Author Archives: Mark J. Rose, Esq.

Five Arrested, Two Wanted in Organized South Florida PIP Fraud Scheme

Attorneys, chiropractors and clinic employees in Martin, Miami-Dade and Palm Beach Counties were swept up this morning in the culmination of a year-long undercover investigation led by the Florida Department of Financial Services’ Division of Insurance Fraud.

Two Boca Raton attorneys are among the five individuals arrested today:

• Brian Greenspoon (attorney), Boca Raton
• Cory Meltzer (attorney), Boca Raton
• Roger Hughes Bell (chiropractor), Hobe Sound
• Alejandro Marin, Homestead
• Douglas Santiago, Boynton Beach

Lake Worth chiropractor Ray Grand and Stuart resident Christina Savoye have warrants out for their arrest.

A brokering agreement among participants governed the payment of fees to a patient broker who recruited patients illegally for treatment at unnamed South Florida medical clinics. Unbeknownst to the crime ring organizers, the broker was in reality an undercover agent. Other law enforcement personnel, also working under cover, infiltrated the clinics involved to document the allegedly criminal activities.

Principals in the fraud scheme acknowledged on several occasions that it was illegal to pay for patients, so all referrals were paid under the guise of marketing services, according to a press release issued by Florida Chief Financial Officer Jeff Atwater.

Apparently, insurance carriers and others were billed by participating clinics for medical and chiropractic services that were not rendered. Patients were also being taught how to fake injuries, according to the release.

While exact dollar amounts are not available, the crime ring is believed to be responsible for hundreds of thousands of dollars in fraudulent billings.

The defendants will be prosecuted by the 15th and 19th Judicial Circuit State Attorney’s offices, according to the release.

Click on the link to read the full news release.

Comments Off

Filed under Insurance Fraud

Staged Accidents and Insurance Fraud Lead to Miami and Orlando Arrests

September was a busy month for the Florida Division of Insurance Fraud (DIF). The agency arrested a massage therapist for fabricating medical forms, as well as four other individuals who organized and recruited participants to be involved in staged accidents.

According to DIF, one arrest occurred in Orlando while the remainder took place in Miami. Those arrested in the five unrelated cases include:

Madelein Marin Aroche. The 41-year old massage therapist worked at New Life Medical Center in Miami. She was charged with insurance fraud after submitting false therapy forms for treatment she never provided to two patients who participated in staged accidents. Her scheme resulted in almost $30,000 in fraudulent billing to GEICO Insurance Co.

Renfroe Lorenz Tyson. The 46-year old recruiter and participant was arrested in Orlando for his role in a 2013 staged accident that resulted in more than $6,600 in fraudulent billings to Allstate and GEICO.

Victor Manuel Hernandez. The 32-year old from Miami conspired with William Tejeda Mayobanex, who was arrested by DIF in August. Hernandez helped recruit participants for a staged accident in 2011. The participants were then referred to A & J Rehabilitation Center and D & J Rehabilitation Center, where more than $64,000 in fraudulent billings were submitted to United Auto and York Services.

Vladimir Caro. The 38-year old organizer staged an accident in 2011. The six participants in the crash were also referred to A & J Rehabilitation Center and D & J Rehabilitation Center. More than $117,000 in fraudulent billings were submitted to Allstate, State Farm, United Auto and Windhaven.

Sandy Morales Castro, 33, was identified as a recruiter and the eighth subject arrested in a staged accident that occurred in 2010. This fake crash resulted in more than $46,000 in fraudulent billings submitted to GEICO, MGA and Progressive.

Comments Off

Filed under Insurance Fraud

Operation Sledgehammer Finds Three Chiropractors Guilty of PIP Fraud

A federal jury has convicted one West Palm Beach chiropractor and two Miami chiropractors for their roles in a massive staged automobile accident scheme, following a seven-week trial in U.S. District Court for the Southern District of Florida.

Using the U.S. mail in a scheme involving Personal Injury Protection (PIP) payments, defendants were found guilty of defrauding insurance companies through mail fraud and money laundering.

