Insurance Fraud Weekly ePort: Week Ending March 14

Insurance Fraud Weekly ePort
March 14, 2008
www.insurancefraud.org
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LEGISLATION & REGULATION

* A bill in Mississippi (HB 754) requiring property-casualty insurers to pay a claim within 90 days appears to be going nowhere this year. A response to the crisis conditions following Hurricane Katrina, HB 754 wouldn’t have given insurers more time to investigate suspected frauds. But most of several insurance-related Katrina bills aren’t expected to move this year in Mississippi.

* Two fraud bills in New Hampshire are expected to pass in their originating chambers within the next few days. SB 500 would add application fraud to the fraud warning that insurers must print on claim forms and other documents. HB 1578 would allow the state to fine an insurer up to $2,500 for failing to report suspected frauds to the insurance department.

* West Virginia has passed a law effectively banning stranger-oriented life insurance policies—also called STOLIS. The governor signed SB 704 yesterday over the strong objections of the Life Insurance Settlement Association (LISA). In STOLI transactions, investors encourage seniors to buy life policies solely to sell them the death benefits. The investor collects the benefits once the senior dies, but consumers can mislead insurers about their intent in buying the policies. However, the measure also would interfere with legitimate life-settlement transactions: “the rights of all policyholders are…hampered for the sole purpose of preventing the dishonest conduct of a few,” Doug Head, executive director of LISA, says in a written statement.

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

PUBLIC OUTREACH

* Charles Keith Phillips pushed his wife’s minivan off a cliff then lied to his insurer that someone had stolen it. When fingered by police, Phillips wanted to have a crony he thought was an informant beaten up. But he “blundered ahead in a fog. Phillips was wrong about the snitch, and spilled the revenge plot to the real informant—his own buddy,” the coalition recounts in its newest online Fraud of the Month feature. “Then Phillips blabbed again, this time to a police trooper posing as the hitman. Played like a violin by law enforcement, Phillips fell fast.”

CRIMINAL CONVICTIONS

* Lorinda Sutton torched her home for $198,000 in insurance money because she was fed up with mold and other problems. The Hanover, Ohio woman left a stove burner unattended after stacking paper towels and other combustibles on top. The blaze first seemed like an accident. State Farm paid to replace Sutton’s home, personal property and living expenses. Neighbors also donated clothing, food and gift cards. But Smith later admitted she’d torched the place herself, moving personal items into storage before setting the fire. This was a good time to get help from the hit TV program, “Extreme Makeover. Home Edition,” Sutton had joked with her husband before the fire. The court wasn’t amused, and slapped Smith with three years in prison.

* An Arizona claims adjuster inflated 120 injury claims from real auto accidents to steal nearly $587,000 from Western Agricultural Farm Bureau Mutual. Piggybacking on legitimate crash claims, Joel John Jalovec, who was the insurer’s employee, submitted forged chiro and other medical bills for crash victims he invented. Sometimes the doctors didn’t exist, either. The Scottsdale man then intercepted the claim checks in his office or had them mailed to his own mailbox. His scheme was busted when an alert secretary at Western Agricultural noticed the same bills in too many claims Jalovec submitted. The Arizona insurance department’s fraud bureau and Western Agricultural then launched a year-long joint investigation that led to Jalovec’s arrest and conviction. He received six months in county jail, and must repay the stolen money

* Hiding the evidence wasn’t Daniel Turocy’s strong point as an insurance thief. The Norwalk, Conn. man told his insurer that someone stole his 2005 Cadillac. But police easily figured out he’d had the Caddy torched for insurance money. Turocy’s crony left a burned-up gas can in plain view on the front passenger seat. An arson dog also found gas sprinkled inside the charred Caddy, and Turocy was several thousand dollars behind in car payments. He paid the crony $2,000 to burn the vehicle. Turocy will be sentenced later.

