Case 1:22-cv-02145-MHC Document 1 Filed 05/27/22 Page 1 of 17

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

MARTIN J. WALSH, Secretary, )

United States Department of Labor, )
)
Plaintiff, )
)
v. ) Case No. ____________
)
THE ALIERA COMPANIES, a Delaware )
Corporation FORMERLY KNOWN AS )
ALIERA HEALTHCARE, INC., )
AND SHELLEY STEELE, an Individual. )
)
Defendants. )

COMPLAINT FOR ERISA VIOLATIONS

Martin J. Walsh, Secretary of the United States Department of Labor (the

"Secretary"), alleges as follows:

1. This action is filed under the Employee Retirement Income Security

Act of 1974, as amended (“ERISA”), 29 U.S.C. § 1001, et seq., against Aliera

Healthcare, Inc. (“Aliera”) and its Chief Executive Officer, Shelley Steele

(“Steele”) (collectively “Defendants”), for engaging in transactions prohibited by

ERISA, paying themselves and affiliated companies millions of dollars from

ERISA-covered plans’ assets without the agreement of, or disclosure to, the

employer plan sponsors or plan participants. In doing so, they engaged in self-

dealing in violation of the prohibited transaction provisions of ERISA.

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2. By taking enormous payments from an account holding assets of its

employer plan clients, without the agreement of or disclosure to the plans’

employers and participants, Aliera also breached its fiduciary duty of loyalty, and

benefitted themselves at the plans' expense, in violation of ERISA’s prohibited

transactions provisions.

3. The Secretary seeks a full refund of the money Aliera, Steele, and

their affiliates were paid from ERISA-covered employer groups and to have

Aliera, its subsidiaries, and Steele permanently barred from acting as a fiduciary or

service provider with respect to any ERISA-covered plan.

4. This action arises under ERISA and is brought to obtain relief under

ERISA §§ 409 and 502(a)(2) and (5), 29 U.S.C. §§ 1109 and 1132(a)(2) and (5), to

redress violations and enforce the provisions of Title I of ERISA.

JURISDICTION AND VENUE

5. This Court has subject matter jurisdiction over this action pursuant to

ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1).

6. Venue for this action lies in the Northern District of Georgia pursuant

to ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2).

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PARTIES

7. The Secretary, pursuant to ERISA §§ 502(a)(2) and (5), 29 U.S.C. §§

1132(a)(2) and (5), has authority to enforce the provisions of Title I of ERISA by,

among other things, the filing and prosecution of claims against persons who

violate ERISA.

8. Aliera is a Delaware corporation headquartered in Atlanta, Georgia,

within the jurisdiction of this Court, that provides services to employer sponsored

ERISA group health plans and also provides health coverage purchased by

individuals.

9. Defendants provided services to more than a thousand employer

group health plans, as defined by ERISA § 3(1), 29 U.S.C. § 1002(1), that were

established by individual employers and subject to ERISA-coverage pursuant to

ERISA § 4(a), 29 U.S.C. § 1003(a).

10. Aliera received payments from ERISA-covered employer group plans

and from individuals who bought its health care products, and deposited those

commingled payments in Aliera’s Wells Fargo account (“Account 0973”). Aliera

and Steele, who was Aliera’s CEO and the signatory for Account 0973, exercised

control over the funds in that account, including the employer group plans’ assets,

consisting of employer and employee contributions. Aliera and Steele’s exercise

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of control included paying money from that account to themselves and their

affiliates, paying health claims they determined should be paid, and paying third

parties they selected and employed.

11. By exercising control over contributions which are plan assets within

the meaning of 29 C.F.R. § 2510.3-102, Defendants were fiduciaries within the

meaning of ERISA § 3(21)(A)(i), 29 U.S.C. § 1002(21)(A)(i).

Party In Interest Transactions

12. As fiduciaries and service providers to the employer group plans,

Defendants were also parties in interest within the meaning of ERISA § 3(14)(A)

and (B), 29 U.S.C. § 1002(14)(A) and (B). Steele was also a party in interest

within the meaning of ERISA § 3(14)(E) and (H), 29 U.S.C. § 1002(14)(E) and

(H), because she was an officer of Aliera and 89% owner of Aliera’s stock.

