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Post date: July 22 2005

Nurse Convicted Of Fraud And Grand Larceny For Operation Of Illegal Health Plan

Attorney General Spitzer today announced that a licensed registered nurse has been convicted after trial of one felony count of scheme to defraud and five felony counts of grand larceny stemming from her operation of Metro Health Managed Care, Inc. "Metro Health", an unlicensed health insurance plan that was shut down in a civil action brought by the Attorney General.

Blanca Jaravata, 64, of Manhattan, was found guilty after a two-week trial before New York County Supreme Court Justice James Yates. Sentencing is set for September.

Evidence at the trial established that Metro Health, which was advertised as a health maintenance organization (HMO), was never licensed and that Jaravata never obtained a license from the State Department of Insurance or a certificate of authority from the Department of Health to operate the HMO.

The defendant placed advertisements in the Yellow Pages and 35 consumers signed up for coverage. Jaravata told them that Metro Health had a network or doctors and hospitals to provide care and would pay 100% of a member's medical expenses after the member paid premiums, deductibles and co-payments. As a result of low premiums, Metro Health attracted low-income individuals, immigrants, and those who otherwise could not afford health insurance. Some consumers paid up to $400 per month to Jaravata for insurance.

"This criminal conviction brings a fitting an end to years of fraud and deception perpetrated by Jaravata against hardworking New Yorkers who were seeking affordable health insurance that they were not able to get through their employment," said Spitzer. "With legitimate insurance premiums soaring, consumers need to be wary of health plans that offer insurance coverage at a price that seems too good to be true, because it usually is."

The criminal conviction follows a civil case brought by Spitzer in August 2003 that forced the immediate closure of Metro Health and a December 2004 Consent Order and Judgment, which permanently enjoined Jaravata from operating an insurance business without a license, awarded affected consumers almost $70,000 in restitution and assessed $15,000 in penalties and costs against Jaravata.

Spitzer thanked the State Insurance Department for referring the matter to his office and for their assistance in the investigation.

Criminal Prosecution Bureau Assistant Attorney General Ronda Lustman prosecuted the case under the supervision of Bureau Chief Janet Cohen and with the assistance of the State Insurance Department.

The civil case was handled by Sandra Jefferson Grannum, Deputy Bureau Chief of the Attorney General's Health Care Bureau, under the supervision of Bureau Chief Joe Baker.