Broward PIP Fraud Scam Leads to Four Arrests

Four Florida residents were arrested on April 1 for participating in a Broward County scheme to defraud insurance companies by filing false PIP claims.

The defendants filed eight claims concerning a Mercedes that belonged to one of them, according to a statement from the Florida Department of Financial Services, Division of Insurance Fraud.

Claims alleged that the Mercedes had been run off the road. It was ultimately determined that only one of the eight claims was lawfully made and that the other seven were filed in furtherance of the defendants’ scam.

According to the statement, the four individuals arrested are:

  • Ermes Falero, Boca Raton
  • Gary Lee, Boca Raton
  • Javier Navarro, Miami
  • Michael Rumain, Point Pleasant

Falero, with Lee’s help, is alleged to have organized a scheme by which he and Lee would falsify documentation and use that false documentation to file fraudulent insurance claims. The remaining two defendants are accused of making fraudulent statements supporting Falero’s and Lee’s false insurance claims.

Falero, the scam’s main organizer, faces 150 years in prison. Lee faces up to 90 years, and the defendants who made the false statements each face 15 years in prison.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

Tampa PIP Fraud Investigation Results in Seven Arrests

An office manager who acted as a patient broker as well as her six patient recruits were recently arrested on insurance fraud charges by the Florida Department of Financial Services’ Division of Insurance Fraud (DIF) after a two-year investigation uncovered suspicious insurance claims made by the individuals.

According to a story in the Tampa Tribune, Minette St. Fleur, 50, paid individuals to pose as patients injured in car accidents. The complex scheme, which was centered at Integrated Healing Clinic in Tampa, involved these patients filing fraudulent claims to multiple insurance agencies for their bogus injuries. Prices paid for treatments, some of which never occurred, greatly exceeded actual costs and totaled more than $150,000 in fraudulent claims, DIF found.

The scam was directed at GEICO Insurance Company, 21st Century Insurance, Progressive, Safeco Insurance, State Farm Insurance and Liberty Mutual Insurance. GEICO initially noted some patients repeatedly visited the clinic for many different treatments and that some dates on clinic paperwork did not match the dates on the filing of claims. The company brought the suspicious activity to the attention of DIF who began their investigation.

St. Fleur has been charged with insurance fraud and patient brokering, and was released on $2,000 bond

The others who were arrested for their involvement in the scheme included:

  • Sonthonax Ferdinand, 57
  • Marie Jean Gilles Valcin, 42
  • Marie Celestin, 38
  • Josue Auguste, 42
  • Elisena Louissaint, 48
  • Joseph D Pierre, 39

Hillsborough County State Attorney Mark Ober’s office will prosecute the case.

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Filed under Insurance Fraud

Beyond Texting: Distracted Driving Includes Selfies, PDA & Grooming

Although texting while driving remains a top driving distraction, a recent survey from Erie Insurance found that there are a variety of activities happening behind the wheel that could lead to impending accidents. The online survey of 1,915 U.S. drivers aged 18 and older was conducted in February by Harris Poll on behalf of the insurance provider.

“A distraction is anything that causes a driver to take their eyes off the road, their hands off the wheel, or their mind off their primary task of driving safely,” said Doug Smith, senior vice president of personal lines at Erie Insurance. “Our survey found drivers unfortunately are engaging in a wide range of distracting and potentially dangerous behaviors.”

Erie Insurance said that besides overt phone distractions like texting and talking while driving, survey responders also admitted to: public displays of affection, personal grooming, taking selfies, putting in contact lenses or eye drops, curling eyelashes, scratching off lottery tickets, and even playing the guitar.

