Author Archives: Michael A. Rosenberg, Esq.

Fraud Charges Filed in West Palm Beach False Insurance Claim Case

The fact that Frank Assouman was not even in his truck at the time it was hit in a Boca Raton parking lot did not stop him from filing more than $25,000 in false insurance claims.

The crash report and a witness statement taken at the time of the accident indicate that the West Palm Beach resident was not in his parked vehicle when it was struck by another driver. Damage to Assouman’s vehicle was estimated at $1,500.

Days later he sought medical care, including an MRI at Delray Diagnostics and other treatment obtained from Modern Medicine, Inc.

In addition to filing a claim for property damage, Assouman reportedly filed a $21,815 injury claim with State Farm and a $3,035 claim with his own carrier of Windhaven Insurance.  Both claims were denied.

The Florida Division of Insurance Fraud filed a fraud charge against Assouman for less than $20,000.

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Filed under Insurance Fraud

More Than Half of Florida PIP Claimants Hire an Attorney

PIP claimants are increasingly being represented by legal counsel, according to a new study released by the Insurance Research Council (“IRC”) titled Attorney Involvement in Auto Injury Claims.

In 2012, the study notes that 36 percent of auto injury PIP claimants nationwide were represented by attorneys, compared to 31 percent in 2007. For bodily injury claims, representation rose slightly to 50 percent.

Compared to claimants without legal representation, PIP claimants with attorneys were found to have a greater likelihood of the following behavior:

  • Sought more treatment in a pain clinic, including MRIs
  • Experienced longer waiting times for claim payments
  • Collected lower net payments
  • Involved in alleged fraudulent claims

Historical trends from 1977 to the present are outlined in the IRC chart below.

Attorney_Involvement_Fig 1_cr

Attorney involvement was also measured by state. Florida ranked at the top of the list, with more than 50% of claimants represented. Kansas, where 12% of PIP claimants are represented, was the lowest ranking state.

Data is drawn from 12 participating insurers and 35,000 auto injury claims closed with payment under the five principal passenger coverage areas, according to survey sponsors.

Click on the link to read more about the Attorney Involvement in Auto Injury Claims study.

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Filed under Fla. Stat. 627.736 (2008)

Fraudulent PIP Billings of $80K Lead to Fort Lauderdale Arrests

Three Fort Lauderdale residents—Claudio Boyett, Leslie Sanchez Martinez and Claudia Hoy—were arrested for participating in a staged accident that resulted in the submission of $80,000 in fraudulent PIP claims, according to Florida Chief Financial Officer Jeff Atwater.

The three participants allegedly staged an accident involving a U-Haul truck, which hit a parked Dodge Caravan carrying eight occupants. Fraudulent claims were then filed with multiple clinics across South Florida. More arrests are expected in the case.

In other PIP fraud news across the state, David Torres was convicted for his work as a recruiter on behalf of the Indian Rehabilitation Center in Jacksonville. He was charged with eight counts involving a staged accident. Torres was ordered to repay $109,000 in restitution to eight insurance companies, and will serve five years in jail.

“PIP fraud schemes drive up auto insurance rates for all Floridians, which is why we are working day and night to prevent it from happening in the future and hold the fraudsters who have broken the law accountable,” said CFO Atwater.

The Florida Department of Financial Services reports that it has made almost 2,000 PIP fraud arrests since early 2011. Convictions are up 17% for the current fiscal year, with a total of 1,225 to date.

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Filed under Insurance Fraud

Ridesharing Services UberX and Lyft Test the Market in Miami

Miami is one of the latest cities to be targeted by the controversial ride-sharing services of Lyft and UberX. Using smartphone apps, the companies connect drivers with riders via the Internet.

The taxi industry is mounting strong objections to the new services. In Miami, licensed taxi drivers have called on Miami-Dade County Commissioners to jail drivers who have been hired by the rideshare services. The City has already levied fines, conducted undercover sting operations, and impounded vehicles of Lyft drivers, according to a recent Miami Herald article.

