Texas Student Insurance Firm Indicted For Racketeering, Fraud

RICHMOND, Va. (April 9, 2013)--GM-Southwest Inc., a Texas company that provided health insurance for Virginia Tech students, is named in an indictment unsealed Tuesday charging 57 counts of racketeering, conspiracy, money laundering and fraud.

The indictment unsealed in U.S. District Court in Abingdon, Va., accuses GM-Southwest Inc. and its former owner, John Paul Gutschlag, 73, of fraudulently overstating claims paid on behalf of Virginia Tech by more than $9 million from 2003 through 2010.

Authorities allege the inflated claims caused students and Virginia Tech to pay higher premiums.

The company is based in Frisco.

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