Based on the survey, here are distracted driving behaviors and the percentage of drivers who revealed they engaged in the activity:

  • Romantic encounter/PDA: 15%
  • Combing/styling hair: 15%
  • Changing clothes: 9%
  • Putting on make-up: 8%
  • Brushing/flossing teeth: 4%
  • Taking selfies: 4%
  • Changing drivers: 3%
  • Going to the bathroom: 3%

The survey also confirmed that texting while driving remains a serious problem with about 30 percent of drivers reporting that they, themselves, have texted while driving, and almost 75 percent saying that they have seen other drivers do it.In addition, the survey uncovered regional differences as well as distinctions between gender and age. According to the results, drivers in the Northeast text the least, men are more likely to text than women, and younger drivers text more.

Texting while Driving by Region:

  • Midwest: 28%
  • South: 35%
  • West: 30%
  • Northeast: 24%

Texting while Driving by Gender:

  • Female: 28%
  • Male: 32%

Texting while Driving by Age:

  • 18-34: 51%
  • 35-44: 39%
  • 45-54: 33%
  • 55-64: 14%
  • 65 and older: 7%

According to U.S. government statistics, in 2012, more than 420,000 people were injured in car crashes involving distracted driving and more than 3,300 people were killed. In 2013, Erie Insurance analyzed police data and found that daydreaming was the most fatal distracted driving behavior behind the wheel.

Erie Insurance released its findings in conjunction with National Distracted Driving Awareness month in April to bring attention to distracted driving behaviors and their dangerous threat to roadway safety.

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Filed under Insurance Fraud

Sales of Fraudulent Life Insurance Policies Leads to Pompano Beach Arrest

A Pompano Beach woman who sold fraudulent life insurance policies to elderly military veterans and their families has been arrested and charged with insurance fraud, according to an April 1 announcement by Florida’s Chief Financial Officer, Jeff Atwater.

Patrice Sands sold the policies to members of Make-A-Wish Veterans, Inc., a Miami company providing assistance to veterans. According to investigators, Sands sold the policies, collected premiums, and deposited those premiums into a bank account tied to her business, Universal Research Group Insurance Agency. She never actually procured the policies, however.

When her husband died, one 84-year-old victim attempted to collect the death benefits due her under the policy she had purchased from Sands. No benefits were received, however, and Sands told the widow that the insurance company had “gone under.” Sands then sought return of the life insurance certificate and allegedly destroyed it. A check written by Sands to refund the woman’s premiums bounced due to insufficient funds.

If convicted, Sands faces up to 25 years in prison and the suspension of her insurance agent license.

Since July 2014, the Division of Insurance Fraud has arrested 59 insurance agents, bail bond agents, and public adjusters for fraud that has totaled almost $4.5 million dollars.

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Filed under Insurance Fraud

Florida CFO Stresses Insurance Fraud Prevention Efforts

As Fraud Prevention Month came to a close, Florida Chief Financial Officer Jeff Atwater announced that the Florida Department of Financial Services remains focused on raising awareness of insurance fraud and its impact on the lives of Floridians. He also reassured citizens that his office will continue to combat this unlawful activity.

Throughout the country, the overall price tag for fraud is more than just a dollar amount in a budget report. The estimated $80 billion annual cost of fraud poses potential fiscal drains not only to insurance companies but to law-abiding insurance customers who in turn have to pay higher premiums.

According to the National Insurance Crime Bureau (NICB), auto insurance fraud, homeowners’ insurance fraud, and workers’ compensation fraud make up the three most prevalent types of insurance fraud. In addition, personal injury protection, or PIP, fraud accounts for nearly 50 percent of all fraud referrals in Florida.

The Florida Legislature passed HB119 in 2012 to reduce PIP fraud and yield savings for consumers. Florida auto policyholders have saved $65 since passage, according to the Atwater release, resulting from a statewide decrease in PIP fraud of 13.6 percent.

