600 per month from an employee (which reduced the employee’s taxable income), a loan from a lender to the employee to pay the contribution, one to the Insurance policy to be paid to the lender in the event of the death of the employee to repay the loan as well as fees paid directly by the employee and employer paid to TTFG. TTFG informed potential employer customers that the participants would never have to pay any personal contributions to repay the loan and that most participants would receive an increase in their net income due to the tax savings. TTFG’s marketing program informed potential employers that the contributions for each employee participant will be saved in a separate account and that all funds that are not used by the end of each calendar year will flow back to TTFG. The TTFG also charged employees a fee of between $ 150 and $ 250 per month and the employer a fee of five percent of each employee’s contribution amount. At peak times, nationwide over 350 employer customers and 4,400 employee participants were enrolled in the TTFG Classic 105 program.

According to court records, TTFG committed wire transfer fraud because of the way Classic 105 was actually operated. TTFG never received a single credit or insurance policy for the Classic 105 program and participants never actually made any contributions. The only funds transferred to TTFG by employer customers and employee participants were fees. As a result, employee participants and employer customers have been defrauded through fraudulent pretenses, representations and promises to enroll and pay fees for the Classic 105 program. In addition, participants and employers were exposed to potential negative financial consequences, including not only unpaid taxes, fees and penalties, but also exclusion from certain government programs, including unemployment benefits and reduced social security payments.

Although BORINO was aware of these incidents on several occasions, which constituted a transfer fraud, it did not disclose the information and tried to hide it. In September 2014, for example, BORINO was informed that “TTFG has not done any business with banks in any country” and also “neither requested nor” [sic] received a pooling of funds from a group of individuals. ”In the months that followed, when subordinates asked BORINO specific questions about the credit component and raised concerns that Classic 105 was“ a fraud and likely illegal tax fraud, ”BORINO did not reveal what he was told: loan. In the years that followed, BORINO continued to advocate to subordinate and potential customers that loans from “Wall Street banks”, community banks and various “investment vehicles” financed the loan component.

BORINO faces a maximum prison sentence of three (3) years, a fine of $ 250,000, a year of supervised release, a mandatory special assessment fee of $ 100, and he is on restitution for his conduct. The conviction is scheduled before Judge Vitter for November 9, 2021.

US Attorney Evans praised the work of the US Department of Labor – Office of Inspector General and Employment Benefits Security Administration, the Federal Bureau of Investigation, and the IRS-Criminal Investigations in investigating the matter. Prosecutors Jordan Ginsberg, Maria Carboni and Andre Lagarde are responsible for the indictment.