* Police officer Matthew Shade bilked his estranged wife by forging her name to more than $5,000 in insurance checks and pocketing the money. The Falls, Pa. couple was divorcing when he stole the checks for storm damage to their home. Shade is on administrative leave without pay from the Falls police department. He’ll be sentenced later.

* Bryan Rose said he injured his back while working for UPS, and started collecting workers comp money. But investigators caught the Sacramento-area man playing Wiffle ball, coaching football teams, officiating baseball games, and lifting objects such as a heavy laundry basket. Rose received five years of probation Wednesday, and must repay $20,000.

* Brian Phillips made an unsafe decision: While receiving disability benefits from the City of Visalia, Calif. he worked off the books for his in-laws at the Visalia Safe Company. During a routine visit to the doctor, Phillips wore his work clothes. That didn’t sit well, and Phillips was reported. Investigators tailed Phillips and found that, indeed, he was working while collecting comp money. He received four years of probation this week.

* Clinical social worker Tammy Smith stole hundreds of thousands of dollars from Medicaid with thousands of bogus claims that defied logic. The Baltimore-area woman billed for: treatments on several days when she was a hospital inpatient…nine months of therapy for a patient she never saw and who was in the hospital at the time…42 hours of service on one day…more than 24 hours of treatment 27 times…and for thousands of 75-minute therapy sessions that weren’t performed or lasted only 20 to 30 minutes. Smith also ordered employees to forge documents to inflate her billing rate. Smith billed Medicaid $900,000 over three years, but couldn’t document at least $700,000 in services. She faces up to 15 years for each of nine counts; sentencing date still is being scheduled.

CRIMINAL CHARGES

* A gang of doctors used rental cars to stage crashes and steal more than $6.2 million of insurance money for treating fake injuries in a medical mill, New York City prosecutors charged Tuesday. Three docs, a chiro and two acupuncturists were among 11 people busted. The suspected gang used Enterprise rental cars for the setup crashes because members didn’t want to mess up their own cars, prosecutors say. Nobody was injured, but the gang obtained police reports to legitimize the crashes to insurers. The gang also monitored police scanners to recruit real accident victims and inflate minor injuries. The fake and real crash victims received useless biofeedback, electrocardiograms and MRI tests from a bogus medical clinic in Manhattan. The patients received about $200 each, and the recruiters who staged the crashes received about $2,000 each, prosecutors charge. One runner even forced another at gunpoint to stage crashes, officials say. The alleged ringleader is Gregory Vinarsky, a layman. He pocketed $3.5 million of the insurance loot for himself, and laundered the money through four straw firms he created, prosecutors say.

* A Brooklyn family registered 14 vehicles to one address in the Poconos Mountains of Pennsylvania to illegally reduce their auto premiums, prosecutors charge. Benito Berrios Jr. is a Brooklyn electrician with a weekend home in the Poconos, where auto premiums are much lower. But several members of the Berrios family allegedly stored and used most of the 14 vehicles in New York City despite telling their auto insurers the vehicles were registered in the mountains. Two vehicles were commercial vans used to transport school children in New York City, prosecutors allege. But Berrios Sr. told his son’s insurance agent the vans were used only to drive relatives to and from New York City, prosecutors allege. Berrios Jr. says he didn’t know so many family members had used his Pocono address. He’s actually the hub of the suspected conspiracy, prosecutors counter.

* A State Farm auto claims rep stole more than $42,000 from the insurer, New Jersey prosecutors charged this week. Crystal Shaw allegedly falsified claims information to issue fraudulent claims checks to a fictitious person named Darrin Shefton. The Plainfield woman faces a variety of charges. She’s being prosecuted by the state’s Office of Insurance Fraud Prosecutor.

