Author Archives: Michael A. Rosenberg, Esq.

Dangerous Driving Habits Revealed in AAA Study

Even though most drivers support safe driving habits, many do not put them into practice, a recent study by the AAA Foundation for Traffic Safety found. The Foundation’s research points to a “culture of indifference” among drivers who place a high value on safe travel, but also admit to engaging in behaviors they consider unsafe, such as speeding and impaired driving.

The 2014 Traffic Safety Culture Index reports the results of a study in which drivers were surveyed about their drinking and driving habits, texting and cell phone usage, speeding and driving through red lights, and drowsy driving. The following is an overview of the results.

Drinking, Drugs and Driving

The message about the dangers of drinking and driving has been sinking in, as 66 percent of those drivers surveyed view the practice as a very serious threat to personal safety. In addition:

  • 97% consider it unacceptable to drive when someone has had too much to drink
  • 80% believe that anyone convicted of driving while intoxicated more than once should have an alcohol interlock ignition device to prevent them from starting the car if they have been drinking
  • 73% think alcohol interlock ignition devices should be installed in all new cars
  • 63% favored lowering the blood alcohol level from .08 to .05 g/dl

Even so, one in eight drivers still reported driving in the past 12 months while their blood alcohol level might have been at or over the legal limit, and 19 percent said they did so in the past month.

As far as drug use, almost half of those surveyed believe it is a much larger problem than it was three years ago.

  • 56% view using illegal drugs as a serious threat
  • 28% see prescription drug use an issue
  • Over 90% agreed that it was unacceptable for a driver to “drive one hour after using marijuana”
  • 85% supported laws that would make it “illegal to drive with a certain amount of marijuana in one’s system”

Texting and Cell Phone Usage

When it comes to cell phone use, drivers rate certain behaviors more risky than others. The study found:

  • 69% reported talking on a cell phone while driving in the past 30 days
  • 33% said they “talk on their cell phone while driving fairly often or regularly”
  • Over 50% say the habit is dangerous
  • 66% say the habit is unacceptable

However, 65% of drivers consider it acceptable to use hands-free phones, while only 33% view it as unacceptable.

In terms of texting, 78% of drivers believe that texting and emailing while driving are dangerous.

  • 89% of drivers support laws against texting, typing and emailing while driving
  • 68% strongly support such a law

However:

  • 36% admit to reading a text message or email while driving in the last 30 days
  • 9% admit that they do it fairly regularly
  • 27% like to multi-task and admit to driving and typing a text or email at the same time over the past 30 days
  • Less than 50% support the federal government regulating “non-driving-related in-vehicle technologies” for being considered a distraction.

Age definitely has an impact on how distracted driving is perceived. Drivers over the age of 60 are the least likely to engage in these types of activities, while drivers aged 25-39 are most likely to talk on the phone, text and email, and view these activities as acceptable. Younger drivers, ages 16-18, also believe it’s acceptable to text, email and use the internet while driving.

Speeding, Red Lights and Drowsy Driving

A behind-the-wheel feeling of apathy toward speeding, running red lights and drowsy driving is also apparent in drivers, according to results from the study.

While 76% consider it unacceptable to drive more than 15 mph over the speed limit and 30% view speeding on the highway as a serious threat to their safety, 46% said they have driven 15 mph or more over the speed limit in the past 30 days and 14% said they do it fairly regularly. In addition, 95% consider driving 10 mph over the speed limit in a school zone unacceptable, but only 44% view speeding on residential streets as a very serious threat.

In terms of how drivers handle red lights, 94% consider it unacceptable to drive through a red light in cases where they could have stopped, but 33% admit to running a red in the past 30 days and 2% do it regularly.

As far as driving while sleep deprived, 96% consider it unacceptable to drive when they are so tired that they have trouble keeping their eyes open, but 29% reported that they had driven while struggling to stay awake in the past 30 days, 20% said they had done this more than once, and 2% do it on a regular basis.

Click on the link to read more about the AAA 2014 Traffic Safety Culture Index.

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Hialeah Police Crack Down on Drivers with Fake Insurance Cards

On February 12, 2015, authorities in Hialeah, Hialeah Gardens, and Medley clamped down on drivers carrying fake insurance cards, according to a news report on CBS Miami.

Officers stopped randomly-selected cars and asked drivers for their license, registration, and proof of insurance. Police then contacted the insurance companies to verify coverage. If the card turned out to be fraudulent, the driver was arrested.

Two drivers were arrested for carrying fake insurance cards, while 27 other arrests were made for various traffic violations.

According to the National Insurance Crime Bureau, the use of fake insurance cards has become a national epidemic.  “If you have a printer and you have a computer, you can download a fake insurance card and it looks real,” said Hialeah Police spokesman Carl Zogby.

The use of fake or fraudulent insurance cards affects legal Florida drivers when an uninsured driver is involved in a motor vehicle accident, according to the report. The costs incurred in these accidents are eventually passed on to legal drivers in the form of higher insurance rates.

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

Special Investigation Units Deliver ROI in Insurance Fraud Campaigns

With the cost of insurance fraud estimated to be a staggering $80 to $120 billion annually, insurance companies cannot afford to take an arbitrary approach in their overall fraud deterrence strategy.

