CEO of BLIS International Group Sentenced for Embezzlement from an Employee Benefit Fund

DENVER—Barney T. Lyles, age 59, a current resident of Makaha, Hawaii, and the former CEO of a now defunct insurance broker company called BLIS International Group, was sentenced Friday, May 7, 2010, by U.S. District Court Judge John L. Kane to five years probation for theft from an Employee Benefit Plan, and aiding and abetting. Judge Kane also ordered Lyles to pay $353,445.46 in restitution jointly and severally with co-defendant Brandon T. Ser Voss. Previously, Brandon T. Ser Voss, age 38, a current residence of Elgin, Illinois, was sentenced by Judge Kane for similar conduct.

Barney T. Lyles and co-defendant Brandon T. Ser Voss were indicted by a federal grand jury in Denver on September 23, 2008. Lyles pled guilty on October 9, 2009, and was sentenced by Judge Kane on May 7, 2010. Ser Voss pled guilty on July 10, 2009, and was sentenced by Judge Kane on October 2, 2009, to five years probation. Ser Voss was also ordered to pay restitution totaling $353,445.46 to the victims of their crime.

According to the stipulated facts contained in the indictment as well as Lyles’ and Ser Voss’s plea agreements, BLIS International Group, a Colorado corporation based in Denver, was an insurance brokering business that promoted and sold stop-loss insurance coverage. Stop-loss coverage is generally a type of insurance that covers medical expenses associated with catastrophic illness that exceed specified amounts or limits. Barney T. Lyles was the Chief Executive Officer (CEO) of BLIS International Group, and Brandon T. Ser Voss was the company’s Chief Financial Officer (CFO). Ser Voss also held the title of Accounting and Marketing Manager, and was at all times an employee of BLIS International.

From on or about September 30, 2003, through January 16, 2004, Lyles and Ser Voss willfully embezzled over $353,400 in funds that were supposed to be used to pay stop-loss health insurance premiums. Client companies pay insurance premiums to the insurance broker, who in turn pays that money to insurance carriers. The monies are to be held in a trust until they are sent to the insurance company. In this case, Lyles and Ser Voss took client money meant for the stop-loss insurance, instead using the funds for their own personal use, and for other purposes.

“Theft of plan assets jeopardizes the benefits of American workers and their families,” said Steven Eischen, Director of the Kansas City Regional Office of the Employee Benefits Security Administration. “The Department is committed to fighting fraud and abuse in health plans and bringing charges against those who abuse their position of trust.”

“When individuals in a position of trust and responsibility abuse their position our communities suffer through increased costs and lost services,” said FBI Special Agent in Charge James H. Davis. “Investigating fraud and abuse of Health Care and Health Benefit Plans will continue to be a priority of the FBI.”

This case was investigated by the Employee Benefits Security Administration, a division of the Department of Labor, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigation.

Lyles and Ser Voss were prosecuted by Assistant U.S. Attorney Jaime Pena.