Insurance Fraud Weekly ePort: Week Ending March 28

Mar 28, 2008

 

Insurance Fraud Weekly ePort
Week Ending March 28, 2008
www.InsuranceFraud.org

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LEGISLATION & REGULATION

  • A New Jersey bill would invite more fraud by watering down limits on self-referrals medical providers make to surgical centers in which they have an ownership interest. Current law restricts providers from referring patients to their own clinics (unless grandfathered in when the law passed). But SB 787 would allow more self-referrals, thus increasing the potential for insurance scams. Passage also would have a chilling effect on insurer lawsuits against surgical centers owned by providers.
  • Oklahoma is debating permanently banning anyone from the insurance industry when convicted of crimes of dishonesty or breach of trust. The ban would apply to insurance and non-insurance personnel. The insurance commissioner could grant a waiver, however. SB 2122 mirrors federal “1033” restrictions. The bill has passed the state Senate, and the House is expected to open discussions shortly. Placing banning power in the state’s hands would allow Oklahoma to move faster in prosecuting insider fraud than waiting for the feds to act.
  • Forging insurance cards and knowingly possessing them would be specific crimes under a bill the New York Senate passed unanimously this week. The Assembly next takes up SB 644. In part, the effort targets rings that forge auto-insurance cards so illegal immigrants can fraudulently register their vehicles with the state.
  • Creating and distributing phony insurance cards also would be specific crimes of insurance fraud under a prefiled bill (HB 333) that will be debated when the Louisiana legislature opens next week. The bill was initiated by the fraud unit of the State Police.

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

CRIMINAL CONVICTIONS

  • John Belcher was hurt at a Lewiston, Idaho jobsite, and received a $70,000 settlement after saying he was confined to a wheelchair. Then he wanted the state to pay his wife $50,000 a year to care for him at home. Belcher whimpered in pain and needed help from his wife just to stand while giving a court deposition. But surveillance video caught him doing yard work, washing car windows and even putting up a Christmas tree. The couple pleaded guilty and must pay $10,000. No word on jail sentence, if any.
  • Dylan Demoss claimed he hurt his knee while lugging beer into an Auburn Calif. supermarket as an employee for a beer distributor. The Sacramento man received comp benefits and medical treatment, but he’d actually damaged the knee while playing basketball with friends. Demoss pleaded no contest Tuesday, received 60 days in county jail and must repay $4,000.

CRIMINAL CHARGES

  • Garrett Dalton should take lessons in dressing for success. In fact, a dress has gotten him into fraud trouble. The New Haven, Conn.-area man said he injured his back while lifting a box of toilet paper and soap at a correctional facility where he worked. Dalton said he couldn’t work, and collected more than $5,000 in workers comp money. But Dalton also ran a 40-yard dash in a woman’s dress and high heels while carrying an egg on a spoon during a local radio station’s contest for Hannah Montana concert tickets, prosecutors said this week. Dalton was busted when a supervisor saw his photo in a local newspaper. He faces up to 20 years if convicted. See Dalton in action at FraudBlog.
  • James Curcio may have created a new psychological disorder: Shopping-cart rage. The Poughquag, N.Y. man sought lost-wage benefits from his auto insurer after lying he was hurt in an auto accident, prosecutors said this week. But Curcio actually was unemployed. He’d lost his job as a cook after being jailed for ramming an elderly woman with a shopping cart in a grocery-store checkout line, prosecutors say. Annoyed that she took so long to pay for her groceries, Curcio allegedly rammed her twice and then fled with the cart and $85 of groceries without paying, prosecutors allege. It’s unclear if he ever was in an auto crash. Curcio faces up to seven years if convicted.
  • Teresa Dickerson Releford torched her sister’s mobile home for insurance money, Georgia prosecutors said this week. Releford rented space in sister Walter Mae Powell’s home in Bulloch County, where she kept special-needs kids. But Releford lost that business and got behind in bills, including rent. Even so, Releford kept paying her renter’s insurance premiums, officials say. She then allegedly set the place on fire. Investigators found charred pine straw stuffed in a cupboard, and behind the washer and dryer. A flammable liquid had set the straw afire, and there were pour patterns, prosecutors also allege. Powell allegedly was part of the suspcted scheme as well. She was arrested two weeks ago. Powell had taken out four policies on the place, and fraudulently tried to collect on each policy, prosecutors allege.
  • Insurance agent Patricia Hicks Huggins stole premiums of numerous clients without buying them coverage, South Carolina prosecutors charged this week. The DMV started telling the Garden City woman’s clients that their driver licenses faced suspension for failure to have auto coverage. The worried clients contacted their insurers, who said the Huggins hadn’t bought them auto coverage. Some clients contacted Huggins, who quickly issued policies to avoid suspension. Some clients allegedly had run-ins with Huggins several times over license suspensions.
  • Nice engagement ring, but too bad it doesn’t exist, Illinois prosecutors say. Thomas E. Skolar told State Farm that a 1.74-carat diamond-and-platinum ring was lost during a move. The ring was insured for $11,000 and the Naperville man presented an appraisal from New York jeweler Zell & Sons. Except for one problem: The appraisal was forged and the ring doesn’t exist, prosecutors say. Skolar faces up to 27 years if convicted.
  • A simple DMV search earned John Wesley Baum a fraud charge. The Elizabeth City, N.C. man claimed someone stole his Kywco scooter. He filed a police theft report and collected $4,000 from his insurer. But Baum actually had given the scooter to a buddy. The DMV easily found out by checking vehicle records and discovering Baum’s crony had registered the supposedly stolen scooter. The North Carolina insurance department led the investigation.
  • Divorce may cost former police officer Thomas Vance Crow more than he ever imagined. The former Horsham, Pa. cop told State Farm his Toshiba laptop, Nikon camera and a Panasonic video camera were stolen from his parked car at a local mall. The insurer paid up more than $2,000. Crow also was going through a divorce at the time. His estranged wife found a laptop in a toolbox in their garage while cleaning out their former home. The serial number differed by only one digit from the number on the supposedly stolen one. Nor was the number for the stolen laptop a legitimate Toshiba number, prosecutors alleged yesterday. Crow’s wife also says she has the cameras he said were taken.