13. During the time they were fiduciaries, Defendants made payments to

Aliera totaling $83,960,478.81 from Account 0973.

14. During the time they were fiduciaries, Defendants made payments

from Account 0973 to Steele totaling $6,123,274.77, and made periodic loans from

that account to Steele totaling $3,824,582.93. The loans did not provide for any

payment of interest and had no repayment terms. Steele only repaid $3,226,028.87

of the loans.

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15. Steele was also the 100% owner of Ciel Capital Group (“Ciel”).

Based on Steele’s ownership of Ciel, Ciel was a party in interest within the

meaning of ERISA § 3(14)(G), 29 U.S.C. § 1002(14)(G). Ciel ostensibly provides

administrative oversight and plan management, design and configuration services,

and employed Steele’s husband, Timothy Moses. During the time Defendants

were fiduciaries, they made payments to Ciel totaling $6,520,155 from Account

0973.

16. By July 2019, Aliera initiated a corporate reorganization and changed

its name to “The Aliera Companies.” The three entities listed below were wholly

owned subsidiaries of The Aliera Companies, and therefore parties in interest

within the meaning of ERISA § 3(14)(G), 29 U.S.C. § 1002(14)(G). While the

Defendants were fiduciaries, they paid each of those wholly owned Aliera

subsidiaries the following amounts from Account 0973:

i. Advevo LLC (“Advevo”)--$77,071.85;

ii. Ensurian Agency LLC (formerly known as Aliera Healthcare of

Georgia LLC) (“Ensurian”)--$942,454.20; and

iii. Tactic Edge Solutions LLC (“Tactic Edge”)--$262,049.32.

17. Timothy C. Moses (“Moses”) is Steele’s husband. As the husband of

Steele, who is a fiduciary to the plans, and owner of Aliera, a service provider for

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the plans, Moses is a party in interest within the meaning of ERISA § 3(14)(F), 29

U.S.C. § 1002(14)(F). On July 11, 2018, Defendants made a payment of

$28,333.99 to the American Express credit card of TC Moses.

18. Upon information and belief, Steele was a manager of and owns or

has an ownership interest in Burdette Atlanta LLC (“Burdette”) which in turn owns

Steeles’s personal residence located at 131 Burdette Road, Atlanta, GA 30327

(“Burdette Property”). Based on Steele’s ownership and management affiliation

with Burdette, Burdette is a party in interest within the meaning of ERISA §

3(14)(G), 29 U.S.C. § 1002(14)(G). On June 19, 2017, Burdette bought the

Burdette Property for $2.4 million and, during the relevant time period, Defendants

transferred from Account 0973 payments totaling $100,000 to a Burdette account

which were, upon information and belief, used to make Burdette Property

mortgage payments.

19. Through the payments described in paragraphs 13-18 above,

Defendants, while fiduciaries of the plans, made payments of more than $102

million to parties in interest from Account 0973.

GENERAL ALLEGATIONS

20. In December 2015, Moses and his wife, Steele, formed Aliera as a

privately held Delaware corporation under the name Aliera Healthcare, Inc. Moses

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is a convicted felon who was convicted of federal securities fraud and perjury in

connection with a business he owned in 2005. Moses was sentenced to over six

years in prison and ordered to pay $1.65 million in restitution. See United States v.

Moses, Case No. 1:04-CR-508-1-CAP.

Aliera’s Creates Unity Healthshare, LLC.

21. Aliera initially partnered with the Virginia-based Anabaptist

Healthshare (“Anabaptist”), a non-profit corporation that operated as a Health Care

Sharing Ministry (“HCSM”) allegedly limited to members of the Gospel Light

Mennonite Church of the Anabaptist faith. Under 26 U.S.C. § 5000A(d)(2), an

HCSM is defined as a tax-exempt organization that has been in existence since

December 31, 1999, in which health care costs are shared among members with

common ethical or religious beliefs.

