According to court documents, The Total Financial Group (TTFG) was a Louisiana company incorporated by Denis and Donna Joachim with the Louisiana Secretary of State on or about January 6, 2005, TTFG was most recently located at 406 N. Florida Street, Covington, Louisiana. TTFG had at least 13 employees and 56 independent sales agents. BORINO, employed at TTFG since 2012, was National Executive Director of Marketing for TTFG. As such, BORINO supervised, trained and instructed TTFG regional sales staff. BORINO primarily handled issues faced by agents, leads and registered customers.
TTFG and its owners, with BORINO and others, have created and marketed a medical reimbursement account program called “Classic 105”. Classic 105 claimed to be a multi-employer social protection plan that was marketed to employers as an additional benefit plan for their employees to reimburse them for medical expenses such as co-payments and deductibles. All Classic 105 participants were required to have a primary health insurance plan unrelated to and in addition to Classic 105. Classic 105 claimed to be made up of several components: a tax-exempt contribution between $ 1,000 and $ 1,600 per month made by an employee (who reduced the employee’s taxable income), a loan from a lender to the employee to offset the contribution, an insurance policy payable to the lender on the death of the employee to repay the loan , and fees paid by employee and employer directly to TTFG. TTFG told potential employer-clients that participants would never have to make direct payments to repay the loan and that due to the tax savings, most participants would receive an increase in their take-home pay. TTFG’s marketing program told potential employer-clients that contributions would be stored in a single account for each employee-participant and that any money not used at the end of each calendar year would revert to TTFG. TTFG also charged employee-participants a fee ranging from $ 150 to $ 250 per month and the employer a fee of five percent of each employee’s contribution amount. At its peak, more than 350 employer-clients and 4,400 employee-participants nationwide were enrolled in TTFG’s Classic 105 program.
According to court documents, TTFG committed wire fraud because of the way it actually operated Classic 105. TTFG never got a single loan or insurance policy for the Classic 105 program, and participants never got made from real contributions. The only funds offered to TTFG by employer-clients and employee-participants were fees. As a result, employee-participants and employer-clients have been defrauded into registering and paying fees for the Classic 105 program through fraudulent pretexts, representations and promises. In addition, participants and employers were exposed to potential negative financial consequences, including not only unpaid taxes, fees and penalties, but also ineligibility for certain government programs, including unemployment benefits and unemployment benefits. reduction in social security payments.
Although having been aware of these events, which constituted electronic fraud, on several occasions, BORINO did not disclose the information and tried to cover it up. For example, in September 2014, BORINO was informed that “TTFG has not entered into any agreement with any bank in any state” and also “neither solicited nor [sic] has not received any pooling of funds from a group of individuals. In the following months, when subordinates requested BORINO specific questions about the loan component and conveyed concerns that Classic 105 was “a scam and possibly an illegal tax evasion”, BORINO failed to disclose what he had been told: that there was no entity providing loans. In the following years, BORINO continued to indicate to subordinates and potential clients that loans from “Wall Street banks”, community banks and various “investment vehicles” fund the lending component.
BORINO faces a maximum prison term of three (3) years, a fine of $ 250,000, one year of supervised release, a mandatory special assessment fee of $ 100 and is subject to a restitution order for his conduct. Sentencing is scheduled for Judge Vitter for November 9, 2021.
U.S. Attorney Evans praised the work of the U.S. Department of Labor – Office of the Inspector General and the Employment Benefits Security Administration, Federal Bureau of Investigation, and IRS-Criminal Investigations in the investigation of this matter. United States Deputy Prosecutors Jordan Ginsberg, Maria Carboni and AndrÃ© Lagarde are charged with the prosecution.