Author Archives: Fernando L. Roig, Esq.

Staged Accident Recruiter from Palm Beach County Sentenced to Nine Years

A West Palm Beach man, who participated in an $8 million insurance fraud scam, was recently sentenced to nine years in prison for his role in the matter.

Joel Antonio Simon Ramirez, about whom we reported on our FL PIP Guide in April, helped recruit individuals to participate in staged automobile crashes. According to a story in the Palm Beach Post, the 30-year old worked together with three other chiropractors who filed fake insurance claims for the participants in these crashes. They operated the scheme out of clinics throughout Palm Beach County.

Following a six-week trial in April, all four defendants were found guilty of money laundering and mail fraud. Ramirez was also found guilty of helping stage the auto accidents.

By violating PIP insurance provisions, these schemes not only cost insurers but also hurt Florida drivers, federal prosecutors said. The conspiracy was part of a larger staged accident ring dubbed “Operation Sledgehammer” by investigators who discovered that many participants damaged vehicles using sledgehammers to give the appearance of a crash.

Nearly 60 people have been charged in federal court and almost 40 have been charged in state court as part of this sweeping investigation. Most have pleaded guilty to participating in staged accidents and then seeking treatment for bogus injuries. According to prosecutors, the five ringleaders fled to Cuba.

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Filed under Fla. Stat. 627.736 (2008), Insurance Fraud

Will Florida’s Reported Drop in PIP Fraud Continue?

Florida, one of 12 states with no-fault auto insurance, has reported its fair share of insurance fraud, mostly through scams involving Personal Injury Protection. PIP insurance provides personal injury protection up to $10,000 in immediate medical coverage without having to establish fault in the court system.

As industry insiders know, this monetary level is often seen as an easy target by fraudsters. Even though PIP premiums have represented only about 2 percent of all of Florida’s collected insurance premiums, they account for nearly half of all auto insurance fraud referrals, the Florida Office of Insurance Regulation (FOIR) has established.

But all of that may be changing, the National Insurance Crime Bureau believes, as auto insurance fraud has actually dropped in Florida since a 2012 law reformed PIP. As we posted on our FL PIP Guide this past March, tighter legislation, enhanced public awareness, and coordinated law enforcement efforts appear to be having a positive effect on PIP fraud in Florida.

These changes specifically include stronger penalties for medical providers who commit PIP fraud, a 14-day window for accident victims to seek medical treatment, and reduced benefits and treatments.

In line with projections made when HB119 was passed, FOIR expects PIP coverage rates to decrease by an average of 13.2 percent, reducing auto insurance rates 1.2 percent overall, according to figures based on a review of data from 20 insurers that provide auto insurance to more than 75 percent of the Florida market.

However, because PIP coverage savings will still be relatively small in comparison to the overall total cost of a typical auto insurance policy, and because fraud is at times difficult to detect, the next few years may be a better indication of whether these changes have produced a statistical blip in the numbers or a longer-term trend.

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

Owner of ‘Exclusive Health Systems’ Clinic Arrested on Insurance Fraud Charges

Marlene Lopez del Castillo was arrested in October in connection with an illegal insurance scheme, according to the Division of Insurance Fraud (DIF). She allegedly pretended to be the doctor at Exclusive Health Systems, a Miami clinic she owned. Lopez del Castillo, 44, was charged with insurance fraud, grand theft, and practicing medicine without a license.

According to DIF, two people who participated in a staged vehicle accident in October 2011 visited Exclusive Health Systems for initial evaluations. Lopez del Castillo allegedly behaved as if she were the physician on call and examined both patients during their clinic visits, even though she is not a medical doctor nor does she hold a license with the Department of Health.

Lopez del Castillo also allegedly fabricated follow-up examinations that were later signed off by Dr. Hugo Goldstraj. Dr. Goldstraj gave a statement to investigators indicating that Lopez del Castillo prepared the reports. He said that he did not actually examine the patients nor do the paperwork.

Dr. Goldstraj was arrested in 2013 by DIF in a separate investigation, dubbed ‘Operation No Med Service,’ that involved a massive false billing scheme. Dr. Goldstraj was convicted in May and has since surrendered his license.

Lopez del Castillo opened Exclusive Health Systems in 2000.

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Filed under Insurance Fraud

Panhandle Auto Body Shop Owners Charged with Insurance Fraud

The Wreck-O-Mended auto body shop in Quincy, Fla. was the setting for an insurance fraud scam, according to a report by WTXL TV. Quincy is a small town of approximately 7,000 residents located northwest of Tallahassee in the Panhandle.

Owner Russell D. Owens and his wife Cassandra Owens received almost $2,000 in payment from Progressive Insurance Company for the replacement of a bumper, trunk lid and side panel on an insured’s damaged vehicle. The work was allegedly not done properly, and yet the body shop owners kept the insurance money. The insured must now pursue legal action against the shop in order to collect any money owed to complete the repairs, according to the report.

Russell Owens is accused of overcharging for repairs, a felony, and grand auto theft. Cassandra Owens is charged with criminal conspiracy for her role in the scam. Both parties were arrested this week by the Florida Department of Insurance Fraud.

Click on the link to read the full report.