Kenneth Karow, 54, of West Palm Beach, Hermann J. Diehl, 44, of Miami, and Hal Mark Kreitman, 50, of Miami Beach were all convicted on multiple counts. Karow was sentenced to 11 years in prison, Diehl to nine years, and Kreitman to eight years for the fraud scheme that ran from October 2006 through December 2012.

The fraud was perpetuated in several ways across 21 chiropractic clinics, according to a release issued by the U.S. Attorneys’ Office for the Southern District of Florida. Key elements of the scheme are outlined below.

  1. Licensed chiropractors were recruited to serve as the “named owners” of chiropractic clinics, in circumvention of Florida licensing requirements, with others actually in financial control of the business.
  2. Recruiters were used to attract real or fake auto accident victims who were fraudulently treated at the chiropractic clinics for injuries.
  3. False chiropractic treatment claims where then billed to insurance carriers.
  4. No co-pays or deductibles were collected from the “patients,” and this fact was not disclosed to the insurance companies.
  5. The money received from this scheme was then used to pay recruiters and participants and to enrich members of the conspiracy.

The prosecution is the latest in a series of charges that have been part of a four year investigation into the massive conspiracy. The joint federal and state investigation, known as Operation Sledgehammer, has resulted in charges against 93 defendants for their roles in the organization. Of these 93 defendants, 57 have been charged by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $11 million to defrauded insurance companies.

Click on the link to read the full release.

Comments Off

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

Motorists Worry More about Other Drivers’ Distractions, Says Survey

Fingers point to the “other driver” as a safety risk due to texting and cell phone usage, according to the recently released 2014 Travelers Consumer Risk Index.

While 51 percent of respondents do acknowledge a potential risk in their own distracted driving habits, 89 percent worry about distractions exhibited by other drivers while they are on the road.

Distracted driving habits among drivers in the respondent’s household aged 16 to 21 were viewed as a cause for concern by only 21 percent of survey participants.

Coincidentally, Travelers notes that parents are responsible for 50 percent of cell phone calls involving a teen driver. In fact, the survey states that almost all parents surveyed (90 percent) admit to also engaging in at least one technical distraction themselves while driving.

As we reported in an August post titled “Texting Laws Appear to Reduce Traffic Fatalities,” 31 percent of U.S. drivers, aged 18-64 years, said that they had read or sent text or email messages while driving at least once in the 30 days prior based on 2011 data from the Centers for Disease Control and Prevention. That year saw 3,331 fatalities and 387,000 injuries involving distracted drivers.

Texting while driving results in a 23x increased likelihood of being involved in an accident, according to the survey.

Click on the link to read more about the 2014 Travelers Consumer Risk Index.

Comments Off

Filed under Uncategorized

Special Investigation Units Learn the Latest Techniques to Stay Ahead of Fraudsters

The cost of fraud, which has an annual price tag of about $80 billion a year, is substantial to insurers as well as the general public. Special investigation units (SIU) put in place by insurers manage a multitude of ever-changing instances of suspected fraud.

The International Association of Special Investigation Units (IASIU) recently held a seminar and expo on insurance fraud to educate investigators about the latest trends and how to stop fraud by using the hottest tools available. Highlights of the conference were covered by Property Casualty 360° in a recent article.

Investigators, many of whom are former military and law enforcement professionals, learned about these newest scams and what they should look for in identifying them, places to find fraudsters, and how to conduct a thorough investigation.

Highlights in the seminar revealed:

  • Voice print” technology that tracks phone calls made by scammers: This technology can make a voice print, similar to a fingerprint, using biometrics to identify callers. Accents and other disguises to the voice will not defeat this technology.
  • A new database of voice prints: NICE Contact Center Fraud Prevention is creating a database of those voice prints to help insurers track and identify fraudsters who repeatedly file false claims.
  • Social media tools: These go beyond the traditional Google or Bing searches. Anyone using social media leaves a road map for investigators, allowing them to connect the dots between a scammer and his or her friends and associates without ever leaving their desks.
  • Information gleaned from staged car fires: A burned-out vehicle has a story to tell if you know how to read the clues. By learning about the properties of fire, ignition sources, burn patterns, what to look for at a burn scene, what types of evidence can be found, the mistakes that fraudsters frequently make, and reading air velocity and direction, investigators can gather the necessary data to rule out or make a case for fraud.

