An Isle of Palms resident charged last year with siphoning millions of dollars in health insurance premiums from church workers has been jailed, partly because he contacted a witness, a judge found.
Magistrate Judge Kevin McDonald revoked William Madison Worthy's bond based on evidence showing he violated the conditions of his release.
Worthy, 49, of Wild Dunes Resort is being held in the Greenville County Detention Center. He was remanded Oct. 6 at a bond hearing in the Upstate.
Worthy had violated the conditions of his release in part by continuing to have dealings in the insurance business, according to a notice on the U.S. District Court website. Also, he attempted to persuade a witness, a Blythewood woman who has served as his lawyer in the past, "to leave the state," according to the notice.
The U.S. attorney's office in Columbia said Wednesday that it would not discuss any aspect of the case, which is scheduled to go to trial in November.
A court document shows numerous exhibits were introduced at last week's bond hearing, including emails that made vague references to a home in Nassau and property in Costa Rica. It did not say who owned the home or property, nor did it explain the legal relevance of those messages.
Witnesses at the hearing included U.S. Department of Labor investigator and attorney Kathleen "Katie" Cauthen, who also is an elected member of Blythe- wood Town Council in the Midlands.
Cauthen was named in a cease-and-desist order that the S.C. Department of Insurance filed against Worthy and others in May 2010 that alleged he was a key figure in a nationwide insurance fraud that triggered at least $19 million in unpaid claims. In that order, Cauthen was identified as Worthy's lawyer and also as the chief executive officer of a company he did business with.
She also is listed on federal court filings as Worthy's original lawyer in his current criminal fraud case. She withdrew from that role in February.
Cauthen declined to comment on the case when reached Friday.
"I cannot speak to you," she said.
Worthy was charged with 16 counts of insurance and wire fraud in late 2010. The case against him centers around more than $3.5 million in health insurance premiums that he allegedly collected. The Spartanburg native was operating in his hometown at the time and working with a Tennessee associate, prosecutors said.
The alleged victim was Fellowship Services, a provider of employment benefits for pastors and church workers in multiple states. It wired or mailed the premiums to South Carolina between March 2004 and June 2006.
According to testimony from the Federal Bureau of Investigation, Worthy and a company he ran were to collect the money and pay the claims. Only about $1 million in claims were paid out, said the FBI, which did not respond to a request for comment this week.
The remaining $2.5 million was diverted to other accounts controlled by Worthy, according to a court document.
Worthy has pleaded not guilty and until last week he had been free on a $50,000 secured bond he posted in December.
His court-appointed attorney, Michael A. MacKinnon of Greenville, said Friday he had no comment about the case.
Worthy faces up to 30 years in prison and $500,000 in penalties.
Reach John McDermott at 937-5572.
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