22. In late 2016, Aliera and Anabaptist entered into a preliminary

agreement to market its HCSM product through a new entity that the parties would

name Unity Healthshare, LLC (“Unity”). On November 10, 2016, Tim Moses

signed a Memorandum of Understanding as Aliera’s Executive Director and Tyler

Hochstetler signed it as an Anabaptist Director.

23. On February 1, 2017, the parties formalized their agreement. The

February 1, 2017 Agreement was signed by Tim Moses as Aliera’s Executive

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Director, Eldon Hochstetler as an Anabaptist Director, and Tyler Hochstetler as a

Unity Director.

24. The February 1, 2017 agreement allowed Aliera to combine

HealthPass, its own minimum essential coverage product, with the Unity HCSM,

and sell the combined product to individuals and employer groups nationwide.

Although it claimed exemption from federal and state requirements as a HCSM,

Aliera did not limit its market and sales to members of the Anabaptist faith. By

mid-2018, after the Anabaptist leadership determined that, among other things,

Tim Moses had written unauthorized checks to himself from Unity’s funds, it

severed the relationship with Aliera.

Aliera Creates Trinity Healthshare Inc.

25. Having lost Unity as a vehicle to market its HCSM products, Aliera

incorporated a new alleged HCSM, Trinity Healthshare Inc. (“Trinity”). Trinity

was incorporated in Delaware on June 27, 2018. William Thead III, a personal

friend of the Steele/Moses family, became Trinity’s Chairman. (Trinity later

changed its name to Sharity Ministries).

26. On August 13, 2018, Aliera executed a contract with Trinity. The

Trinity Agreement gave Aliera the exclusive right to develop, market, and sell

Trinity’s plans, and it made Aliera responsible for determining product pricing for

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Trinity plans and medical expense eligibility. The Agreement gave Aliera

ownership of Trinity’s membership roster. When incorporated, Trinity had no

members enrolled in its products.

27. The Trinity Agreement also delegated all of Trinity’s financial

accounting and customer billing functions to Aliera. Under the Trinity Agreement,

new members enrolled with Trinity were “deemed to be Aliera consumers.” Their

enrollment fees were required to be paid directly into an Aliera bank account and

only later transferred to a Trinity bank account (to which Aliera was a signatory)

for the members’ claims payments. Aliera also was responsible for managing

third-party administrators that processed medical claims.

28. Although most of Aliera’s business is selling healthcare to

individuals, from at least November 2015 until December 2019, Aliera created,

marketed, sold, and administered health coverage for approximately 1,025

employers across 39 states for ERISA-covered employer plans. Aliera sold

healthcare benefit products to self-funded ERISA-covered employer groups that

bought Aliera coverage as a group health plan for their employees. To fund plan

benefits, these employers made healthcare plan contributions to Aliera from their

own funds and from contributions withheld from employees’ pay. After the

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Department initiated an investigation of Aliera, Aliera represented that it ceased

selling any products to employer groups after December 2019.

Aliera’s Operating Bank Account 0973

29. All healthcare payments to Aliera from individuals and from

employer group plans, were deposited into Aliera’s operating Account 0973.

Aliera received a combined total of at least $543,941,705 of healthcare payments

in that account from employer groups plans and from individuals who bought

health care products. Aliera only used approximately $189,226,916 of that money

to pay healthcare claims.

30. Aliera billed employers monthly for healthcare payments for

employer group plans. For the period of January 2016 to November 2019, Aliera

billed employer group plans for healthcare coverage $17,086,015. Upon

information and belief, that amount was deposited into Account 0973.

31. Because Aliera commingled payments from ERISA-covered employer

plans with payments made by individuals, the percentage of employer plan

contributions (approximately $17,086,015) to the total amounts contributed to

Account 0973 (approximately $543,941,705)—approximately 3.14%, represents

the portion of plan assets that were in Account 0973, and the percentage of

prohibited payments to Aliera, Steele, and their affiliates from that account that are

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attributable to ERISA-plan assets. The payments that Defendants made to Aliera,

Steele, and affiliates from Account 0973 were all prohibited transactions, and

totaled more than $102 million. Approximately 3.14% of those payments came

from the assets of ERISA plans.

