Suspect Arrested, Charged With Bank Fraud : Maxicare, FBI Thwart Alleged $7.6-Million Embezzlement Bid

Maxicare Health Plans and the FBI have foiled an attempted embezzlement of nearly $7.6 million in company funds in an unusual tale involving bank fraud in the South Pacific and the chance arrest of a suspect in San Diego, law enforcement and company officials said Tuesday.

The FBI has arrested Jerry Lee Sanders, a 45-year-old Chula Vista man on charges of wire and bank fraud and interstate transfer of stolen property. Sanders, who has remained in jail since his arrest Friday, is scheduled to appear for a bail bond hearing in a federal court in San Diego this morning.

Maxicare is not sure whether any of its employees were involved in the embezzlement, according to company spokeswoman Tobi Nyberg. “Our investigation is continuing,” she said. Sanders was described as self-employed.

Maxicare got virtually all of its money back, but the company publicized the attempted embezzlement anyway to head off rumors about possible losses. By Tuesday afternoon, Maxicare had recovered all but 1% of the funds, according to the firm’s chief financial officer, Samuel Westover.

Los Angeles-based Maxicare is one of the nation’s leading health maintenance organizations. Two acquisitions late last year increased its membership enrollment to more than 2 million.

Maxicare discovered the embezzlement last Thursday during a routine audit and reported the apparent theft to the FBI the next day, Nyberg said.

According to FBI spokesman James Bolenbach, Sanders has been charged with diverting three Maxicare corporate checks during January, February and March and depositing them in two accounts at a Security Pacific Bank branch office in San Diego.

Two of the checks were for about $100,000 each, and the third was for $7.3 million, Bolenbach said. Most of the money was subsequently wired to a bank in the South Pacific island nation of Vanuatu, Bolenbach said.

Checks Somehow Diverted

The checks were “cut at corporate headquarters,” but Maxicare is “still trying to determine” how they ended up in the Security Pacific accounts, according to Nyberg.

The three checks were somehow diverted from a bona fide account at First National Bank of Chicago, according to a complaint filed in the U.S. District Court in San Diego.

Sanders was arrested at 6 p.m. Friday by FBI agents who were at the Security Pacific branch in San Diego at the time trying to determine where the funds had been transferred. “It was nice that (Sanders) happened to show up and that bank (employees) were able to identify him for us,” Bolenbach said.

Sanders was at the bank to cash two checks, one for more than $205,000 and one for $101,000, the FBI spokesman said.

“While (Sanders) was in the bank,” Bolenbach said, “he was identified . . . as being the same person who opened the accounts . . . and the same one they assisted in wire transferring the funds to the bank” in the South Pacific.