On June 2, 2015, Bonney Hebert, the former president and sole owner of Academic Risk Resources and Insurance, LLC (“Academic Risk”), pleaded guilty to an information filed by the United States Attorney for Connecticut that alleged a scheme by Ms. Hebert that defrauded Aetna of $10.2 million in student health insurance premiums paid by Rutgers University, the State University for New Jersey. Until its 2013 court allowed sale to the Cross Agency, Academic Risk Resources was located at 930 Commonwealth Avenue, Boston.
Bonney Hebert’s Higher Education Team
Bonney Hebert headed at Marsh & McLellan and then at Well Fargo Insurance Services, when it was known as Acordia, a “Higher Education Team” with more than 13 professionals dedicated to servicing the needs of colleges and universities. Each of her successive moves with her team, from Marsh to Acordia and from Acordia to her own company, Academic Risk Resources and Insurance, LLC (“Academic Risk”), resulted in lawsuits claiming breach of fiduciary duties, improper use of confidential information and breaches of covenants not to compete or anti-piracy agreements.
However, her Higher Education Group had a knack for snagging large universities as insurance and risk management clients. A 2004 lawsuit filed by Acordia claimed that when the Higher Education Team decamped en masse on December 15, 2004, to join Ms. Hebert’s newly formed insurance agency, Academic Risk, they took with them the insurance programs they had managed for Tufts University, Northeastern University, Brandeis University, Bentley College and the University of Connecticut.
Academic Risk and Bonney Hebert sued in Suffolk Superior Court for embezzling $10 million dollars of premium
After Ms. Hebert settled a suit brought by Acordia, The Higher Education Team continued its success at Academic Risk in garnering university programs.
In July 2007, Academic Risk brokered for Rutgers, the New Jersey State University with over 65,000 students, its student health insurance program to Aetna. Under the arrangement worked out by Academic Risk, instead of Rutgers paying its students’ health premiums to Aetna and Aetna paying Academic Risk its commissions, Rutgers paid Academic Risk its premiums.
This billing arrangement continued from 2007 until February 2012, when Aetna apparently realized that a significant amount of the premium collected by Academic Risk remained unpaid.
Between February and June 2012, Aetna and Academic Risk discussed the overdue premium payments. Finally on June 27, 2012, Aetna Student Health’s Chief Financial Officer met with Ms. Hebert.
At the June 27 meeting, Ms. Hebert appeared with Academic Risk’s criminal and bankruptcy counsel but refused to say anything on advice of counsel. During this meeting, however, in front of Ms. Hebert, Academic Risk’s counsel advised Aetna that indeed Academic Risk owed Aetna some $9 million by Academic Risk’s calculation but that Academic Risk did not have the funds to pay Aetna.
The explanation for Academic Risk’s inability to Aetna its premiums apparently was that Academic Risk and Ms. Hebert had used the missing Rutgers’ premiums to fund losses from Academic Risk’s other lines of business as well as to pay the costs for the prior litigation involving Academic Risk.
Approximately ten days after its meeting with Ms. Hebert and her attorneys, Aetna sued Academic Risk and Ms. Hebert in the Business Litigation Session of Suffolk Superior Court alleging “misappropriation and diversion for their own purpose of millions of dollars of health insurance premiums due and owing to Aetna, over a period of several years.” (A copy of Aetna’s verified complaint is attached below).
At Aetna’s request, the court entered preliminary injunctions against Academic Risk and Ms. Hebert from transferring or encumbering their assets.
Ultimately, Aetna found that Ms. Hebert had diverted for her own use and the use of her agency, $10,358,728, or a little more than 47% of the $21,956,164 Rutgers paid to in premiums to Academic Risk for Academic Risk for its student health insurance premiums. The diversions took place over the course of three academic years as per the following chart
|Bonney Hebert and Academic Risk conversion of Rutgers-Aetna premiums paid|
|Academic Year||Total Premium Charged||Premiums converted|
Quiet sale of Academic Risk assets to Cross Agency yields $1.59 million for Aetna
In October 20012, Academic Risk requested the Court to modify the preliminary injunction against it to allow for the sale of substantially all of its assets to a third-party purchaser.
The assets sale provided that the “consideration to be paid for the Assets was to be “an ‘earn-out” over three years based on retention of ‘Qualified Revenue’ with no up-front payment of cash, but with an assumption of certain liabilities and contractual obligations by Buyer.” The court allowed the sale under the condition that any funds earned under the purchase and sale’s retention be held in escrow pending further order of the court.
Although Academic Risk did not publicly identify the buyer, the Bangor Maine Daily News reported on January 14, 2013, that The Cross Insurance Agency, headquartered in Bangor, had had acquired an insurance agency in Boston called “Academic Risk Resources” in the fall, but “had waited to make an announcement until they hired an experienced person to run the office”.
The Bangor Daily News stated, according to Brent Cross, the Cross Agency’s executive vice president, “…this acquisition greatly expanded Cross’ presence in the national market but that although schools don’t allow Cross to use their names, he said many are big-name schools with student enrollment up to 40,000.”
As of June 2, 2015, the retention earned for the benefit of Aetna under the purchase and sale agreement between Academic Risk and the Cross Agency totaled approximately $1.59 million.
Plea agreement for 57 months and restitution
On June 2, 2015, following an investigation of Aetna’s complaint by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division, Ms. Hebert, formerly of Swampscott, but now living in Killington, Vermont, waived her right to indictment and pleaded guilty in federal court in Hartford.
The information to which Ms. Hebert pleaded guilty to is a two count information that charged one count of wire fraud and one count of illegal monetary transactions. The two charges both stemmed from her theft of the Rutgers’ premiums paid to Academic Risk for the benefit of Aetna. The wire fraud count carries a maximum term of imprisonment of 20 years, while the count of engaging in illegal monetary transactions carries a maximum term of imprisonment of 10 years.
Under a plea agreement filed with the court, the United States Attorney agreed to seek no more than 57 months of incarceration with the sentencing scheduled for August 27, 2015.
Under the plea agreement, Ms. Hebert will also have an order entered against her to repay Aetna the $7,846,305.45 in restitution presently owed. This net amount results from Ms. Hebert receiving credits for the $1.59 million paid by the Cross Agency to Aetna and her forfeiting $900,000 in commissions owed to her by Aetna.
Superior Court Complaint, federal court Information, and plea agreement
Below are copies of the Aetna Superior Court complaint, the federal information, and Ms. Hebert’s plea agreement: