- The Washington Times - Thursday, August 17, 2006

Federal authorities have arrested a legal aide at CareFirst BlueCross BlueShield Inc. in connection with a phony billing scheme to funnel money through a company he set up.

Neville Reid, a legal staff coordinator for the nonprofit insurance company, funneled money from CareFirst through a shell company he organized called IncSpot LLC, according to the U.S. attorney’s office in Baltimore.

Mr. Reid, of Olney, was arrested last week and charged with wire fraud. He has pleaded not guilty.

A hearing on the case has been scheduled for next month. Mr. Reid remains free on his own recognizance but was ordered to surrender his passport.

Neither Mr. Reid nor his attorney could be reached for comment yesterday.

Charging documents said Mr. Reid’s job as legal staff coordinator required him to oversee billing from outside vendors who file corporate paperwork with state authorities on behalf of CareFirst.

From 2001 to 2003, Mr. Reid set up IncSpot LLC and sent phony invoices to CareFirst, authorities say.

He told supervisors that IncSpot filed corporate documents for CareFirst in Virginia at all county clerk offices and at the Virginia State Corporation Commission in Richmond, prosecutors say.

The scheme resulted in CareFirst issuing at least seven checks to IncSpot for services that were never performed, with the money ending up with Mr. Reid, authorities said.

A person familiar with the investigation said the scheme resulted in a loss of about $48,000 by CareFirst.

Authorities say that Mr. Reid deposited CareFirst checks to IncSpot in a bank account he controlled.

“Reid thereafter used the proceeds of said checks for his personal benefit,” the indictment states.

The first check was issued July 24, 2002, and the last Feb. 25, 2003.

CareFirst officials did not return calls seeking comment yesterday, but court records show that Mr. Reid is no longer employed by the insurance company.

Maryland incorporation papers show that IncSpot is based in Olney and that Mr. Reid is a corporate official in the business. The company’s corporate charter has been revoked for failure to pay regular dues.

A conviction on wire fraud carries a sentence of up to 20 years in prison.

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