Uber has a big war chest to withstand legal challenges. The company recently raised $1.2 billion in new funding, giving it a valuation of $18 billion. Started as a luxury car service in 2009, the company later rolled out the UberX low-cost service featuring non-professional drivers who use their personal cars.

Many questions about insurance coverage cloud the controversy, including the items outlined below.

  • The transporting of people or goods for hire is normally excluded under a personal auto policy.
  • Rideshare drivers who operate a personal auto covered by a consumer auto policy run the risk of being denied coverage in the event of an accident. In a tragic New Year’s Eve accident, for example, an Uber driver struck and killed a 6-year old pedestrian.
  • Passengers and third parties that sustain personal injury or property damage may not have access to full insurance benefits when an accident involves a rideshare driver operating a private auto under a personal auto policy.
  • If the rideshare driver fails to inform the insurance carrier of livery-related usage of their private auto, the carrier may attempt to void the policy for misrepresentation.
  • Private vehicle insurance coverage for a blended use of personal and commercial applications is not a standard industry practice, meaning that states and courts have not had a chance to consider and test all the legal implications.

Uber now operates in 128 cities across 37 countries, according to Reuters. Competitors include Lyft, Sidecar, Flywheel, and Hailo. Some services use mobile apps to hail a licensed taxi, while others rely on private individuals as drivers.

Click on the links to read more about Uber and Lyft.

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Filed under Licensing

Insurance Scammers Target Unsuspecting Drivers in Staged Auto Accidents

It could happen to anyone. A stopped driver waves you on and then slams into your car, causing an accident that looks like it’s your fault and has produced injuries.

A recent story on News4Jax.com revealed how insurance scammers did just that to two victims, both of whom found themselves in the midst of staged accidents either when driving in traffic or pulling out of a parking spot.

One of those victims was one of 80 targeted by a group of schemers, according to postal inspectors.  Total losses in this case came to $130,000.

Drivers who are involved in an accident that seems like it may have been staged are advised to make careful records. Although inspectors say these aren’t easy scams to avoid, they recommend documenting details—both the accident victims and any vehicles at the scene—with photos and video if possible.

The Coalition Against Insurance Fraud provides different scenarios that scammers typically use to stage auto accidents. The organization’s site also provides steps innocent drivers can take to prepare themselves and fight back.

One suggestion is that a driver count how many passengers are in the other car, get their names, phone numbers and driver’s licenses. Accident victims are also advised to get the other car’s license number, and to take cell phone photos of the damage caused to both cars, as well as the passengers in the other car.

 

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Filed under Insurance Fraud

Attorney Fee Conflict Settled in Advanced Chiropractic v. UAIC

On May 29, 2014, the Florida Supreme Court issued a decision settling a conflict over the timeliness of filing for attorney’s fees.

The case originated in Broward County with an action filed by Advanced Chiropractic against United Automobile Insurance Co. (“UAIC”) for PIP benefits. During the course of the action, the attorney for Advanced moved offices and filed a change of address with the Clerk of Court. Two months later, Advanced and UAIC entered into a settlement agreement in which UAIC agreed to pay Advanced’s attorney’s fees. The trial court judge subsequently entered an order of dismissal in the case.

Advanced’s attorney never received a copy of the dismissal because the Clerk of Court failed to update its records concerning the address change. Once he learned of the dismissal, months later, counsel for Advanced filed a motion for attorney’s fees. Because the motion was filed past the mandatory 30-day deadline, the attorney moved to vacate the order of dismissal based on excusable neglect due to the court’s failure to update its records.

In a hearing on the motion to vacate the dismissal, the attorney for Advanced and an employee of the Clerk of Court both filed unsworn statements. The county court found that Advanced had established excusable neglect, vacated the order of dismissal, and allowed Advanced’s attorney to file a motion for attorney’s fees.

UAIC appealed the decision to the circuit court, contending that counsel for Advanced had not established excusable neglect. The circuit court held that, because the statements from the attorney and the Court’s employee were unsworn, there was not sufficient evidence to support the finding of excusable neglect. The circuit court therefore reinstated the order of dismissal.

