Insurer, Aspen couple agree to fraud suit settlement

A national insurance carrier on Monday filed a court notice indicating its dismissal of a civil action against an Aspen couple accused of reaping early $700,000 in reimbursement claims made through false pretenses.

Transamerica Life Insurance Co.’s dismissal marked the quiet conclusion of the lawsuit carried out by the Iowa-based company in U.S. District Court in Denver, where it alleged defendants Nikifor Budsey II and Janey Gubow posed as a respective physically debilitated person and his constant caregiver.

The lawsuit accused Budsey II of filing reimbursement claims with his insurance carrier, Transamerica, for hundreds of dollars of day for care he did not receive or need. Transamerica was under the impression Budsey was paying Gubow for the care she provided him, and therefore reimbursed Budsey for over a period of seven years before catching onto the alleged scheme.

“Plaintiff, Transamerica Life Insurance Company, by and through undersigned counsel, hereby provides notice of dismissal of this action, with prejudice,” read the notice of dismissal, which was filed by counsel John Daly of the Denver firm Cozen O’Connor.

Daly did not respond to telephone and email messages seeking comment Monday, and Carbondale attorney Jill Edinger was out of the office and could not be reached.

Dismissing the case with prejudice means Transamerica can’t make another complaint with similar allegations against the defendants in the future.

Transamerica filed the federal complaint Nov. 12, making a demand of precisely $696,963.26 from the defendants and additional monetary damages due to what it called “egregious” conduct by Budsey and Gubow that “shocks the conscience.”

Edinger waived service of the suit on the defendants Dec. 21 and had until Feb. 19 to file a formal response to Transamerica’s allegations, according to court documents.

A court filing Edinger made Feb. 18, however, indicated Transamerica and the defendants were working toward a resolution.

“The parties have been actively, and productively, negotiating resolution of this dispute. They appear very close to settlement,” Edinger moved the court in a request seeking its permission to have until March 1 to file a response to the lawsuit while negotiations continued.

The court was noticed March 1 that the two parties had reached a settlement agreement and all that was needed to dismiss the case was to finalize the deal. That is what happened Monday with Transamerica’s filing.

Transamerica launched its investigation into and Budsey and Gubow in early January 2019. The probe including dispatching investigators to Aspen where they took photos of Budsey II functioning without any apparent physical restraints, struggles or disabilities, said the lawsuit.

Budsey and Gubow were alleged to have represented to Transamerica representatives their relationship was strictly caregiver-patient and they were not married; however, the company’s investigation showed “Gubow was never seen providing care of any kind to Budsey on any date of surveillance,” alleged the suit. Budsey’s policy excluded caretaker work provided by a spouse, the complaint said.

“The surveillance confirmed that Budsey did not receive care, and he did not need it,” the suit said. “The surveillance also confirmed that Budsey and Gubow are living together as husband and wife. Upon information and belief, this is because they have been married for all or substantially all of the period of Budsey’s claim for benefits.”

During a January 2019 assessment, Budsey, now 61, had continued to tell Transamerica officials he needed a wheelchair and walker, as well as a urinal/bedpan.

Investigators also snapped a photo of Gubow skiing, which conflicted with a time when she was supposed to have been caretaking Budsey, according to the suit.

Other incidences in 2020 convinced Transamerica that Budsey and Gubow were playing the insurance carrier.

“Gubow was never seen providing care of any kind to Budsey on any date of surveillance,” the suit said. “The surveillance confirmed that Budsey did not receive care, and he did not need it.”