SAG Health Plan Targets Reel Fraud

After three decades and only brief brushes with film fame, actor Norbert Meisel needed a few more minutes on celluloid to qualify for Screen Actors Guild health-care benefits.

So Meisel said he appeared in some promotional shorts produced by a friend in Studio City, projects titled “Going Hollywood,” “All of My Funerals,” “Evil Spirits” and “Naked Forces.”

Those acting roles qualified Meisel, now 71, for insurance. The Screen Actors Guild-Producers Pension & Health Plans paid $26,081 for his medical costs.

But there was a problem. Meisel never appeared in “Evil Spirits” or “Naked Forces,” according to court documents. So health plan officials sued Meisel and the promo producer, Gary Graver, to recoup the money, part of an aggressive campaign by SAG plan officials to clamp down on abuses.

The case is just one of more than 100 the union health fund audits every year. Not all cases are so complicated, and many involve simple checks to identify family members who qualify for benefits.

But some do take on a higher profile, as with the recent case of Hollywood Reporter columnist George Christy. SAG health plan officials and a federal grand jury are questioning whether the writer who dabbles in acting actually appeared in the productions he claims.

Meisel, meanwhile, did not return messages left at his Sherman Oaks home. Graver said he did nothing wrong when he made contributions to the SAG plan on behalf of Meisel, who acted in several of Graver’s promotional spots. Graver’s projects with Meisel, who had acting roles in the mid-1960s on episodes of “Mission: Impossible” and “Garrison’s Gorillas,” failed to attract investors and were never made into full-length movies.

The SAG plan is vulnerable to abuse, Graver contends.

“Sometimes producers or directors [join the union] to get health and welfare benefits,” Graver said. “Then they say a couple of lines as a policeman, an extra or whatever else and then those scenes get cut out of the picture. This has always gone on. It’s nothing new.”

Christy, who denies any wrongdoing, sometimes appeared in the films of movie producers he spotlighted in his column “The Good Life.” His column has been suspended while the investigations unfold.

Officials overseeing the SAG plan, which is operated separately from the actors union, say blatant abuses are relatively rare, typically involving small amounts of money and unknown actors who often work on the fringes of Hollywood. They say the Christy case is the exception rather than the rule.

Bruce L. Dow, who administers the plan, said 134 audits were conducted last year to check on whether health-care benefits were being legitimately received. Of that, one-third--or about 45--were improper, he said.

“A lot of times, what we are dealing with are very small production companies and industrial films--films about companies or a product,” Dow said. “We have very few problems with the major studios.”

That’s because larger studio productions usually have extensive accounting controls in place. What’s more, studios have a selfish interest in screening out potential abusers: It costs them money to contribute to the health plan on behalf of each actor.

Instead, small temporary production companies sometimes try to play fast and loose with the rules, plan officials say.

They also must track the gypsy-like movements of actors, who are freelance workers similar to independent contractors, who often work for production companies that disband once filming is done, making it more difficult to verify which actors worked enough to qualify for SAG’s health benefits.

In one case, the fund sued an acting school for allegedly videotaping classes and claiming it was on-camera work. The fund alleged in a 1999 lawsuit that it paid $52,029 in benefits to Ari Barak in 1993. Fund trustees demanded that Barak’s employer, Eden Harman of the Harman Avenue Theater, repay the money.

It’s difficult to say who else might have benefited. The fund’s records are not public, and most of the cases are settled during administrative hearings--long before lawsuits are filed.

To qualify for basic health benefits, actors have to earn at least $7,500 a year, and $15,000 a year for a higher level of coverage. To maintain coverage, actors must continue making that level of pay each year. Because of high unemployment, achieving those amounts is not easy: 71% of SAG’s nearly 100,000 members earn less than $7,500.

A-list actors have no problems meeting that financial threshold.

“Is it a Julia Roberts? No, it’s Mabel, and Mabel is often married to the producer or the director,” said actor Yale Summers, a SAG board member and trustee of the fund. “It will often jump out [during an audit] that one individual was paid $15,000 for a day’s work when everyone else was paid to scale.”

One of the main reasons for the abuse is that SAG’s health plan is generous compared with many others, Summers said.

“It’s a health plan that will cover most of your expenses,” Summers said.

Hollywood’s unions say they have stepped up policing the awarding of benefits for phony credits.

Officials with the International Alliance of Theatrical Stage Employees, which represents rank-and-file production workers such as grips and lighting technicians, said computerized systems and better policing had dramatically cut fraudulent cases during the last decade.

Thomas Hendricks, who administers the Writers Guild of America’s health fund, said bogus cases there probably number “less than five a year.” Some cases the writers fund reviews can be as minor as verifying whether two people receiving benefits are married, he said.

With the SAG fund, most cases where questions are raised are resolved when an actor’s work is verified through additional documentation, Dow said, or via an internal appeals procedure.

To verify an actor’s work, the fund can demand to see footage, call sheets listing actors on days when shooting allegedly occurred, contracts and payroll and tax records. When it finds problems, it usually starts by demanding the money be repaid.

In a few past cases, Dow said, phantom productions were created to get benefits for people.

In recent years, he said, the fund has cracked down on one of the major areas where that abuse occurred: owners of businesses who would try to get health benefits after appearing in their own promotional films. Now, owners need permission from the fund to put in for health benefits before they start shooting.

Actors involved typically are those who are down on their luck and need health benefits, Dow said, or those who have been in the plan but are having trouble getting enough work to stay in the plan.

The handful of cases that do become public are the ones that end up in court.

Gary Graver, Meisel’s Studio City friend, ended up filing for bankruptcy protection last year, listing $28,206 in debts, of which $26,000 was due to the fund. Another Los Angeles man, Kenneth T. Phillips, filed for bankruptcy protection three years ago because neither he nor his wife’s Goldwind Productions could pay the $47,538 the fund said Phillips owed.

In another case, the fund sought $14,891 from an unemployed Ohio man, Gary S. Materna, in 1998. The money covered the 1992 birth of his daughter, one of his four children, Materna said.

Materna said he was trying to start a side business at that time by making safety training films for aerospace companies.

But none of the companies was interested, so he never shot the films. Materna contends the plan only goes after little guys even though studios pay people salaries and benefits even when their work ends up on cutting-room floors.

After winning a judgment against Materna--for more than $30,000, including court costs and $15,110 in attorney fees--the plan placed a lien against his house.

Materna is heartsick that he is being forced to pay so much after the two sides discussed in 1999 settling the case for $1,200.

Summers defends the fund’s tactics.

“Our goal is not to punish the individuals; it’s to protect the participants in the plan to make sure these claims are valid,” Summers said. “The idea is to stop it, and to make sure the plan’s money is spent on valid claims. We don’t want our money going out to people who are not valid participants.”