Insurance Fraud e-Port

Insurance Fraud Weekly e-Port
Week ending July 13, 2007
www.insurancefraud.org

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LEGISLATION & REGULATION

* Vermont passed a law setting stiff fines for contractors that swindle workers comp insurers out of premiums. Fines can begin at $100 a day per employee for each day of non-compliance, and a flat $5,000 per offense. SB 196 also requires the insurance and labor departments to jointly study the extent of workers compensation misclassification in the state’s construction business. A report is due to the legislature by the end of this year.

* Idaho has passed a law expanding workers comp fraud to include premium swindles. HB 98 also sets penalties for businesses that avoid paying the proper premiums for insurance. The law also makes it a crime to solicit people to file fraudulent insurance claims.

Note: Texts of anti-fraud bills are available on the coalition’s website here.

CRIMINAL CONVICTIONS

* A German national went on a rampage of insurance fraud and other crimes after stealing the identity of a Salt Lake City locksmith. York A. Rogge overstayed his tourist visa and avoided deportation by assuming the identity of locksmith David Dahlstrom. He had lost his wallet containing a birth certificate, Social Security card and driver license, and Rogge somehow acquired the data. Rogge then made two claims against Dahlstrom’s insurer for auto accidents. Rogge’s lively crime spree also included convictions for DUI, vandalism, burglary, making a bomb threat and other acts. He received three years for identity theft Tuesday in Los Angeles court after his girlfriend ratted out his true identity. Dahlstrom, meanwhile, is trying to clear up his wrecked credit.

* Joseph Houghtaling is scratching his head. The Albany, N.Y.-area man was acquitted of staging an accident to bilk State Farm, but received up to four years Monday for falsifying business records. Why should he serve time for forging records when he’s innocent of the underlying insurance scheme? he wonders. A despondent Houghtaling tried to kill himself by drinking antifreeze in a courthouse bathroom less than an hour before a jury handed down its verdict in May. He’s now recovered. Several Houghtaling members were arrested for staging accidents, but a jury has rejected 105 of the 107 charges. Family patriarch Alfred Houghtaling pleaded guilty to a misdemeanor insurance-fraud charge last fall, but has since died.

* An Alabama agent who once headed the Fairhope, Ala. airport authority steered at least four client employee-leasing firms to a sham insurer that sold them useless workers comp coverage. Thousands of employees had no coverage in 2001 and 2002 when W. Colton Coile put clients in touch with Regency Insurance of the West Indies. Regency sold the firms hundreds of thousands of dollars of comp coverage. The Point Clear man admitted he did no research to see if Regency was legitimate. Coile pleaded guilty and faces up to five years in federal prison when sentenced. He recently was named Volunteer of the Year in Fairhope.

* A Long Island gutter-installing business must repay insurers nearly $520,000 for dodging state-required workers comp premiums. In one of the largest comp cases brought by the state, Long Island Gutters claimed it had only two employees when it actually had as many as 15. Size of workforce is one factor in computing workers comp premiums. State investigators staked out the company and discovered the discrepancy. Long Island Gutter simply made mistakes in reporting its employees to the state, the company argued, contending that it’s “very common” for discrepancies to show up in audits of larger firms.

* A nursing assistant sought workers comp coverage, claiming she was injured while lifting a patient. The unnamed Florida woman said she felt a pop and burning sensation in her back when she climbed into her car after her shift ended. She returned to light-duty work a week later, but claimed that aggravated her back injury. But video surveillance caught her washing, vacuuming and detailing her vehicle. She rotated her body, squatted, kneeled and sat without any apparent discomfort. Witnesses also said the woman admitted she didn’t hurt her back at work. Claim denied.

* Rolando Ruiz won a last-minute reprieve from execution by lethal for shooting Theresa Rodriguez in San Antonio so her husband could collect at least $250,000 in insurance money. Ruiz would’ve become the 19th person executed in Texas this year. He successfully argued in federal court that he didn’t have effective counsel. Ruiz shot Rodriguez in the head in her garage with a .357-caliber Magnum pistol in 1992. Her husband Mark Rodriguez paid him $2,000. Four others involved in Theresa’s murder received life sentences.