Although fraudsters often stay ahead of the game by introducing new ways to swindle insurers, investigators are now better equipped to handle what comes their way thanks to innovative technologies and techniques.

Comments Off

Filed under Insurance Fraud

Accident Reconstructionists assist Insurance Adjusters in Uncovering Staged Accidents

In some cases, auto accident claims raise red flags with insurers. The damage reported may be clearly visible and no claim for injury has been made, but adjusters just can’t put their finger on it. Before insurers pay the claim, however, they can bring in an accident reconstructionist to help put the pieces of the puzzle together and hedge against fraud.

According to an article in Property Casualty 360°, accident reconstructionists are investigators familiar with questionable claims such as when the vehicle damage doesn’t match the claimant’s story. Frequently, they do their work based on the claimant’s incident description, police report, repair records, and photographs.

Accident reconstructionists delve into many different aspects of the accident including: comparing the damages to the claimant’s statement of the sequence of events; making sure damages match the police report; and verifying that the damages between the vehicles meet the shape and height of the vehicles involved.

Key to making a conclusion lies in geometry and patterns of the vehicles and the damage they sustained. Photographs of the vehicle, in addition to information about the specific make and model enable accident reconstructionists to obtain the vehicle’s specific damage dimensions for use in their analyses. Even so, every case is different and must be considered independently before reaching a conclusion.

Because the scope of assignments are very specific, accident reconstructionists often can quote a price for their work based on the nature of the claim, available evidence, and whether a verbal update or a written report is required.

Input from accident reconstructionists may be invaluable to insurers. They sift through information and provide the missing data necessary to determine whether an accident was staged or if a claim is fraudulent.

Comments Off

Filed under Insurance Fraud

Court Rules for Progressive in Health Care Clinic Licensing Dispute

On July 29, 2014, the 13th Judicial Circuit Court for Hillsborough County granted final judgment in favor of Progressive Insurance in a case involving licensure violations by defendant health care clinic Best Medical. The defendant did not undertake a defense.

The following facts were undisputed:

  • Best Medical listed licensed massage therapist Jorge Romero as its 100% owner;
  • Romero did not actually own Best Medical, but was paid $2,000 a month for the right to use his credentials and claim that he was the owner;
  • Best Medical obtained a certificate from the State of Florida exempting it from licensure as a health care clinic by utilizing Romero’s credentials; and,
  • Progressive paid Best Medical PIP reimbursements in excess of $97,000 in response to bills submitted.

In his analysis of the case, Judge James Arnold noted that the Florida PIP statute requires that medical services be lawfully rendered and the corresponding bills be lawfully submitted to be valid. Additionally, the statute provides an insurer, such as Progressive, the right to challenge potential licensure violations, including the ownership of a clinic.

Florida’s Health Care Clinic Act requires that all medical clinics operating in Florida be licensed unless they are exempted. Relevant here is that a clinic “wholly owned by one or more licensed health care practitioners” is exempt from licensure.

The facts showed, however, that Romero was never the 100% owner of Best Medical. The clinic was therefore not entitled to the exemption for being wholly owned by a licensed health care practitioner.

Lacking a lawful exemption, Best Medical was required to possess valid licenses pursuant to the Health Care Clinic Act. Because it possessed no such licenses, Best Medical lacked the ability to lawfully render medical services and lawfully submit corresponding bills as required by Florida’s PIP statute.

Accordingly, Progressive was held not liable for payment of the bills rendered by Best Medical for reimbursement of purported medical services.

The case is Progressive v. Best Medical Healthcare Solution (f/k/a Tropical Healing Power), Case No. 14-CA-000327 Div. J (July 29, 2014). Click on the link to read the Final Judgment.

Comments Off

Filed under Case Law