Advanced appealed to the Fourth District, asserting that the circuit court had failed to apply the correct legal standard. The Fourth District concluded that Advanced had been denied due process and therefore quashed the decision of the circuit court.

Advanced then filed a motion for attorney’s fees. UAIC opposed the motion on the basis that it was untimely pursuant to the FL Rules of Appellate Procedure. The District Court dismissed UAIC’s argument based on the Rules of Appellate Procedure, but nonetheless denied the motion for attorney’s fees on the basis of the FL Supreme Court’s 1991 holding in Stockman v. Downs, which requires parties to plead entitlement to attorney’s fees.

The Fourth District held that, pursuant to the Stockman decision, the request for attorney’s fees must be made in the pleadings which, in this case, would be the petition, the response, or the reply. Because Advanced did not request fees in the petition or reply, the district court held that the motion was untimely. The state Supreme Court then agreed to review the case to consider whether the Fourth District misapplied the Stockman decision.

In the Stockman case, the Supreme Court addressed whether a prevailing party could raise entitlement to attorney’s fees for the first time by motion after trial. The Court held that a claim for attorney’s fees based upon a contract or statute is waived unless it is made in the pleadings. The Court explained that the fundamental concern is that the parties have notice of the claim as it may affect the decisions of the parties with respect to the case.

In distinguishing Stockman from this case, the Court noted that Stockman involved a request at the trial level and that the primary concern—lack of notice—is not implicated in the case at hand. Since Advanced requested attorney’s fees in both the county and circuit courts,   UAIC could not contend unfair surprise when Advanced again claimed entitlement to attorney’s fees. Consequently, the Court quashed the decision in the court below and remanded to the district court for a determination of the amount of attorney’s fees to which Advanced is entitled.

The case is Advanced Chiropractic And Rehabilitation Center, Corporation vs. United Automobile Insurance Company, Supreme Court of Florida, Case No. SC13-153, May 29, 2014.

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Filed under Case Law

Florida Insurance Premiums May Reflect $100 per Policy in Fraud Costs

Insurance fraud costs U.S. consumers $80 billion annually, according to a recent news report by News4Jax.com. For Florida residents, insurance fraud takes $100 out of consumers’ pockets each year in the form of higher auto and other insurance premiums.

“Staged accidents have been a problem around Florida, especially in urban areas,” reports James Quiggle of the Coalition Against Insurance Fraud. “Sometimes you can arrest the lower level recruiters or fake patients and convince them that they need to rat out the ring members or leaders in order for liens.”

Arson is another common form of auto fraud, according to claims executives from Main Street America who were interviewed for the News4 story. The use of an accelerant in an auto fire, for example, is usually a good sign that fraud is involved.

Social media posts that indicate signs of potential fraud are also coming under close scrutiny by insurance adjusters and claims executives. In one instance, a “bedridden” claimant posted a social media update showing a recent whitewater rafting expedition.

The good news is that many criminals involved in auto insurance fraud and related forms of fraud are caught and brought to justice.

Click on the link to read the full article “Insurance fraud costing all of us $80 billion a year.”

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Filed under Insurance Fraud

Owner of Tampa Accident Clinic Sentenced for Insurance Fraud

Dailin Rojas Perez, who was charged in September with racketeering and money laundering, has entered into a plea agreement and will serve 24 months house arrest for her connection to a major insurance fraud scheme at a Tampa accident clinic, Florida Chief Financial Officer Jeff Atwater announced.

The 30-year old Rojas Perez is also required to pay $350,000 in restitution to the insurance carriers who were deceptively billed, as well as almost $40,000 in investigative costs. Fraudulent proceeds involved more than $340,000, according to her indictment last fall.

Through an investigation by the Department of Financial Services’ Division of Insurance Fraud, Rojas Perez’s company—Today’s Medical Marketing, LLC—conspired with Medical Therapy Practitioners to fraudulently bill insurance carriers. The deceptive charges included billing for: services not rendered, services procured as a result of staged automobile crashes, services for patients who had no injuries, and services not compensable because the business license was obtained fraudulently.

