Insurance Fraud Weekly ePort: Week Ending April 18

Apr 21, 2008

Insurance Fraud Weekly ePort
Week Ending April 18, 2008
http://www.InsuranceFraud.org

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LEGISLATION & REGULATION

  • The Minnesota legislature approved a bill to protect victims of auto accidents from medical providers who solicit the victims for bogus treatment. Under Senate File 2765, medical providers couldn’t contact crash victims face to face, via email or by telephone unless the crash victim voluntarily initiates the contact. Providers only could use ads such as billboards or mail flyers, and the ads must be clearly labeled as such. The governor is expected to sign the bill.
  • The Iowa legislature has passed a bill expanding the state’s mandatory-reporting law. Current law requires insurers only to report suspected bogus claims to the fraud bureau. Under House File 2555, insurers also would report schemes involving insurance applications. This provision was a part of a comprehensive insurance reform package. The governor is expected to sign the measure.
  • The California legislature is considering extending the assessment auto insurers pay to help fund a variety of anti-fraud efforts. The current assessment on auto policies written in the state is scheduled to sunset in 2010, but AB 2143 would extend the assessment to 2018. Insurers don’t oppose the extension, but do want to see some proof that the funded anti-fraud programs actually are working. In other words, is their money being put to good use? The bill is similar to a draft report by the insurance commissioner’s anti-fraud task.

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

PUBLIC OUTREACH

  • “Television (and movies) does influence the human mind. That’s why companies spend billions of dollars each year on TV advertising,” the coalition’s Dennis Jay says in his popular FraudBlog. “But television is not the only small screen that leaves impressions on people. The computer and video games affect us as well. It’s disturbing that Saints Row, an insurance fraud action game, now has a sequel featuring even more devious scams. The fraud-fighting community is not winning the battle for the hearts and minds of the American consumer: Consider the high tolerance for fraud and the low public opinion of insurers. Video games and the like make our job that much tougher.”

CRIMINAL CONVICTIONS

  • Two seniors were convicted of killing two homeless men for $2.8 million in life insurance. Olga Rutterschmidt (age 75) and Helen Golay (age 77) housed street people Kenneth McDavid and Paul Vados in Los Angeles apartments for two years, secretly took out life policies in their names, forged their signatures and then had cars run them down in dark alleys. Three surveillance cameras caught a silver station wagon turning into an alley the night McDavid was found dead there. Someone using Golay’s auto club membership had the vehicle towed around the time he was killed. Authorities later found McDavid’s DNA on the undercarriage. Golay was convicted of murder on Wednesday. Rutterschmidt was convicted of murdering McDavid yesterday, and the jury still is debating her role in Vados’ death. Both women face potential life without parole.
  • A news photo finished off Mark Vrilo. The former Portland, Ore. firefighter said he hurt his back during a training exercise just four months into his firefighting career. Vrilo left work and began collecting disability money, but an off-duty car crash actually caused most of his back problems. His scheme was busted when The Oregonian newspaper photographed him carrying an Iraqi soldier on a stretcher as a medic in Iraq. He received two months in prison and must repay $40,000. Interestingly, prosecutor Dennis Shen, who won the conviction, last fall received an award for contributions to fraud fighting from the Oregon chapter of the International Association of Special Investigation Units.
  • Meddie Dunlap dodged a fast-moving legal bullet, sort of. The Kanawha County, W.Va. man filed a damage claim with Erie Insurance for his banged-up camper. But it turns out another insurer already had paid for the damages about four months earlier. Dunlap received only a $500 fine, however. Poor health, lack of a criminal record and no payout on the claim were the court’s reasons for lenience.
  • Cynthia Sommer is free. She was convicted last year of poisoning her Marine husband in San Diego for $250,000 in life-insurance money she used for breast enhancements and to pursue a more luxurious lifestyle. But her conviction was overturned yesterday because husband Todd’s tissue samples were contaminated. The liver samples that helped convict Sommer showed unnaturally high arsenic levels. But previously untested samples showed no arsenic in her retrial.