* The real estate wasn’t greener on the other side. Alexander Bourdaniotis became a licensed real estate agent despite claiming he was too injured to work after an inmate attacked him at the youth correctional facility where he worked. The Sacramento-area man received more than $150,000 in workers comp benefits. Bourdaniotis told doctors he was hurt so badly that he couldn’t drive home anymore, yet drove his truck 40 miles home the day he was hurt. He also began working as a real estate agent and contractor while collecting disability money, officials allege. Bourdaniotis faces up to 30 years in state prison if convicted.

* Dentist Amy Masri practiced dentistry without a license for a year despite losing her credentials for allegedly bilking the Fort Lauderdale, Fla. police department’s health trust fund with bogus claims, prosecutors charged this week. The Pompano Beach woman was arrested in February 2007 for allegedly billing more than $18,000 in false claims to the Fraternal Order of Police Lodge 31 health fund. Among other things, Masri allegedly billed for dental work on herself, using her maiden name for some procedures. She also allegedly billed for working on children. The state suspended her license after her arrest. But a detective paid a surprise visit to Masri’s office recently, and allegedly heard her discuss implants with a patient.

* Pamela Carrasquillo had 500,000 reasons to off her husband Herminio, New York prosecutors charge. The Avon woman allegedly shot her husband four times while he slept so she could collect on his $500,000 life policy. Carrasquillo had asked Herminio if she still was the policy beneficiary just two days before he was shot. Police also found gunshot residue on her hand after the shooting. Herminio survived the assault. The bleeding man call police to report someone had put four bullets into his chest, leg and arm. He said he thought Pamela had done the deed, but admitted he didn’t see the shooter.

COURT DECISIONS

* A claimant who lied on his job application that he had no prior back injuries can’t recover workers comp benefits for a back injury he later suffered on the job, the North Carolina Court of Appeals has ruled. This marks the first time a North Carolina appellate court recognized lying as a defense in a comp action. Randy Freeman’s lying about his physical condition meant there was no employment contract, and Freeman thus lacked standing to seek comp money. Freeman didn’t report earlier job-related back injuries on the medical history questionnaire when later applying to be a truck driver with J.L. Rothrock.

ETC.

* Insurance and healthcare-related arrests in New York grew 17 percent last year over 2006, the insurance department says in a newly released report. Some 149 people also were arrested for workers comp fraud in 2007, including 89 for collecting benefits while secretly working second jobs. The state fraud unit also opened 1,072 new cases.

* Former insurer exec Joe Wehrle is the new chief operating officer of the National Insurance Crime Bureau. Wehrle previously was head of USAA’s property-casualty group, and commander of the Third Air Force, United Kingdom. He retired from the Air Force in 2003. “General Wehrle’s experience will be needed as NICB seeks to beef up operations and have a greater impact on fraud committed against property & casualty insurers,” the coalition’s Dennis Jay writes in his FraudBlog. “We look forward to working with him to take fraud fighting to the next level.” Joe joins NICB on April 17.

QUOTE OF THE WEEK

“Clearly, this is an individual who should not be in the law enforcement profession.”

—Chief Deputy District Attorney Anthony Cappuccio, on former Falls, Pa. police officer Matthew Shade who forged his estranged wife’s name to insurance checks.

OTHER HEADLINES THIS WEEK

* Mass. judge to fraudster: pay restitution or go to jail
* N.J. comp claimant pleads guilty to having side job
* N.C. funeral director guilty of stealing premiums
* 90 days in jail for Calif. doc who lied about cancer

Details here.

MEETINGS & CONFERENCES

* March 18 — Increasing Productivity and Operational Efficiency Boston, MA (LexisNexis)

* March 19 — Increasing Productivity and Operational Efficiency New York, NY (LexisNexis)

* April 1-2 — Insurance Fraud Training Seminar Orlando, FL (National Association of Insurance Commissioners)

* April 14-17 — NICB Mega Special Investigations Academy Clearwater, FL (NICB)

* May 7-8 — VA Chapter IASIU Annual Meeting Richmond, VA (The Virginia Chapter of the International Association of SIU)

For more info, visit online events.

 

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