According to a recent article in Property Casualty 360°, taking a closer look at the special investigations unit (SIU) is a proven strategy for effective fraud management. Three key objectives in SIU management are outlined below.

1. Know Ideal Roles for SIU Personnel

Knowing the skill set of SIU team members is often the best way to ensure that employees are up to the task of contributing to overall strategic implementation. Traditionally, investigators and insurance/business professionals make up the SIU industry, but each have separate strengths they can bring to the table.

Investigators with law-enforcement or investigative backgrounds are generally well suited to the front lines.  They typically understand the dynamics of fraud, can manage efficient investigations, and possess the critical interview skills that can lead to confessions. On the other hand, business-minded professionals can be effective in supervisory positions to triage cases, help analyze and assess, and make innovative data-driven decision to support your strategy.

2. Develop the SIU Departmental Strategy

Even though industry benchmarks can be a source in the design and operation of the SIU, the effects of insurance fraud are not universal due to differences in insurance companies’ products and applications/claims processes. Therefore, the most critical point in an SIU’s fraud strategy should involve data collection and analysis.

Data collection includes information like the number of investigators that are needed, how many cases they get, which cases are assigned, what technology is being used, as well as spending and budgets.  The data analysis can then determine if the right measurement systems are in place, and whether SIU metrics are being analyzed in a way that best adjusts to the company’s overall fraud strategy and efforts to maximize return on investment.

3. Capitalize on the SIU’s Power of Deterrence

Deterrence is a potent weapon in fighting fraud, but because many insurers are focused on projecting an image of simplicity and speed in the claims process, consumers may think companies are ignoring what is going on behind the scenes. Insurers are advised to balance the message that they are nabbing scammers while not appearing to deny claims unreasonably.

The article suggests that insurers create a dedicated webpage on the corporate website devoted to SIU efforts, starting with a description of what the SIU is and does. Special Investigation Unit success stories, including news of campaigns with state and national law-enforcement agencies, can demonstrate how SIU actions are helping to minimize increases in customers’ insurance premiums.

The goal is to communicate to the marketplace that there is a vetting process, that fraudsters are not getting away with their crimes, and that the company is trying to protect customers.

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Filed under Insurance Fraud

Cuban Crime Rings behind Florida Staged Accident Fraud

Originally intended to provide refuge to those fleeing Cuba’s Castro regime, the Cuban Adjustment Act of 1966 has enabled a thriving Cuban criminal network to expand from South Florida throughout the country and take hold without legal recourse. A recent three-part series by the Sun Sentinel, which examines the prevalence of this illegal activity, reveals that the cost to American businesses and taxpayers exceeds $2 billion over the past 20 years.

The story found Cuban criminals often work in rings that specialize in non-violent economic crimes such as credit card fraud, cargo theft, Medicare fraud, and insurance fraud through staged auto accidents. Frequently, they make their money, move it to Cuba, and return to the U.S. when more money needs to be made.

One massive auto insurance fraud ring with more than 100 participants—most of whom were Cuban—exemplifies just how easy it is for these groups to pull off the crime and get away with it because of their special immigration status.

In this particular case, 21 clinics in Palm Beach and Miami-Dade counties were involved in $18 million worth of fraud. Recruits found participants to smash cars with sledgehammers and stage vehicle accidents. Participants were then sent to the identified clinics that billed injury claims to auto insurance companies for treatment of their fake maladies.

It was discovered that the accused ringleaders were Cuban immigrants who were returning to Cuba on a weekly basis. Millions of dollars stayed in Cuba, apparently used to purchase properties and support family there, as IRS agent Pamela Martin testified at a court hearing last year.

After the FBI started to bust the fraud ring and make arrests, five main organizers fled back to Cuba, evading capture.

According to Fred Burkhardt, who is a South Florida auto-insurance industry fraud investigator from the National Insurance Crime Bureau (NICB), the small-scale outfits of a decade ago have evolved and become very sophisticated and organized.

“Someone is sitting back with a strategy, figuring out where the clinics will be, where the patients will come from,” he said. “There’s a structure involved. There are specific duties that people have.”

Staging auto accidents to defraud insurance companies basically started in Miami in the late 1990s, the Sun Sentinel reported. By 2007, the crime has progressed to other Florida cities like Fort Myers, Tampa, Orlando and Jacksonville, Burkhardt said.

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Filed under Insurance Fraud

Google May Be on the Verge of Selling Auto Insurance in the U.S.

There has been much speculation of late surrounding Google and whether the online giant will soon be entering the U.S. auto insurance market to sell policies online. The tech giant is expected to facilitate insurance sales from existing insurers, in a role similar to that of an insurance agent, rather than becoming an actual insurance company.

Google has been offering online auto insurance in the United Kingdom for the past two years via Google Compare (google.co.uk), which also enables users to comparison shop for credit card offers, travel insurance and mortgages, according to an Insurance Journal article on January 9.

The signs have certainly been pointing in that direction, the article said.