Also, the Department of Financial Services’ Division of Insurance Fraud (DIF) has helped bring fraudulent offenders to justice by actively pursuing these criminals through their investigations. Since 2011, when CFO Atwater first took office, DIF personnel have made a significant impact in the fight against fraud:

  • 5,708 insurance fraud arrests made
  • 4,485 fraud convictions stemming from these arrests
  • 96% conviction rate in partnership with local law enforcement and the State Attorney’s Offices

The Department’s Division of Consumer Services also conducts a consumer educational program, notes Atwater, to help Floridians from becoming fraud victims. Consumers who become aware of potential fraud can report it using an Insurance Fraud Hotline at 1-800-378-0445, or on the webpage www.MyFloridaCFO.com/Fraud. An Anti-Fraud Reward Program is in place to award individuals up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

Uber and Lyft Oppose Florida Push for Increased Insurance Coverage

Florida Sen. David Simmons, R-Altamonte Springs, is pushing for stronger insurance requirements for transportation network companies that connect drivers with passengers through smartphone apps. According to a recent article in the Herald-Tribune, the Senate Banking and Insurance Committee supported the measure (SB 1298), despite opposition from Uber and Lyft—the two leaders in the burgeoning app-connected industry of for-hire drivers.

The proposed legislation would create the following distinctive coverage requirements:

  1. the “on call” period from when a driver is notified about a customer to pick up to when the passenger gets in the vehicle—which currently is considered a coverage gap
  2. when a customer is actually riding in the vehicle—called the ‘ride acceptance’ period

Sen. Simmons believes the proposal is necessary to protect people who may be harmed by ride-service drivers who are on their way to pick up a passenger. In addition, the proposed changes could protect the companies themselves if drivers bypass the app service and notify customers that they are available directly for future rides.

Lobbyists for the transportation network companies, however, dispute the necessity for “on-call” coverage, which they say, will lead to increased fares. Part of the success of Uber and Lyft is a result of traditionally lower fares than standard taxicab company rates.

Currently, these for-hire drivers only need the state minimum of insurance.

Under the proposed legislative bill, the driver or company would be required to carry liability coverage of at least $125,000 for death and bodily injury, at least $50,000 for property damage, and at least $250,000 in uninsured and underinsured motorist coverage. When a passenger is riding in the vehicle, the coverage would jump to at least $1 million for death, bodily injury and property damage, and $1 million in uninsured and underinsured motorist coverage.

Taxi and limousine services, the majority of which are currently controlled by local governments, must carry policies under Florida law that include minimum limits of $125,000 per person for bodily injury, up to $250,000 per incident for bodily injury, and $50,000 for property damage.

The proposal, which still has to clear two additional Senate committees and has not been heard in the House as of yet, comes on the heels of industry requests for the state to clarify insurance requirements in the “for hire” transportation industry.

Click on the link for more information about Florida SB 1298, Insurance for Short-term Rental and Transportation Network Companies.

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Filed under FL Legislation

Four Arrested in Medicaid Fraud Scam Targeting Orlando Homeless

The Florida Attorney General’s Office announced on March 20, 2015 that four people have been arrested for Medicaid fraud. Homeless people were allegedly recruited to pose as patients in the Orlando fraud scheme, frequently in exchange for gas cards and temporary housing.

The defendants in the case are identified as follows:

  • Christina Benson, arrested in Georgia
  • Demetrious Davis, arrested in Florida
  • Harold Harrison, arrested in North Carolina
  • Dr. Sabiha Khan, arrested in Florida

Each individual faces at least one count of Medicaid Provider Fraud and one count of Organized Scheme to Defraud.

According to the investigation, Christina Benson, owner of Tranquility Healthcare Solutions in Orlando, billed Medicaid up to $3.2 million for psychosocial rehabilitation services that were neither warranted nor provided in a period of just 18 months. The announcement cited fraudulent payments of $215,000.

The company claimed to have worked with a local doctor, Sabiha Khan, as a treating provider, but many recipients said they had never met her. Additionally, untrained personnel—including some with criminal records—were allegedly used to deliver some services.

Click on the link for the Florida Attorney General announcement.

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Filed under Insurance Fraud