Bankruptcy Proceedings

32. Sharity (formerly Trinity) filed bankruptcy on July 8, 2021, and Aliera

was forced into Chapter 11 by the filing of an involuntary petition against it on

December 3, 2021. A chapter 11 plan of liquidation for Sharity was confirmed on

December 2, 2021 pursuant to which a Liquidating Trust has been established

through which distributions will be made to creditors and an adversary proceeding

by the Liquidating Trust against Aliera and various of its wholly owned

subsidiaries pursued. The Sharity plan of liquidation includes a “Plan Injunction,”

which has an explicit carveout for actions against Aliera, its subsidiaries and

affiliates, and Aliera’s current and former officers, directors, shareholders. Claims

against Sharity are estimated to be $300 - $600 million or more, and distributions

to creditors are estimated to be only 0-10% per dollar. The Department filed an

unliquidated proof of claim in the Sharity bankruptcy. Section 362(b)(4) of the

Bankruptcy Code provides an exception to the automatic stay, 11 U.S.C. § 362(a),

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for suits by governmental entities, which allows this lawsuit to go forward, but will

bar enforcement of any money judgment against Aliera outside of the bankruptcy.

State Enforcement Actions

33. At least 16 states have taken enforcement actions against Aliera and,

in some actions, its individual principals. New York regulators issued one of the

most comprehensive orders, In the Matter of: The Aliera Companies, Inc., Trinity

Healthshare Inc., No. 2020-0039-C (Statement of Charges and Notice of Hearing

Oct. 20, 2020), summarized as follows. The New York State Department of

Financial Services (“DFS”) brought an enforcement action finding that Steele and

Timothy Moses formed Aliera in 2015 to evade state insurance law by associating

with a Mennonite organization and thereby claim their illegal insurance scheme

was selling products through a purported HCSM. By mid-2018, church leaders

discovered that Tim Moses had written unauthorized checks to himself from the

HCSM’s funds and sued him. Aliera then created Trinity to use “as a shell entity

to conduct an unregulated insurance business for its own profit.” After Trinity's

incorporation, Aliera and Trinity entered into an agreement in 2018 “wherein

Aliera was named the administrator, exclusive marketer, and program manager for

Trinity, effectively controlling all aspects of Trinity’s business.” Aliera also

“directed that enrollment fees from Trinity members would first be paid directly

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into an Aliera bank account, and only subsequently transferred to a Trinity bank

account (to which Aliera was a signatory), for the actual payment of members’

medical costs.” DFS found that the Agreement gave Aliera control over an “an

unacceptably high proportion of consumer premiums.” Citing an example, DFS

noted that one plan was left with “only approximately 16% [of the premiums] in

reserve for members medical benefits.” For another plan, “only 9.8% of collected

fees were allocated to reimburse members’ medical expenses, with the remaining

fees earmarked mostly for alleged administrative costs and commissions.” DFS

then contrasted these ratios to the ACA requirement that insurers spend at least

80% of premium dollars on medical benefits for members, noting, “[i]n sum, only

a small fraction of premiums was available to reimburse medical expenses,

resulting in unpaid claims for consumers who were led to believe that they had

purchased reliable health care coverage.”

FIRST CLAIM (ERISA § 406(b) Violation: Self-Dealing in Plan Assets)

34. Pursuant to Rule 10(c), Fed. R. Civ. P., the Secretary adopts and

incorporates by reference paragraphs 1 through 33, inclusive. Defendants violated

ERISA § 406(b)(l), 29 U.S.C. § 1106(b)(l), by causing the payments to Aliera,

Steele, and affiliate person or entities, as set forth in paragraphs 1 through 33.

