SAN DIEGO — A Las Vegas couple accused of bilking San Diego County seniors out of nearly $2 million by selling them bogus insurance plans are now facing felony charges that could land them both in prison.
Michael Woodward, 50, and his wife Melissa, 47, each pleaded not guilty Friday to 11 counts, including residential burglary, grand theft, theft from an elder and selling insurance without authorization.
Prosecutors contend that the scheme involved at least 238 victims.
District Attorney Bonnie Dumanis said at a news conference Friday that the insurance plans, which cost as much as $4,000 a year, promised to pay for unlimited in-home, nonmedical services, but in reality were "absolutely worthless."
The victims would pay for the services, such as cleaning, cooking and shopping, and then submit a request for reimbursement. Small claims would sometimes be paid, but claims for larger bills were ignored or rejected.
Michael Woodward, who also went by Mike Woods or Mike Smith, would then return to victims' homes and instruct them to pay more premiums for additional services, Dumanis said.
"The defendant picked his victims carefully, taking advantage of the fact that they were elderly and easily confused," she said.
The couple were arrested April 10 at their home in Las Vegas and extradited to San Diego. A Superior Court judge decided at their arraignment Friday afternoon to keep bail for each defendant at $1 million.
During the court hearing, defense attorneys had asked the judge to consider lowering the bail, given their lack of significant criminal histories and the nature of the acts they are accused of committing. One of the lawyers said it could be argued that the contracts the Woodwards' company offered were agreements for services, not insurance policies.
Attorney Domenic Lombardo told the judge that no criminal charges had been filed against Michael Woodward in Oregon, Washington or Minnesota, where he had previously done business. Lombardo also noted that his client only had one conviction on his record, a misdemeanor.
Earll Pott, who represented Melissa Woodward, said his client had no criminal record and that she is the principal caretaker for her 14-year-old autistic son.
"She is desperate, your honor, to return to him," Pott said. He also argued that she did not enter anyone's home to sell or solicit clients for the business.
Deputy District Attorney Michael Zachry said in court that Michael Woodward — a formerly licensed insurance salesman — and his wife were the sole employees at the company, which they operated under various names, including Secure Tomorrows, Home Health America and Secure Care.
He said the pair used their ill-gotten gains to pay for a lavish lifestyle that included a home on a golf course, art, jewelry and other expensive items.
Vada Bennett of Carlsbad said at the news conference that her parents were among those who lost money in the scheme.
Her 87-year-old father shelled out $18,000 for a plan he thought would help him take care of his wife of 55 years, who was suffering from kidney disease.
When Bennett asked her father how it was that he was able to get the insurance, he told her the seller assured him that he was getting a special deal because he was a veteran.
"I'm sad to say my mother did not live to see this day, but my dad has and he's seeking justice," Bennett said.
She choked back tears as she thanked the investigators and everyone involved in the case.
"It takes a really special narcissism and cruelty to live an opulent lifestyle at the expense of vulnerable, trusting, often physically or mentally fragile senior citizens," Bennett said.
California Insurance Commissioner Dave Jones said the Woodwards had been operating the scam for about 10 years in six states and had raked in about $6 million.
Jones said it is very likely that there are additional victims who have not come forward and he encouraged anyone who may have been defrauded by the scheme to contact the District Attorney's Office or the state Department of Insurance hotline at (800) 927-4357.
Dumanis said the Woodwards' bank accounts and other assets have been frozen, and authorities hope to reimburse victims to whatever extent possible. One person in San Diego lost as much as $100,000, she said.
If convicted on all charges, the Woodwards each face up to 16 years in prison.