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Filed under Insurance Fraud

Uninsured Drivers Caught by Broward Sheriff’s Fraudulent Insurance Verification Operation

Recently, some uninsured motorists driving in Broward County were in for a real revelation. On September 17, law enforcement officers worked traffic stops and were able to verify insurance coverage on-the-spot that day, much to the surprise of drivers.

The operation, known as the Fraudulent Insurance Verification Operation or FIVO, was conducted by the Broward Sheriff’s Office in conjunction with 30 insurance investigators who had instant access to their client databases. Setting up command central at the Tamarac BSO, the investigators provided real-time insurance information to police officers throughout the county for the day, according to a story in Tamarac Talk.

As a result of using this proactive strategy against insurance fraud, a total of 460 vehicle stops were conducted resulting in 563 citations and seven arrests, the Florida Department of Insurance Fraud reported.

Participating in FIVO were: Allstate, Assurant, Bristol West, Direct General, Esurance, Farmers, Gainsco, Geico, Imperial Fire, Infinity, Mapfre, Mercury, MetLife, National General, Nationwide, Security General, Sentry, State Farm, Travelers, USAA and Windhaven.

The Coalition Against Insurance Fraud says that Florida ranks fifth highest in the nation for uninsured motorists, which is estimated to cost each family about $950 a year. Under Florida law, anyone presenting a fraudulent proof of motor vehicle insurance has committed a third-degree felony.

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Filed under Fla. Stat. 627.736 (2008)

Two More Join Class Action Suit Alleging Excessive Billing in PIP Claims at Florida Hospitals

In September, we reported on our FL-PIP Guide about two women injured in unrelated car accidents filing suit against a holding company that operates several hospitals in Florida. Marisela Herrera and Luz Sanchez alleged that HCA Holdings grossly overcharged for their emergency room radiological services.

Now two more Florida residents have joined the lawsuit in an amended class action that alleges Memorial Hospital Jacksonville, North Florida Regional Medical Center of Gainesville, JFK Medical Center, and parent company HCA have violated Florida’s Deceptive and Unfair Practices Act, according to a GlobeNewswire story.

Nicholas Acosta and Penny Wollmen, the new plaintiffs, also claim they were excessively billed and charged unreasonable fees for emergency radiological services covered in part by the plaintiffs’ Florida Personal Injury Protection (PIP) insurance. Florida’s PIP statute mandates that insurers pay 80 percent of all reasonable expenses.

However, Acosta was charged $6,965 for a CT scan of his spine and $6,277 for a CT scan of his brain after he was treated in the ER of Memorial Hospital in October 2013 following a car accident. After Wollmen’s accident in February 2014, she was billed $6,853 for the CT scan of her cervical spine, $6,140 for the CT scan of her brain, and $1,454 for a thoracic spine X-ray by North Florida Regional Medical Center.

Because of the allegedly inflated expenses, the complaint claims that each of the plaintiff’s $10,000 PIP coverage was prematurely depleted and that they were billed thousands of dollars for radiological services not paid for by their PIP insurers.

As a result, plaintiff Wollmen, for example, has been paying out-of-pocket expenses for additional chiropractic treatment that normally would have been at least partially covered by her PIP insurance if it had not been used up by hospital bills.

The complaint also charges breach of contract. All four plaintiffs technically entered into a “Condition of Admission” contract that stipulates patients must pay their accounts at the rates stated in the hospital’s price list.  None of the plaintiffs were given a price list at the time of their medical treatment.

The amended class action lawsuit was filed October 15, 2014, in U.S. District Court Middle District of Florida, Tampa Division.

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Filed under Insurance Fraud

Crooks Use Stolen IDs to Take Vehicles, Reports NICB

The National Insurance Crime Bureau (NICB) has noticed an uptick in the use of more sophisticated schemes to steal cars as new vehicle technology makes methods like hot-wiring almost obsolete. These findings highlight a growing trend in “financial fraud” auto theft.

Even though these vehicles are technically stolen by crooks, the methods they use for the theft—in legal terms—constitute financial fraud, the NICB explained in a news release. Consequently, these stolen vehicles are not counted as auto thefts, partially explaining a continual decline in auto theft crime statistics over the past two decades.

One such ploy involves the use of stolen forms of identification, such as fake drivers’ licenses and personal information stolen from identity theft victims. Stolen IDs are used to fraudulently lease or obtain loans to procure new vehicles. Once the crooks drive the vehicle off the lot, they never make scheduled payments. Often instead, these cars are re-sold to unsuspecting buyers after the scammers switch the Vehicle Identification Numbers (VINs).

Unfortunately for investigators, there is currently no central database that quantifies these crimes.

“Trying to put a number on these kinds of thefts is a challenge,” said NICB President and CEO Joe Wehrle. “It’s comparable to a hacker stealing IDs—you don’t know you’re a victim until it’s too late. Most of these thefts don’t show up in traditional crime reporting numbers and become financial losses for lenders, car rental companies and others. The result is millions of dollars added to the cost of doing business which is ultimately passed on to consumers.”

NICB advises consumers to frequently check their credit reports for signs that someone else is using their identity to take out new loans.

Because these types of “white collar” crimes have become more widespread, the NICB has launched a new series to draw attention to the growing trend in order to raise public awareness and thwart these types of auto thefts. Over the next few months, NICB will expose other new schemes that criminals are using to steal cars besides using stolen IDs.

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Filed under Insurance Fraud