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35. Defendants failed to protect the interests of the plans and violated

their fiduciary duties of loyalty by, among other things, depositing all employer

and employee contributions into Aliera’s own account, and making payments from

that account to themselves and their affiliates.

36. Defendants, who were fiduciaries and parties in interest, violated

section ERISA § 406(b)(1), 29 U.S.C. § 1106(b)(1), by dealing with the assets of

the plans in their own interest and for their own account by distributing to

themselves fees and other payments that had not been agreed upon by or disclosed

to the fiduciaries of the employer group health plans who were independent of

Aliera.

37. All of the payments made to themselves, their affiliates, and other

parties in interest from Account 0973 were prohibited transactions. From January

2016 to November 2019, Defendants, who were fiduciaries, caused payments of

more than $102 million to parties in interest, including themselves and their

affiliates, from an account that held plan assets. Those payments were prohibited

transaction under ERISA § 406(b)(1), 29 U.S.C. § 1106(b)(1).

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SECOND CLAIM (ERISA § 404(a)(1)(A) Violations:

Breach of Fiduciary Duty of Loyalty)

38. Pursuant to Rule 10(c), Fed. R. Civ. P., the Secretary adopts and

incorporates by reference paragraphs 1 through 37, inclusive. Defendants violated

ERISA § 404(a)(l)(A), 29 U.S.C. § 1104(a)(l), by causing, engaging in or allowing

the acts or omissions set forth in paragraphs 1 through 37.

39. ERISA § 404(a)(l)(A), 29 U.S.C. § 1104(a)(l), requires fiduciaries to

discharge their duties with respect to the plans solely in the interest of the plans’

participants and beneficiaries and for the exclusive purpose of providing benefits

and defraying reasonable expenses of plan administration. This is referred to as

the fiduciary duty of loyalty.

40. Defendants failed to act solely in the interest of the participants and

beneficiaries, for the exclusive purpose of providing benefits to participants and

the beneficiaries of the plans and defraying reasonable expenses of administering

the plan, when they deposited all employer and employee contributions into their

own corporate account, which they comingled with other assets, controlled and

then distributed the plans’ assets at will and for their own benefit and the benefit of

their affiliated entities and other parties in interest.

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41. As a result of their breaches of fiduciary duty, the Defendants have

caused the employer group plans to suffer financial losses for which they are

jointly and severally liable pursuant to ERISA § 409(a), 29 U.S.C. § 1109(a).

PRAYER FOR RELIEF

WHEREFORE, the Secretary respectfully requests that:

1. Defendants, jointly and severally, restore all losses to the plans;

2. Defendants be permanently enjoined from serving directly or indirectly

through any person or entity as service providers or fiduciaries for, or having

control over the assets of any employee benefit plan subject to ERISA, and enjoin

Defendants from engaging in any further violations of Title I of ERISA;

3. Award the Secretary the costs of this action; and

4. The Court grant such further relief as may be just and equitable.

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Respectfully submitted,
Dated: May 27, 2022
For the Secretary:

OF COUNSEL: SEEMA NANDA

Solicitor of Labor
Ryan K. Buchanan
United States Attorney G. WILLIAM SCOTT
Associate Solicitor
Lori M. Beranek Plan Benefits Security Division
Assistant U.S. Attorney
600 U.S. Courthouse ROBERT FURST
75 Ted Turner Drive, S.W. Counsel for Litigation
Atlanta, GA 30303
404/581-6000 By: /s/ Christine D. Han
Georgia Bar No. 053755 CHRISTINE D. HAN
Lori.beranek@usdoj.gov Senior Trial Attorney
Han.christine.d@dol.gov
New York Bar No. 5227053

Marcia Bove
Senior Trial Attorney
Maryland Bar No. 8401010007

Leonard Gerson
Trial Attorney
New York Bar No. 2138568

Office of the Solicitor

Plan Benefits Security Division
U.S. Department of Labor
P.O. Box 1914
Washington, DC 20013
Tel: (202) 693-5600
Fax: (202) 693-5610

Attorneys for Plaintiff

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