CRIMINAL CHARGES

  • Insurance agent Willie Coachman Sr. is selling fake auto insurance to drivers seeking discounted coverage, Florida’s Department of Financial Services says. The Tampa-area man posts flyers in laundromats, on telephone poles and other public places with heavy foot traffic. People call the listed phone number and meet Coachman at a run-down trailer. He allegedly gives people fake insurance affidavits and insurance cards. Most buyers know the documents are fake and are useful only for registering their vehicles or if they’re stopped by cops, department officials say. But Willis Bowick claims he shelled out just $100 for what he thought was a real six-month policy. Later he was surprised when the state suspended his driver license for failure to carry auto coverage. Police still are looking for Coachman.
  • A Cedar Rapids, Iowa landlord lied during a lawsuit by an insurer that accused him of filing claims for roof repairs he never made after a hailstorm, prosecutors charge. A federal jury had ordered Robert Miell to pay American Family $1.5 million after the insurer had sued over the scam, which also landed him a criminal fraud conviction. Now Miell faces more criminal charges for allegedly lying during the civil suit. He said American Mutual had sent the insurance checks to his agent. In fact, the checks went straight to his office, prosecutors say. Miell also faces tax charges for failing to report the money he received from American Family. He owns more than 1,000 rental units worth about $80 million.
  • An employee of a towing service created $11,000 in fake invoices for towing and rental expenses for one of the service’s tractors that was wrecked in a head-on, Massachusetts officials said this week. Martineau’s Towing Service used its own vehicle to haul away its damaged tractor and a replacement tractor to transport the trailer to its destination, the towing company allegedly claimed in invoices submitted to Plymouth Rock Assurance. The Martineau’s employee asked a friend to print up fake towing invoices, officials say.
  • Dr. Larry Adams sees new charges every time he blinks. The State College, Pa. man already faces dozens of charges of illegally prescribing narcotics to addicts in return for cash. Now two new addicts have stepped forward. An injured construction worker says he’d travel to other states to pick up cars for Adams in return for money and OxyContin prescriptions up to twice a week. Another man injured in a motorcycle crash alleges he’d simply walk in to Adams’ treatment room, then Adams would ask him what drugs he wanted and write prescriptions. Bogus insurance claims finance many illegal narcotic prescriptions, warns Prescription for Peril, a recent report by the coalition.
  • Mariela Rodriguez and Aisa Perera created a fake HIV clinic in Miami that illegally billed Medicare more than $11 million, the feds charged this week. The receptionist at St. Jude Rehab Center was installed as president, prosecutors say. Rodriguez and Perera also hired Dr. Ana Alvarez, who has no HIV experience. Alvarez then allegedly ordered useless tests, signed medical analyses and diagnoses and authorized treatments that had no medical value. The clinic also paid HIV patients $100 to $150 to sign logs stating they’d received treatment when in fact they hadn’t, the feds allege. Rodriguez and Perera each faces up to 35 years if convicted. Alvarez faces up to 30 years.
  • An Australian woman faked terminal cancer to rip off insurers and steal money from sympathetic citizens and charities, prosecutors say. Angela Walsh allegedly shaved her eyebrows and wore a headscarf to mimic chemo treatment while staying free at a Melbourne apartment, officials say. Walsh also sought insurance money and launched a community fundraising campaign, telling a newspaper she needed money to try expensive new treatments, prosecutors allege. Walsh said how much she would miss her one-year-old daughter if she died, and the article appealed for donations. She received $9,000 in just one day from the article and appeals by a radio station. Walsh’s publicity, however, led to her arrest. Someone who read the article called the newspaper to question her claims.

CIVIL & ADMINISTRATIVE ACTIONS

  • California is reviewing thousands of health policies that insurers cancelled over the last four years. Insurers say rescissions are an essential anti-fraud measure, and that insurers are working to make the cancellation process more transparent. Critics says insurers look for ways to get rid of honest policyholders after they start making large claims. The state says it already plans to order Anthem Blue Cross, Kaiser Permanente and Blue Shield to immediately reinstate 26 cancellations.

ETC.

  • Some drivers are printing their own fake insurance cards in the Charleston, W.Va. area to avoid getting caught without coverage. Tough economic times are prompting more people to use fake cards, officials say. Large fraud rings aren’t mass-printing the cards. Rather, individuals are taking spontaneous and independent action, the state’s insurance fraud chief Gary Griffith told a local TV station. People figure out how to print the cards, then print up a few more and sell them to friends, Griffith says. One sign of a bogus insurance card is when the print starts fading, police say. Chris Bailes says he was hit by a drunk driver who allegedly showed him a fake insurance card with an expired policy number of an in-law. The driver also had printed a fake insurance certificate, Bailes says. Bailes’ car was declared totaled, but the adjuster paid $3,300 less than he owed, leaving him on the hook for he rest, he says.
  • Almost half of Brits place insurance fraud on a moral par with stealing a chocolate bar, even though 98 percent of Brits think they’re honest people, says research by Insurance.co.uk says. More than one of four Brits admit they lie on their auto-insurance applications to lower their premiums, says the survey. The lies range from lying that they keep their vehicle in a secure area to lowballing their mileage to fibbing about their address.

QUOTE OF THE WEEK

“When they got here, they went about recruiting runners — people who staged accidents in order to gain clients.”

—Essex Assistant District Attorney James Gubitose, commenting on three New Jersey chiropractors who admitted bilking insurers with fake injury claims.

OTHER HEADLINES THIS WEEK

  • R.I. doctor charged with $3M fraud and drug scam
  • Feds indict medical supplier in Ohio for bogus billing
  • Indiana woman charged in arson-for-profit ring
  • Missouri group-home owner charged with health fraud
  • 3 NJ chiros get jailtime in Mass. for staging car crashes

Details at www.InsuranceFraud.org

MEETINGS & CONFERENCES

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Should you have any questions or comments, please do not hesitate to contact this office.

 

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