Insurance Fraud Weekly ePort

Insurance Fraud Weekly ePort

Week ending June 1, 2007

http://www.InsuranceFraud.org

 

LEGISLATION & REGULATION

* The Maine Senate passed a bill creating a fraud unit in the insurance division. The House now is reviewing LD 713, but it’s unclear if the measure will pass before the legislature adjourns in late June. The bill is nearly identical to one that failed last year. The coalition’s Howard Goldblatt submitted written testimony to the Joint Insurance Committee urging passage of the legislation, and formally advised the committee in face-to-face meetings earlier this session.

* The Connecticut Senate has passed a bill giving vehicle owners control over the info in their vehicle’s event data recorders (or “black box”). SB 974 would require a court order or the owner’s permission for fraud fighters to access the data. Owner control is being positioned as a privacy issue.

* The California insurance commissioner has formed a blue-ribbon task force to study ways to reduce insurance fraud in the state and enhance the state’s ability to prevent, detect and prosecute fraud. The coalition will serve on the commission. Reducing fraud is vital to re-energizing California’s economy and restoring fairness for insurance consumers, Commissioner Steve Poizner said during the inaugural meeting yesterday. The task force will work to determine the severity of fraud by line of insurance, evaluate the effectiveness of the state’s fraud bureau, propose new legislation and develop a public-outreach plan. The task force includes a cross-section of fraud fighters from government and industry, and has one year to issue a report. The coalition is represented by executive director Dennis Jay.

* The NAIC’s anti-fraud task force meets this weekend in San Francisco. But instead of reviewing drafting of model auto-fraud legislation, the task force will discuss what are now being called guidelines. The NAIC is shifting from detailed models to more-general wording that provides legislators general concepts they can follow when drafting bills. On tap this weekend are draft NAIC guidelines clamping down on staged-accident runners, soliciting accident victims for treatment, and limiting outsider access to police accident reports.

Note: Texts of anti-fraud bills are available on the coalition’s website here http://www.insurancefraud.org/bills_intro.html

 

PUBLIC OUTREACH

Call it bird watching… a contemptuous schemer with a seemingly fake injury flips a defiant middle finger from the roadside billboard. The headline reads, “Thanks for the Holiday. After all you paid for it!” That ad promoting a fraud hotline is just one salvo from the Irish Insurance Federation, which says it’s helping lead an industry-wide fraud crackdown that’s lowered auto premiums 45 percent between 2003 and 2006. The hotline has received more than 3,000 leads from the public since 2003. More-aggressive prosecutions, continued promotion of the hotline, better fraud laws, beefed-up insurer investigations and other initiatives all are part of the omnibus swats at auto swindlers. Coalition board member Ken Jones of the Travelers brought the billboard to our attention after a recent vacation in Ireland. See the billboard at http://www.insurancefraud.org/birdWatching.html

 

CRIMINAL CONVICTIONS

* A Plainfield, N.J. police detective wrote two fake police accident reports to support crashes that he knew were staged or phantom. Samad Abdel was one of eight people allegedly involved with eight staged accidents that resulted in more than $117,800 in bogus collision-damage claims. Abdel’s cronies, including an auto body shop, supplied him with the fictitious crash info, and he filled out the reports. Abdel received a year of probation and was fined $5,000. John Smith, a police officer with the nearby Borough of Roselle, earlier this year pleaded guilty to creating false accident reports in the same scheme.

* A former Upstate New York doc billed 20 auto insurers more than $2 million for tests he never performed on accident victims. Juan Carlos Fischberg laundered the money through wire transfers to South America and Delaware. He pleaded guilty this week and faces up to five years in prison when sentenced.

* Hugo Salvador Argueta ran shell construction firms that provided fake workers comp policies to South Florida subcontractors who used the policies to obtain lucrative construction contracts. The shell firms Ortiz Construction Group and Mirada Construction received a percentage of the subcontractors’ payroll. The subcontractors also employed illegal workers, paying them under the table to avoid state-required workers comp premiums. Another crony greased the suspected scam by offering a check-cashing service for the workers. Adam Segan, who ran Pronto Cash, showed up with vans loaded with cash to pay the illegal workers. Segan pleaded guilty in federal court Tuesday and faces up to 20 years when sentenced in August. Argueta pleaded guilty earlier and will be sentenced in July.

* Maritha Hunter-Butler has lousy taste in hitmen. She tried to hire her cousin to kill her ex-husband so they could share the life-insurance money. The St. Louis-area woman was mad that Abdul Martin had missed support payments for their three kids. So Abdul had to go, and she’d make money in the process. She even offered to buy Willie a car to sweeten the deal. But cousin Willie Martin went to the cops instead. They wired him and recorded damning evidence, including one conversation in which she drove Martin to Abdul’s town and pointed out his house. Hunter-Butler rejected a 10-year plea deal this week, and will throw her fate to the court.

