Insurance Fraud Casebook: Paying a Premium for Crime

Ignorance Is Bliss, While It Lasts

REBECCA BUSCH

Wilfred E. Ernster II — known as Junior in his family — grew up in the family business of selling supplies to healthcare providers. His father, a recognized philanthropist and well-respected family man, started his original company in 1915. As the eldest son, Junior took over the family business and in 1965 started a new enterprise, Med Supplies R Us, to replace the flagging original company. He founded it with his two adult sons, Wilfred III and Earl.

Wilfred III and Earl grew up in the family business, like their father did, and they enjoyed the perks of being members of a wealthy family with a dynasty of sorts to preserve. They were used to seeing their parents get dressed up to go to fundraising events on the weekends, and they thought nothing of being featured in the society page of the local paper. They were raised to run a company that was the lifeline of a community and to be active in philanthropic causes. This was the norm in the Ernster family, and the sons knew they were expected to continue it.

Med Supplies R Us enjoyed progressive growth pretty much right out of the gate, which pleased Junior because he wanted to provide a solid, grounded business to secure the livelihood of future generations of Ernsters. He took the company public in 1979, but the goals of the public offering were not achieved and the company reverted ...