CIVIL & ADMINISTRATIVE SUITS

  • A Nevada chiro, his wife and a medical doctor billed Allstate for phantom treatment of alleged crash victims, the insurer says in a federal lawsuit. Named are chiro Obteen Nassiri, Jennifer Nassiri and Dr. Albert Noorda, who work out of clinics in Las Vegas. The insurer paid out more than $75,000, and many of the claimed crash injuries never even happened, Allstate says. Obteen Nassiri’s medical reports “were filled with verbatim descriptions and identical statements, regardless of the circumstances of the accident, or the age and physical condition of the claimant,” Allstate says. Nassiri said he saw one client the day of a claimed crash. The client had problems sleeping, Nassiri’s report said—but the exam happened before client even had had a chance to sleep, Allstate alleges.
  • A federal lawsuit accuses Louisiana Citizens Property Insurance of paying thousands in undocumented expenses to firms not under contract after hurricanes Katrina and Rita. The suit also alleges the insurer didn’t keep proper records, and that execs spent lavishly on personal expenses. The lawsuit was filed by two Citizens policyholders, and relies on a report by a legislative auditor. Citizens is the state-sponsored home and business insurer of last resort for Louisiana.

ETC.

  • Two people suspected of helping stage car crashes screwed up when they couldn’t keep their stories straight, Massachusetts officials say. Nelly Baez Hernandez and Frank Joga claimed they were hurt as passengers in a 1992 Honda Accord that hit another car in Lawrence nearly five years ago. The day of the crash was cold and rainy, and no airbags deployed, fraud suspect Hernandez told Amica Insurance. But it was summer, the car windows were open and the crash was severe enough to knock him out and deploy the airbags, Frank Joga told Amica. The pair couldn’t even agree on what time the so-called crash happened, where they were going or what they did afterward, police say. Apparently Hernandez and Joga didn’t square their stories because they figured Amica would pay up without much hassle, Lawrence police chief John Romero told reporters. But the pair didn’t count on getting swept up in a massive crackdown on crash rings in Lawrence. They’re still at large, but the Honda’s driver allegedly confessed the crash was bogus.
  • Scouring canals for vehicles the owners have dumped for insurance money, South Florida divers found human bones inside a corroded van submerged for more than 30 years. Divers for the Broward Sheriff’s office spotted the bones Wednesday, and the discovery could solve a missing-person case from the mid 1970s. The canal near Coral Springs is a popular graveyard for owner giveups. Helicopters troll for sunken vehicles when the canal waters are calm. Investigators spotted about 70 vehicles in the latest insurance sweep. State Farm is the most-common insurer victim, and owners usually trip themselves up by leaving the keys in the ignition, officials say. Conviction can mean five years in jail, though the statute of limitation is eight years. Officials also are charging insurance-fraud suspects with damaging the environment, because many vehicles leak gas, motor oil and anti-freeze.
  • A restaurant owner bought useless health coverage for his employees, the Connecticut insurance department says. Ed Moustafa owns two eateries in the Hartford area. He received a fax from the Consolidated Workers Association, and signed up for what he thought was a group health plan. But Moustafa couldn’t find any online info about the outfit, then noticed two withdrawals totaling more than $800 from his bank account. Consolidated Workers isn’t licensed in Connecticut, the insurance department told Channel 13 news. The firm only is a medical discount plan. Enrollees are promised discounts on medical services they pay from their own pockets. It’s unclear if Consolidated Workers is charged with wrongdoing.
  • Keri Kish has been named Antifraud Counsel of the National Association of Insurance Commissioners (NAIC). She’ll support the NAIC’s Antifraud Task Force and its working groups. Kish also will be the NAIC’s main insurance-fraud liaison with local, state, federal and international law enforcement. The new position, formerly called Antifraud Coordinator, will be housed in the NAIC’s legal department. Kish came to the NAIC staff in February 2006. Prior, she was an attorney for the Kansas insurance department. The coalition wishes Keri well in her new role.

QUOTE OF THE WEEK

“Being branded a cheat is shameful enough. But having your photo in drag plastered about? That ought to send a signal that cheating workers comp just isn’t worth it.”

—Dennis Jay, coalition executive director, blogging about accused workers comp cheater Garrett Dalton, who was caught running in a dress after claiming an injury prevented him from working.

OTHER HEADLINES THIS WEEK

  • Mass. man arrested for faking theft of minivan
  • Three more charged in massive Indiana arson ring
  • Mass. comp claimant accused of having two side jobs
  • West Virginia worker pleads guilty to comp fraud
  • Prosecutor opts not to retry accquited chiro in St. Louis

Details at www.InsuranceFraud.org

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