Business owner pleads guilty to fraud charges

The Daily Inter Lake

The owner of a Kalispell business has been convicted of defrauding insurance companies and area health-care providers out of thousands of dollars.

During a hearing Tuesday in U.S. District Court in Missoula, Kathleen A. Hunnewell, 44, pleaded guilty to mail fraud and filing false income tax returns.

As the owner of Physician's Billing Service, Hunnewell billed insurance companies and patients on behalf of area health-care providers and then pocketed portions of the reimbursements.

Hunnewell reportedly ran the scheme from June 2001 until October 2003.

According to prosecutors, Hunnewell would conceal the fraud by providing false billing and payment information to doctors and by hiding the actual payment records.

Investigators were able to track more than $2,500 in insurance company reimbursements, including payments from Blue Cross and Blue Shield of Montana and Medicaid, that Hunnewell is accused of diverting directly into her bank account.

But the Internal Revenue Service also believes that Hunnewell failed to report more than $225,000 she made on the scheme in her 2001, 2002, and 2003 federal income tax returns.

Hunnewell faces up to 20 years in prison, a $250,000 fine, and three years of supervised release at her March 26 sentencing hearing.