A jury has found James Graf guilty of federal fraud charges in connection with his work for Employers Mutual L.L.C., according to officials with the U.S. attorney’s office in Los Angeles.[@@]

Federal prosecutors say Employers Mutual, Glendale, Calif., was a fake health insurer that left more than $20 million in unpaid claims when it was shut down.

Prosecutors have accused Graf of conspiring with 2 other men to set up Employers Mutual and market fake health coverage.

Graf was convicted of 1 count of conspiracy, 5 counts of mail fraud, 10 counts of misappropriation in connection with a health benefit program, 6 counts of money laundering and 1 count of obstruction of justice, officials say.

Graf is scheduled to be sentenced March 6, and he faces a maximum possible sentence of 200 years in prison, officials say.

Graf formerly lived in Canyon Lake, Calif. but now is incarcerated, officials say.

Graf and his lawyer, Larry Bakman, were not immediately available to comment on the conviction.

Employers Mutual sometimes falsely presented itself as being a federally regulated multiple employer welfare association that was exempt from state regulation, and, in other cases, it told insurance agents and members of the public that its plans were insured by a variety of a large, reputable insurers, officials say.

California insurance regulators had previously sanctioned Graf for running an unauthorized health insurance plan in the state, officials say.

Officials note that Employers Mutual had no connection with Employers Mutual Insurance Company, Des Moines, Iowa.