A Michigan claims administrator who defrauded a medical malpractice (medmal) captive insurance company of over $3.6m has been sentenced to 57 months’ imprisonment.

John P. Bender, principal and owner of JP Bender & Associates, was ordered by Senior US District Judge Julian Abele Cook to report to federal prison to begin serving his sentence on 20 July 2009, according to a US Department of Justice statement.

In addition to his 57 month prison term, Bender will serve 2 years of supervised release and will be required to pay restitution of $3,619,765.

Terrence Berg, United States Attorney, Eastern District of Michigan said: “Falsifying millions of dollars of claims to a malpractice insurer harms not only the insurance company, but also the entire health care delivery system and consumer, which suffer from higher costs as a result. Such fraud deserves the kind of serious jail time – almost 5 years – that the Court imposed.”

JP Bender is a third party administrator that managed malpractice claims for medmal captive insurer Medilink. Bender used his position as a claims administrator for the company to defraud Medilink over a period of 27 months, submitting false malpractice claims.

Once a covered malpractice claim was resolved or settled, JP Bender was authorised to request a transfer of funds from Medilink accounts into a JP Bender account and JP Bender would then pay the claim.

From May 2005, until August 2007, Bender caused the TPA company to submit a total of over $3.6m in fraudulent payment requests to Medilink and related companies.

Once the funds were deposited into a JP Bender account, Bender would cause the funds to be further transferred to other accounts he controlled, and would spend the funds as his own, the Department of Justice statement said.

The US Attorney’s Office has also obtained a judgment forfeiting a large quantity of antique collectible dolls and doll accessories, valued at several hundred thousand dollars, that had been obtained by Bender using the proceeds of his fraud.