  1. A post in the New York Times technology blog ‘Bits’ reported that Google entered a partnership with CompareNow.com, a site which compares auto insurance quotes from fully licensed insurance providers. On-site users, who fill out one simple form, can then buy a policy online, by phone or through a local agent.
  2. Another indication recently came from Forrester Research analyst Ellen Carney who said in her blog that Google’s online auto insurance shopper—Google Compare Auto Insurance Services Inc.—has been licensed to sell insurance in at least 26 states with authorized carriers including Dairyland, MetLife, Mercury, Permanent General Assurance, Viking Insurance, and Workmen’s.
  3. Carney reported that Google may also be working with CoverHound, a site that provides online quotes for numerous insurance companies including Hartford, esurance, 21st Century, Travelers, Safeco, National General, Progressive, Foremost, Plymouth Rock, and more.

She also believes a launch could happen later this quarter, starting in California, and rolling out to Illinois, Pennsylvania and Texas, even though the pilot program has supposedly been delayed before.

Despite results from a survey by TransUnion last year that found online shopping for auto insurance rates declined about 3 percent in the 12 months ending February 2014 compared to a year earlier, industry analysts believe that Google could still make a dent in the market.

Global research by Accenture found that 67 percent of insurance customers said they would consider buying insurance products from organizations other than the insurers themselves.  In addition, 23 percent indicated that they would consider buying from online service providers such as Google and Amazon.

Google Inc. does own GoogleCompare.com; however, the site is not operational, according to Insurance Journal.  The publication also received no response from Google as expected. The tech company has previously told Reuters and the Wall Street Journal that it does not comment on speculation.

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Filed under Fla. Stat. 627.736 (2012)

Separate PIP Fraud Cases Lead to Three Jacksonville Arrests

Three individuals from the Jacksonville area, who have allegedly been involved in personal injury protection (PIP) fraud schemes, have recently been arrested by the Division of Insurance Fraud (DIF) in separate cases.

The first individual apprehended was Walter Juarez Lopez, who owned and operated Therapy Diagnostic Tech Medical.  According to DIF, the 42-year old helped organize staged accidents in 2011, in which participants were sent to his clinic as well as Arlington Rehabilitation Services. His role in the scheme resulted in more than $32,000 in fraudulent claims, DIF said.

Also arrested in November was Jose Burgos who organized a fake crash for insurance money in 2012.  The 40-year old, who sent participants to One Touch Therapy Center, was tied to more than $31,000 in false claims, DIF reported.

Last but not least, Edwin Edgardo Martinez-Rodriguez, 46, was also nabbed for his role as a staged accident organizer.  In 2012, he organized a fake accident that resulted in more than $16,000 in false claims made by Gate Parkway Diagnostic Center and Wellness Rehab Services, LLC, according to DIF.

Fraudulent claims were submitted to several insurance companies including Direct General, Esurance, GEICO, Infinity, Progressive, State Farm and Travelers.

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Filed under Insurance Fraud

Boca Raton Medical Billing Company Members Indicted in Ohio Fraud

Seven people and a Florida medical billing company were indicted on December 17, 2014 for their roles in a multi-million dollar health care fraud conspiracy involving a controversial form of chiropractic manipulation, according to a news release by the U.S. Attorney’s Office for the Northern District of Ohio.

Members of the fraud scheme indicted are:

  • Physicians Surgical Group (PSG) of Boca Raton, Fla.
  • Christopher Liva, 36, of Boca Raton
  • Edward Liva, 64, father of Christopher Liva, based in Boca Raton
  • Carolyn Via, 51, of Boca Raton
  • Mark Fritz, age not provided, of Coral Springs
  • Three other medical professionals from Northeast Ohio

The Livas and Via owned PSG and were also part owners of Shaker Heights Surgical Center (SHSC), located in Ohio.  Fritz was chief financial officer at PSG.

The U.S. Attorney for the Northern District of Ohio alleged that, from 2007-2010, the defendants deceived various private insurance companies, bilking them out of millions of dollars on behalf of patients who underwent manipulations under anesthesia, a risky treatment that is normally reserved for those who have not responded to more conservative chiropractic treatment.  The procedure is classified as surgery by the American Medical Association, according to the indictment.

In order to defraud the insurance companies, the defendants disregarded actual diagnoses, created fake diagnoses, submitted false billing claims, and represented that the procedures were performed by medical doctors, when in fact they were performed by chiropractors.

Additionally, the indicted parties marketed SHSC and the experimental manipulation procedure to chiropractors in Ohio. Chiropractors were paid a flat fee of $4,000 for each patient they referred to SHSC, and the clinic waived patients’ co-pays and deductibles.  The clinic then typically submitted three types of claims to the insurance companies—for professional fees, facility fees, and fees for anesthesia services.

The Livas, Fritz, PSG, and the three Ohio medical professionals are charged with one count each of conspiracy, wire fraud, health care fraud, and money laundering.  The Livas and Via each face an additional count of money laundering.

Prosecutors are also seeking to seize property derived from the criminal conspiracy, including two properties in Boca Raton, money, a watch, and 4.18-karat diamond stud earrings.

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Filed under Insurance Fraud