CRIMINAL CHARGES

* William Craig Miller says he’s given up. The Scottsdale, Ariz. man allegedly executed Steven Duffy and Tammy Lovell to prevent them from testifying against him on charges that he torched his home for insurance money. Miller also allegedly killed three others in a gated community in east Mesa. But Miller said this week he wants to dump his attorney and plead guilty. The court is treading carefully, since a guilty plea could land Miller a death sentence. When the judge asked Miller about his qualifications for representing himself in court, he said he was a criminal justice major for two years in college. Miller also takes medicine commonly prescribed for schizophrenia and bipolar disorder.

* Being alone hurt Debbie Eiden’s cause. The Scranton, Pa.-area woman torched her home for insurance money, prosecutors charged this week. She admitted she was the only one at her home before the fire, and the doors all were locked when firefighters arrived, an arson investigator testified. The fire was set in a chair and a loveseat, and Eiden said she left the house, taking her pets with her, about 15 minutes before the blaze erupted. Eiden further aroused suspicion when she kept changing her accounts of the fire, the investigator testified.

* Insurance agent Jill Morrill stole premiums from her agency’s clients for several years until the complaints started piling up. The Glens Falls, N.Y. woman who worked at Pro Vu Best Insurance had accepted cash for the premiums, keeping several thousand dollars for herself, officials charge. The agency contacted the police after receiving complaints from clients who were receiving suspension notices from the state DMV for having no vehicle insurance. Morrill had worked at Pro Vu for eight years.

* A worker said she hurt herself while helping a client at a Connecticut state-run training school for the mentally disabled. Lillian Torres began collecting workers comp money, but allegedly then took a parttime job with the City of Waterbury without telling her insurer. The Southbury woman faces up to 20 years if she can’t convince the court of her innocence.

CIVIL SUITS

* The U.S. Justice Department says it’s “highly interested” in taking control of a whistleblower lawsuit alleging seven insurers over-billed the federal flood-insurance program after Hurricane Katrina struck the Gulf region. The suit was brought by a public adjusting firm, and the feds are studying the allegations before deciding. Under the federal whistleblower law, the feds can opt to take over a suit brought by private individuals. The insurers strongly deny the allegations.

ETC.

* Known vehicle arsons in Columbus, Ohio are rising—possibly because more are being unearthed by two arson investigators who work vehicle fires fulltime. If the owner is involved, it’s usually insurance fraud and is the most common motive for vehicle arson, investigator Bobby Burton told the Columbus Dispatch this week. Increasingly, addicts dump and burn their vehicles. They’re trying collect insurance money to feed their habits by lying that someone stole their vehicles. The two investigators started work parttime but became fulltime this year after Columbus officials realized that the 202 vehicle fires unearthed in 2006 added up to $1.02 million in losses. Those figures had spiked from 140 fires and $616,000 in losses in 2005. The two investigators are housed in the Columbus fire department.

* Idaho’s insurance and arson crime taskforce has earned 10 felony convictions in its first full year of operation, the state AG said this week. The state also has filed, or plans to file, six more cases. The legislature has funded a fulltime deputy AG to chase down insurance crooks.

QUOTE OF THE WEEK

“Keeping law enforcement pressure on drivers who create phony claims is the best cost-containment action that Massachusetts can take.”

— Editorial in the Boston Globe this week that says the state doesn’t need to change its rate-setting system since anti-fraud efforts are lowering auto premiums. [See FraudBlog for details]

OTHER HEADLINES THIS WEEK

* Texas energy firm indicted for comp premium fraud
* Michigan businessmen accused of $2.5M premium fraud
* FBI mining fraud databases to search for terrorists
* Kentucky woman accused of stealing health benefits
* Miami-Dade couple arrested for $1 million Medicaid fraud

For details, click here.

MEETINGS & CONFERENCES

* July 23-24 — Advanced Fraud Investigation Seminar San Diego, CA (National Association of Insurance Commissioners)

* July 24 — Legal Issues in Health Care Fraud San Diego, CA (National Health Care Anti-Fraud Association)

* August 13-16 — Property Crimes Investigations Conference Las Vegas, NV (International Association of Property Crime Investigators)

* August 28 — Insurance Fraud Seminiar
Las Vegas, NV (Insurance Institute of Indiana, Indiana SIU, Indiana DOI)

* September 9-12 — Annual Seminar & Expo on Insurance Fraud Las Vegas, NV (International Association of Special Investigation Units)

* September 10-11 — 2007 Annual Meeting
Lisbon, Portugal (International Association of Insurance Fraud Agencies)

For more info, visit online events  .