Doctors Benefit Insurance Co

An insurance firm that sold disability insurance to doctors and drew scrutiny from federal tax auditors has agreed to cease operation and return $500 million to participants, the Internal Revenue Service announced Monday. Doctors Benefit Insurance Co. of Barbados agreed to pay $2.34 million to the IRS but did not admit wrongdoing, according to a statement by the IRS. Doctors Benefit sold supplemental disability insurance policies to 2,800 U.S. doctors through Xelan Inc.

An insurance firm that sold disability insurance to doctors and drew scrutiny from federal tax auditors has agreed to cease operation and return $500 million to participants, the Internal Revenue Service announced Monday. Doctors Benefit Insurance Co. of Barbados agreed to pay $2.34 million to the IRS but did not admit wrongdoing, according to a statement by the IRS. Doctors Benefit sold supplemental disability insurance policies to 2,800 U.S. doctors through Xelan Inc.

A federal judge in San Diego froze $500 million in bank and investment accounts managed by Xelan Inc., which is accused of perpetrating a massive tax fraud and Ponzi scheme, authorities said Thursday. In a civil complaint filed Tuesday but unsealed Thursday, law enforcement officials claimed that the San Diego company lured doctors into a fraudulent tax scheme, which allowed them to write off millions of dollars in bogus deductions for supposed benefit plans and charitable contributions.