Insurance Fraud Weekly ePort

Insurance Fraud Weekly ePort
Week ending 20, 2007
www.insurancefraud.org 
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LEGISLATION & REGULATION

* The North Carolina Senate passed an amended version of a House bill requiring drivers to have greater proof of residency to register their vehicles. HB 729 also would make it a misdemeanor to deceive an insurer when applying for automobile insurance in order to obtain a policy that would’ve been denied. North Carolina has seen a large number of non-residents lying that they live in the state to get cheaper insurance than where they currently live. The House now must review the amended version.

* The NAIC is seeking public comment on its draft model law limiting outsider access to police accident reports. The move attempts to clamp down on cheaters who try to recruit crash victims to make fake injury claims. The model is available by clicking here. Send comments to Alan Haskins (ahaskins@naic.org) at the NAIC by August 30.

* The coalition’s government affairs committee meets in mid-August to discuss which states to target for anti-fraud legislation next year. If you have recommendations, contact the coalition’s Howard Goldblatt at howard@InsuranceFraud.org.

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

PUBLIC OUTREACH

* Adam Sandler’s latest movie, “I Now Pronounce You Chuck and Larry,” has gotten rotten reviews from movie critics—and an even sterner review from fraud critic Dennis Jay, the coalition’s executive director. He writes on the coalition’s blog <http://www.insurancefraud.org/blog/index.php> : “Sandler and Kevin James play two Brooklyn firefighters who pretend they’re gay to receive domestic-partner benefits, including insurance. Now, I don’t believe people are going to rush out of the theaters and commit fraud. But it does represent one more nail in the coffin of ethical behavior. The job of convincing ethically challenged people to make positive decisions becomes a bit tougher. Young people especially are on the receiving end of a deluge of messages in the popular media—including television and video games—that reinforces bad behavior—and there are so few voices countering those messages.”

* Insurance Fraud Awareness Week is well underway in South Carolina. It’s a joint project of several agencies, including the South Carolina Insurance News Service. The effort has earned statewide news coverage, including this editorial in Tuesday’s Times and Democrat (Orangeburg): “People will try to cheat insurance companies by filing false claims. They cost us all…While there are organized fraud rings throughout South Carolina, other people you wouldn’t suspect, such as a next-door neighbor, co-worker or close acquaintance, are also the causes of insurance fraud and increased insurance premiums…Stopping these insurance crimes stands to benefit all. Reporting fraud when you see it or suspect it is necessary.”

* South Carolina fraud fighters are circulating some daffy cases to the media as part of Fraud Awareness Week. Read it and weep, or laugh: One woman was in a crash. She presented medical bills for treating herself and her daughter. But the bill looked suspiciously like it came off a home computer. Investigators checked out the doctor’s listed address, and it was a trailer park…Another woman rear-ended a car driven by a man, and he sought insurance money for treating his supposed injuries. The pair denied knowing each other, but it turns out they were married.

CRIMINAL CONVICTIONS

* The sting stung. An FBI undercover agent received useless treatment from Westport, Conn. chiro Richard Fogel after claiming someone rear-ended his car on Interstate 95. Personal-injury lawyer Bruce Corrigan urged the unhurt agent to see Fogel, and agreed to a false letter saying the agent had missed work and lost wages. Corrigan settled the bogus injury claim with MetLife for $18,500. Fogel received three years of supervised release this week, and earlier had agreed to repay more than $1 million and surrender his chiro license. Corrigan was convicted earlier; no word on his sentence.  

* Misty Keller Witherspoon received life without parole this week for shooting her husband Quinn to use his life insurance money to pay off debts. The Mooresville, N.C. woman shot her husband, a police officer, as he slept on a couch. Witherspoon had secretly used her sister’s credit cards to ring up large debts, was afraid to tell her husband she’d gotten into so much trouble. She also hoped the life insurance would solve her financial woes. Witherspoon argued she actually was trying to kill herself, but the gun accidentally fired into Quinn’s head. The court wasn’t amused.

CRIMINAL CHARGES

* A klutzy gang of insurance arsonists couldn’t even get the address right. Niasha King hired four New Orleans-area knuckleheads to burn down her public housing apartment for $20,000 in insurance money, officials charged Tuesday. They allegedly set three fires over two days at the Reserve Oaks housing complex. But the arsonists allegedly first burned up an entire building—the wrong one. Unfazed, they tried again but destroyed the apartment next to King, prosecutors say. King finally wised up and hired another torch who could actually read her address correctly. Her unit finally went up in smoke, but officials are convinced she set up the whole plot.

* Jose Tinoco claimed someone stole his vehicle from a Wal-Mart parking lot in Sacramento. It was found burned that evening in the Lodi area. He told the Highway Patrol that he called his friend Fredy Diaz for a ride home after discovering the supposed theft, then made an insurance claim. But it turns out that both men were involved in the theft for insurance money, the insurance department alleged this week. The suspected plot is unraveling fast, because Tinoco and Diaz are fingering each other, the insurance department says.  Each faces up to five years if convicted.