 

CRIMINAL CHARGES

* Dozens of suspects were rounded up in a sweeping bust of elaborate auto and workers comp schemes in California, officials announced this week. Several suspects made bogus claims for aftermarket car stereo equipment, custom wheels and tires and performance parts. An employee of an aftermarket parts store allegedly created a backdated receipt for car parts after an undercover investigator said a bogus insurance claim would be made for fake thefts of parts the investigator wanted to buy from the store. In another operation, 12 suspects had their vehicles torched and then told insurers they were stolen. Two businesses also robbed the state workers comp fund of $1.7 million in premiums by underreporting their payrolls and lying that employees performed safer jobs than they really did, officials allege. The operations were conducted in Fresno, Merced, Tulare, Kern and Kings Counties. One suspect taken into custody had $13,000 in cash in his pockets, according to DOI officials.

* Lora Mae Gamblin-Deering torched her Waterloo, Iowa house for insurance money, prosecutors charge. An arson dog found accelerants in the rubble. A crime lab also found an accelerant on the clothes Gamblin-Deering wore the night of the fire, officials allege. She claimed $25,000 in bogus losses in the fire, prosecutors say.

* Former corrections officer Dennis Gillan said he was hurt on the job so badly that he couldn’t walk more than a block, or even sit very long. The Monroe, N.Y. man collected more than $100,000 in workers comp money–until he was caught on tape hunting deer with a bow and arrow, and dragging deer carcasses from the woods, prosecutors charged this week.

* A Modesto, Calif. chiro bilked workers comp insurers out of millions for a controversial procedure that prosecutors this week say is illegal. Wilmer Origel created a sham clinic and management firm so he could falsely bill insurers, prosecutors say. He illegally installed doctors as figurehead owners even though he ran the operations himself, prosecutors allege. Origel’s billings were inflated, and included the controversial treatment called “manipulation under anesthesia.” An anesthesiologist sedated patients for pain relief and better motion, and Origel billed insurers $35,000-$40,000 apiece. He also billed for phantom procedures, including 85 sessions of infrared-heat therapy for one patient, prosecutors say. All told, Origel stole $6 million in insurance money, prosecutors allege.

* A couple stole $56 million in one of the largest Medicare scandals in South Florida history, the feds charge. Mabel and Abner Diaz allegedly created sham medical-equipment suppliers to bill Medicare for power wheelchairs, artificial limbs, oxygen concentrators and powered air mattresses. The equipment was never provided, the feds say. Many of their sham suppliers operated for only months, generally billing Medicare for $1 million-$2 million each and then folding before investigators closed in. Most of the stolen money has disappeared, the feds say.

* Colin Zieler was stabbed and slashed 41 times so his ex-girlfriend and her current boyfriend could scam a six-figure life-insurance policy, federal prosecutors in Orlando charge. Heizel Beatriz Gonzales-Martinez sold Colin Zieler a six-figure life policy from AIG, where she worked, just a week before his stabbing. She allegedly insisted he pay in cash to activate the coverage. Their two-year-old son was the beneficiary. She and current boyfriend Alejandro Ferrer ambushed Zieler outside of an Orlando-area apartment complex, officials say. Ferrer allegedly chased him throughout the complex with a foot-long knife. Ferrer was found with a bloody hand wound and claimed a dog had bitten him. He later changed his story and confessed, officials allege.

CIVIL SUITS

* A whistleblower lawsuit alleges that at least eight insurers overbilled the federal flood insurance program for Hurricane Katrina flood damage but underpaid for wind damage covered by their own policies. A group of former insurance adjusters say they reinspected 150 flood- and wind-damaged properties. In one example, the suit alleges insurers paid a group of four-plex apartments in eastern New Orleans with federal flood money even though the apartments weren’t flooded. But the insurers paid each building in that complex only a small amount for severe wind damage on their regular property policies, the suit alleges. The anonymous whistleblowers say they’ve found an average overpayment of 66 percent on federal flood policies, which are sold and administered by private insurers.

QUOTE OF THE WEEK

“We need to be bold and creative if we are to lessen the lure of insurance fraud.”

— California Insurance Commissioner Steve Poizner in announcing a blue-ribbon task force to study fraud and make recommendations on how to reduce it.

OTHER HEADLINES THIS WEEK

* Feds charge 22 in Texas; allege massive staged crash ring

* New York doctor charged with no-fault billing scheme

* S.C. man gets 440 years for murder-for-insurance scam

* Vermont man pleads guilty to helping friend fake fall

* Farmer in South Dakota pleads guilty to crop insurance fraud

Details at www.InsuranceFraud.org/

 

MEETINGS & CONFERENCES

* June 13-15, 2007 — Fraud Education Conference Orlando, FL (Florida Insurance Fraud Education Committee)

* June 19-22, 2007 — Health Care Fraud Schemes Scottsdale, AZ (National Healthcare Anti-Fraud Association)

* June 21, 2007 — Board and Membership Meeting Washington, DC (Coalition Against Insurance Fraud)

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

* 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 http://www.insurancefraud.org/events_set.html.