Texas Man Sentenced to 12 Months and 1 Day for His Role as Executive National Marketing Director in Operating Sham Medical Reimbursement Account Program | USAO-EDLA

New Orleans – US Attorney Duane A. Evans announced that Joseph Anthony Borino, age 65, of Spring Hill, Texas, was sentenced on November 1, 2022 by United States District Judge Wendy B. Witter to 12 months and 1 day in prison. For his role in a wide-ranging scheme that defrauded thousands of individuals and companies across the United States, in violation of 18 USC § 4, wire fraud, a.k.a. wire fraud, was misconstrued. Judge Witter also imposed the sentence Borino He was ordered to pay a mandatory special assessment fee of $100 to one (1) year of supervised release upon his release from prison. Judge Witter on February 13, 2023 at 1:00 a.m.

According to court documents, Total Financial Group (TTFG) is a Louisiana business incorporated on January 6, 2005, by Dennis and Donna Joachim with the Louisiana Secretary of State. TTFG was most recently located in Covington, Louisiana and had at least 13 employees. and 56 independent dealers. Borino, has been with TTFG since 2012, serving as its National Executive Marketing Director. In that capacity, Borino Supervise, train and mentor TTFG’s regional sales personnel. Borino Issues faced by agents, potential customers and registered clients are primarily handled and resolved.

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TTFG and its owners, with Borino and others, created and marketed a medical reimbursement accounting program called “Classic 105.” Classic 105 was touted as a multiemployer welfare arrangement that was marketed to employers as a supplemental benefit plan to reimburse their employees for medical expenses such as co-payments and deductibles. Classic 105 participants were required to have a primary health insurance plan in addition to and unrelated to Classic 105. Classic 105 was said to consist of several components: a tax-free contribution by an employee of between $1,000 and $1,600 per month (which reduces the employee’s taxable income), a loan from a lender back to the employee to cover the contribution, and a loan payable to the lender upon the employee’s death to pay off the loan. An insurance policy and fees paid directly by the employee and the employer TTFG. TTFG told prospective employer-clients that participants would never have to make out-of-pocket payments to repay the loan, and as a result of the tax savings, many participants would receive an increase in their net take-home pay. TTFG’s marketing program told prospective employer-clients that contributions would be stored in an account unique to each employee-participant and that any unused funds would revert to TTFG at the end of each calendar year. TTFG charged employee participants a fee of between $150 and $250 per month and the employer a fee of five percent of each employee’s contribution. At its peak, TTFG’s Classic 105 program recruited over 350 employer-clients and 4,400 employee-participants nationwide.

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According to court documents, the way TTFG operated Classic 105 was wire fraud. TTFG never received a single loan or insurance for the Classic 105 program, and participants never made an actual contribution. Only cash fees tendered to TTFG by employer-clients and employee-participants. As a result, employee-participants and employer-clients were defrauded into enrolling in and paying fees for the Classic 105 program through fraudulent pretenses, representations, and promises. In addition, participants and employers were exposed to potential adverse financial consequences, including unpaid taxes, fees, and penalties, as well as ineligibility from certain government programs, including unemployment payments, and reduced Social Security payments.

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Despite being aware of these instances of wire fraud on several occasions, Borino The information was not revealed and tried to hide it. For example, in September 2014, Borino “TTFG has not entered into any transaction with any bank in any state” and “has not sought or [sic] Any pool of funds received from a group of individuals. In the following months, when subordinates requested Borino There were specific questions about the credit component and concerns that the Classic 105 could be a “fraudulent and often illegal tax dodge.” Borino He failed to disclose what he was told: that there were no lending institutions. In later years, Borino Continued to represent to subordinates and potential clients that loans from “Wall Street banks”, community banks and various “investment vehicles” would fund the debt component. During her sentence BorinoJudge Witter noted his seniority at TTFG, which was “based on nothing but fraud.”

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