Insurance Fraud Weekly ePort: Week Ending November 2, 2007
Nov 4, 2007
Insurance Fraud Weekly ePort
Week Ending November 2, 2007
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LEGISLATION & REGULATION
* The Hawaii insurance department is working on a bill for 2008 to expand it fraud unit’s jurisdiction. The unit investigates only auto insurance fraud, but would probe all insurance scams except workers comp if the bill passes. Similar bills that included workers comp have failed for several years, so deleting that line may improve its chances in 2008.
Note: Texts of anti-fraud bills are available on the coalition’s website here.
PUBLIC OUTREACH
* New Jersey’s fraud fighters awarded a woman $3,750 for a hotline tip that led to the conviction of a dentist who was making bogus claims. The award was part of Insurance Fraud Awareness Month, sponsored by the state AG’s office. Some patients didn’t even have dental coverage on the dates Dr. Gary Reba said he treated them. He received a year in prison. The reward is the first granted by the Office of Insurance Fraud Prosecutor.
* Youthful sleuths played arson investigator for a morning when the Muscatine, Iowa fire department let local fourth-graders poke through the ruins of a burned-down house. The firefighters had tourched the abandoned house days earlier by lighting a cooking-oil fire on the stove to learn how such fires burn. Several students fingered the charred pan, cooking oil and French fries on the stove because this was the most severely burned area. The kids also questioned a fire captain, who pretended to be the homeowner trying to cover up the arson. He tried to blame a faulty toaster, but some kids noted that the toaster was unplugged.
CRIMINAL CONVICTIONS
* A plastic surgeon billed insurers $1 million for work he never did. Dr. Richard E. Coin said he treated a nine-year-old, for example, for “serious†and “deep†wounds from a dog bite. But emergency room records showed only a laceration on one finger and other routine punctures. The St. Louis-area doctor claimed he treated wounds that actually were nowhere near the boy’s actual wounds. Coin pleaded guilty Tuesday, and faces up to a year in federal prison when sentenced in January.
* Vincent DeVito’s auto-theft claim fell flat. The Newark, N.J.-area man claimed someone stole his 1996 Mercedes-Benz wagon from his workplace. The vehicle was found burning in an industrial area, and DeVito made a $44,000 insurance claim. But investigators soon were all over his claim. He said he’d left his car at his workplace because it had a flat tire. But when the car was found, all four tires were inflated, and the spare tire and jack were still in place. DeVito faces up to 180 days in prison when sentenced.
CRIMINAL CHARGES
* How strange that Willard Bush bought coverage just 10 days before his house burned down for the second time in four years, investigators thought. That’s one reason the Newport, Ohio man is charged with torching his place for insurance money. Bush was at a raccoon-hunting convention the night of the blaze. But Bush allegedly offered a former employee land and money to do the deed. Bush also was behind on his mortgage, and allegedly lied on his insurance application by saying he was up-to-date on his payments. Nor did he mention on the application that he’d collected $100,000 in insurance money for his previous home fire. Bush also made a claim for a slate pool table, but investigators found no traces of the table in the rubble. He also moved his dogs and their kennel several hundred feet from the home just before the blaze broke out, officials say. Bush faces up to 13 years if convicted.
* Helotes, Tex. police officer Christopher Holt said someone stole his motorcycle from a movie-theater parking lot in Live Oak. He made an insurance claim, but the chopper later was found on property owned by his friends Darrel and April Kolesar, prosecutors charged this week. An informant told investigators that the Kolesars were Holt’s buddies.
* The owners of Top Flight Insurance inflated the company’s assets to keep the ailing insurer afloat, Oklahoma prosecutors charge. Jimmy Warren Wolff and Rodney Alfred Williams routinely transferred money from another insurer they owned, TriUnion, prosecutors allege. Twice they transferred the funds the day before they filed financial reports required by the insurance department. Each time, they sent the money back to TriUnion the next day, officials say.
COURT DECISIONS
* Firing an employee right after he filed a bogus workers comp claim doesn’t raise issues of retaliation, a federal appeals court in Iowa has ruled. Zuhdija Napreljac was a maintenance worker at an Embassy Suites Hotel in Des Moines. He said he hurt his back when he slipped and fell on the hotel’s back stairs while picking up litter. But surveillance cameras showed no sign that Napreljac even was on the stairs that morning. He was suspended without pay, and soon was fired for signing a false accident report. He sued John Q. Hammons Hotels, Inc., alleging retaliatory discharge. But Napreljac never proved he was fired for engaging in protected activity, the federal appeals court ruled in upholding a lower-court decision [Napreljac v. John Q. Hammons Hotels Inc., No. 06-4038 (8th Cir.)].