* The owner of an auto body shop and three employees billed auto insurers for repairs they didn’t finish, and charged insurers for new parts but installed used ones, New Jersey prosecutors charged this week. The Hamilton-based shop Robert Christopher Associates also further damaged vehicles to hike their insurance billings, officials say. Owner Robert Buckingham allegedly told employees to repair a vehicle’s frame by welding, it but charged the insurer for a new frame.

* An industrial construction firm complained, and fraud investigators listened. Karabinchak Brothers, Inc. in Edison, N.J. paid agent Anthony M. Feliz of AMF Insurance Services $40,000 for insurance and another $30,000 for surety bonds. But Feliz took their money and never bought the coverage, prosecutors charge. Feliz may have bilked 17 other clients as well, officials say.

CRIMINAL INVESTIGATIONS

* Four of the top 10 firms that provide power scooters, wheelchairs, prosthetic limbs and other medical equipment to D.C. Medicaid patients are being investigated for possible fraud. The Doors of Hope Medical Supply received more than $225,000 from the D.C. government for power scooters. Investigators are probing whether the firm gave patients cheaper equipment but billed for the more-expensive scooters. Several other suppliers have disconnected their phones. One firm, Faith Hope Medical Supplies, has an address that’s actually a beauty shop, officials say.

CIVIL SUITS

* The Minnesota Workers’ Compensation Reinsurance Association and the Minnesota Workers’ Compensation Insurers Association sued AIG on Tuesday for allegedly underreporting premiums for 22 years. AIG agreed to pay Minnesota about $1.2 million as part of a larger $1.64-billion settlement last year, in part to pay back states for underreporting workers comp premiums. But the two groups contend the $1.2 million isn’t enough. They say they lost much more than $1.2 million from underpaid assessments, reinsurance premiums and investment income. They seek $100 million in the federal RICO suit.

ETC.

* The use of insurance fraud and other financial crimes to fund terrorism has grown worrisome enough that government investigators, prosecutors and insurance leaders are meeting later this month in San Diego to ramp up efforts to stanch the illicit money flow. A California tax preparer named Yakoob Habib, for example, bilked Medi-Cal out of $28 million and laundered much of the money to Pakistan, United Arab Emirates, Russia and Latvia. He also donated funds to a terrorist front group, and visited anti-American, weaponry and hazardous material training websites. Organized crime and terrorist groups across the nation are bilking government health and welfare programs out of as much as $150 billion a year, the Los Angeles Daily News concluded after a lengthy investigative series. Much of the money is laundered overseas for terrorist activities.

* Drivers in the New York assigned-risk plan, the state’s insurer of last resort, will get an overall 7-percent break in premiums. An estimated 130,000 drivers will receive lower premiums of nearly $20 million total. And guess why? Fraud fighters have saved so much money in combating auto insurance fraud, the state’s insurance superintendent says. A big part of the success, Mills says, stems from the willingness of district attorneys to prosecute no-fault fraud cases. The premium reductions take effect August 15 for new drivers, and October 1 for renewed policies.

* The FBI says it’s stepping up efforts to lean hard on healthcare fraudsters, pointing to 2,400 probes last year and promising a busy 2007. A federal Medicare taskforce recently landed its third conviction this year, nailing a Florida man whose pharmacies dolled out aerosol medicines that patients didn’t need. Medical supply firms also must reapply to be part of the Medicare program, and must certify they haven’t run afoul of the law.

* Con artists are claiming to sell coverage through Cover Tennessee, the new state-run health-insurance program, state officials warn. Schemers are exploiting the programs relative newness and complexity. The state has received several complaints from residents, and urges consumers to be wary of programs that don’t list the official phone number (1-866-268-3786) or website www.covertn.gov <http://www.covertn.gov/> .

QUOTE OF THE WEEK

“That will be $10 from each of you to pay for the groceries he stole.”

— Ron Williams, executive director of the Arizona Insurance Information Association, used this analogy to explain how we all pay for insurance scams.

OTHER HEADLINES THIS WEEK

* Georgia doc pleads guilty to $5 million billing scam
* Connecticut doc arrested for writing illegal prescriptions
* Indiana man admits to fraud in transporting patients
* Two W.V. men charged with car arson and fraud
* Mass. couple arraigned for false claim on barn collaspe

Details at www.InsuranceFraud.org/ <http://www.insurancefraud.org/news_set.html>

MEETINGS & CONFERENCES

* July 23-24, 2007 — Advanced Fraud Investigation Seminar San Diego, CA (National Association of Insurance Commissioners)

* July 24-25, 2007 — Legal Issues in Health Care Fraud Chicago, IL (National Health Care Anti-Fraud Association)

* July 26-27, 2007 — Best Provider Defenses in Health Care Fraud Cases and How to Combat Them Chicago, IL (National Health Care Anti-Fraud Association)

* September 9-12, 2007 — Annual Seminar & Expo on Insurance Fraud Las Vegas, NV (International Association of Special Investigation Units)

* September 10-11, 2007 — 2007 Annual Meeting Lisbon, Portugal (International Association of Insurance Fraud Agencies) For more info, visit online events .

For more info, visit online events.