“I am proud of our investigators for bringing this fraudster to justice,” CFO Atwater said. “We will not tolerate anyone who commits insurance fraud and causes the rates of hard-working Floridians to increase.”

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Filed under Insurance Fraud

Tallahassee Towing Company Accused of ‘Double Dipping’ Insurance Fraud

In a joint investigation, the Department of Financial Services’ Division of Insurance Fraud and the Leon County Sheriff’s Office uncovered an illegal insurance fraud scheme that involved a towing business with offices in Tallahassee and Thomasville.

According to an announcement by Chief Financial Officer Jeff Atwater, six employees of Auto Doctor Towing Company were arrested for filing fraudulent insurance claims for towing services.

The investigation exposed Auto Doctor’s alleged deceptive billing practices which enabled the company to essentially get paid twice for the same job. Even though customers were covered by AAA, they were told to bill both AAA and their automobile insurance company for towing and mileage charges, Atwater’s office reported.

A news story on WCTV Tallahassee said 22 victims were affected by the scheme, and eight insurance companies were swindled out of more than $3800.

Company owner Monte Ott is facing dozens of felony charges. Anthony Ragsdale, manager of the company, and employees Tina Norman, Daniel Justice, Dwayne Dupree, and Johnny Norman were also arrested as a result of the sham.

“I am proud of our investigators and the Leon County Sheriff’s Office for working together to shut down this illegal operation that’s responsible for defrauding insurance companies and consumers out of thousands of dollars,” said CFO Atwater. “Insurance fraud not only hurts businesses, it takes money from all Floridians through higher insurance costs.”

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Filed under Insurance Fraud

Cost of Florida PIP Premiums Start to Drop Due to HB 119 Reforms

Almost two years after the Florida legislature passed House Bill 119, drivers may now start to notice a slight drop in this year’s automobile insurance rates resulting from reforms that helped lower Personal Injury Protection (PIP) premiums.

Although the primary goal of PIP, also known as no-fault insurance, was to reduce court cases and payment delays for injured drivers, the number of PIP claims and PIP payments escalated, even though the number of auto accidents did not increase over the past few years.

According to an article in the April 21 edition of Highlands Today, a local edition of the Tampa Tribune, PIP premiums are roughly 2 percent of Florida’s collected insurance premiums, but questionable claims make up nearly 50 percent of fraud referrals. The Division of Insurance Fraud received over 3,000 PIP fraud complaints in 2005-06, and obtained 225 convictions in 2007, the article added.

However, as we reported on this blog on March 31, a recent National Insurance Crime Bureau (NICB) report shows that tighter legislation, enhanced public awareness, and coordinated law enforcement is having a positive effect on PIP fraud in Florida.

In calculating cost reductions to the consumer, most insurers used rates from a Pinnacle study which projected legislative reforms would save Florida policyholders roughly 14-24 percent. Typically, 25 percent of a consumer’s total auto insurance premium cost comes from PIP.

A preliminary DOI analysis of the rates submitted by the top 20 automobile insurance companies writing PIP insurance, encompassing more than 75 percent of the Florida market, showed a 13.2 percent decrease. Therefore, a statewide reduction in PIP averaging 13.2 percent would translate to a 3-4 percent savings for the policyholder, the DOI figures.

DOI’s analysis was compiled to demonstrate the cumulative effect of House Bill 119 after the first required rate filing due in October 2012 and the second rate filing on Jan. 1, 2014, the Highlands Today story said.

However, rate changes are still pending for 2014, according to Amy Bogner, Deputy Director of Communications at the Florida Office of Insurance Regulation. “The anticipated cumulative effect of these two rate filings in the legislation was a 25 percent overall decrease in PIP rates,” Bogner explained.

Auto insurers who did not decrease PIP premiums by the cumulative 25 percent were required to demonstrate why the company’s savings should vary.

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