ADMINISTRATIVE & CIVIL ACTIONS
* James Grew will have to think about other career choices for the next two years. The New Hampshire attorney was suspended for two years Tuesday for lying that he was driving an insured vehicle when he rammed a parked car. The North Hampton man drove an uninsured vehicle during the crash, but told his insurer he was in a vehicle that was insured. Grew avoided paying nearly $2,000 in damages to the other driver. But the driver recorded the tag number and a description of the van that actually hit him. Grew pleaded guilty last year, and the state’s Supreme Court handed him the recent suspension.
* One of seven U.S. adults have been scammed, a year-long study by the Federal Trade Commission said Monday. That means 30.2 million people, or 13.5 percent of the population, were bilked. Nearly one of five African-Americans and Hispanics were fleeced. No word on how much insurance fraud was involved.
ETC.
* From our Koala Crackdown files: Raymond Junior Roebuck’s friend paid him $1,000 to torch her car for insurance money in Australia. But the plan was cursed: Roebuck picked up the car from a restaurant parking lot, and the vehicle soon got stuck on a dirt mound in a remote area. Unable to move it, he doused the interior with four liters of fuel, and reached inside to light the fire with a cigarette lighter. The car exploded, throwing Roebuck into the air and severely burning his arms and legs. He never got to use his money to pay off debts or have fun. Roebuck spent the whole stash on burn cream, and then was arrested. He pleaded guilty and faces up to seven years in prison when sentenced.
* California’s insurance department has created a task force to combat expected fraud stemming from the ongoing wildfires. The group will include fraud fighters from several state and local agencies, including the San Diego DA and state AG. The task force will launch stings, publicize busts and alert consumers on how to protect themselves. Unlicensed contractors will be one of the key targets. In separate news, anti-fraud action already is picking up in the burn zone. Two adjusters have been arrested for alleged insurance fraud. The insurance department also says it has received seven formal complaints about insurers and agents since the wildfires broke out more than a week ago.
* Her fraud conviction is the least of Alazia Lekenvish’s problems. The Omaha, Neb.-area woman also is dealing with overwhelming grief. Lekenvish ended up in jail after lying that someone stole her car so she could use the insurance money to buy Christmas presents for her kids. She never saw her daughter Alazia again. The 6-year-old was gunned down on the streets while Lekenvish was behind bars. “I feel hate towards myself. I should have been there, been with my daughter and protected her” she told Omaha’s CBS television affiliate. “She kept asking me, ‘Mom when do you get to come home?’ Soon, I’ll be home soon. ‘How many months you got?’ I don’t know. I’ll be home soon. She said, ‘Do you have a bond? I want to come get you.’ I said you can’t, you can’t. ‘I have $2.50. I could just come get you.’ I told her you can’t.”
* The coalition’s Executive Director Dennis Jay was named one of the 100 most powerful people in North America’s insurance industry. Co-sponsored by InsuranceBroadcasting.com and the Insurance Media Association, the list recognizes insurance executives who control “the most insurance industry resources (people, capital, intellectual knowledge, technology, etc.) or have the most influence on those resources.†The coalition is the only anti-fraud organization named to the list.
* The Seattle-area prosecutor’s office has created a division to tackle complex financial crimes such as insurance fraud. The King County unit will deal with cases that require specialized know-how. Until now, police and prosecutors have mostly gone after traditional violent crimes. The unit will pick up some of the slack left by the FBI, which is deploying more resources to counter-terrorism operations. The unit says it expects to handle about 1,000 cases a year. The new division replaces the county’s current fraud unit, and more than doubles the number of deputy prosecutors from eight to 18.
QUOTE OF THE WEEK
“You have to sort of follow the money trail.”
—Deputy Prosecutor Melinda Young, commenting on a case being handled by a new Seattle-area unit that takes on complex financial crimes such as insurance fraud.
OTHER HEADLINES THIS WEEK
* Two brothers accused of comp premium fraud in Ky.
* NYC doc indicted in billing scam against health plan
* Three arrested in California for comp premium fraud
* Four workers charged with comp fraud in Texas
* Ex-mayor in Michigan on trial for auto arson
To read details, click here.
MEETINGS & CONFERENCES
* November 8, 2007 — Worker’s Compensation Claimant Fraud Seminar Randolph, MA (Lombardo’s)
* December 4, 2007 — Annual Training Conference Anaheim, CA (National Health Care Anti-Fraud Association)
* December 11, 2007 — Annual Membership & Board Meeting Washington, DC (Hyatt Crystal City)
* May 7-8, 2008 — VA Chapter IASIU Annual Meeting Richmond, VA (Holiday Inn)
For more info, visit online events.
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