High-flying Alliance Health of South Jordan has filed for bankruptcy in the aftermath of a raid by federal agents seeking evidence of possible fraud related to the sale of products to government health plans, the Salt Lake Tribune reported on Saturday. CEO Jeffrey Smith resigned April 14 after the bankruptcy filing in Texas earlier this month, company spokesman Brian Watkins said in an email, which noted its board of directors was now overseeing operations as it seeks to reorganize and emerge from bankruptcy. The filing came after Zions Bank closed the company's line of credit in the wake of the Feb. 23 federal raid, said bankruptcy attorney Elizabeth Green. The U.S. attorney's office for Utah declined to comment on the investigation. But a previous search warrant application filed in federal court said the case involves "a scheme to defraud health care benefit programs, resulting in payments for mail-order diabetic test strips under false and fraudulent pretenses."
