Author Archives: Michael A. Rosenberg, Esq.

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

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

Tampa Area $40K Tow Truck Fraud Leads to Four Arrests

On March 25, 2015, the Florida Department of Financial Services’ Division of Insurance Fraud announced the arrest of four Tampa Bay area men on charges of insurance fraud.  The men reportedly collected more than $40,000 in insurance payments after causing intentional damage to two tow trucks owned by Jimmy’s Towing and Recovery (Jimmy’s).

Leonard Bosi, 50, of Dunedin, Andrew Gentile, 25, of Palm Harbor, Edgar Gentile, 42, of Seminole, and Matthew Gentile, 23, of Dunedin face two charges each of insurance fraud over $25,000.

The first of two events occurred in Clearwater on June 17, 2014 when one of the tow trucks was involved in an accident. After being returned to Jimmy’s, the truck was reportedly hit by another truck multiple times until it was rendered inoperable.  An insurance claim was paid to Jimmy’s and shared among the four suspects.

Several days later on June 20, 2014, a second tow truck from Jimmy’s caught on fire while out on assignment. The flames were extinguished by an onlooker, and the truck was returned to Jimmy’s. Upon its return to the shop, additional damage was reportedly inflicted on the engine to the point that it could not be repaired.  An insurance claim was again paid to Jimmy’s and distributed among the four suspects.

The suspects were released on $10,000 bond each on the same day as their arrest. They face jail terms of up to 15 years.

The case will be prosecuted by the office of the Sixth Judicial Circuit State Attorney.

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Filed under Insurance Fraud

The 11th Judicial Circuit Court Issues Key Ruling in Health Care Clinic Licensure Case

On March 10, 2015, the Eleventh Judicial Circuit in and for Miami-Dade County issued a ruling in favor of Imperial Fire & Casualty Insurance in a mandatory licensing (House Bill 119) case. The Court found that the charges submitted for Personal Injury Protection (PIP) benefits to Imperial Fire & Casualty, to be unlawful and thus, noncompensable pursuant to Florida’s Motor Vehicle No-Fault Law.

Imperial Fire & Casualty issued a policy of automobile insurance to the Insured under which the Defendant, Magic Hands Solutions Inc. sought payment. Magic Hands Solutions operated as a medical clinic and allegedly rendered medical treatment to the Insured who was injured in an automobile accident. Subsequently, Magic Hands Solutions submitted charges for payment of PIP benefits to Imperial Fire & Casualty. Magic Hands Solutions was advised that the claim submitted for PIP benefits was not payable because the clinic was not properly licensed pursuant to Section 627.736, Florida Statutes (2013).

In 2012, the Legislature required mandatory licensing for all clinics holding an exempt status, whether by issuance of Certificate of Exemption or self-determined, in order for clinics to receive reimbursement pursuant to the “PIP Statute.” Hence, a clinic must be licensed under Part X, Chapter 400 to receive reimbursement for PIP benefits, unless it qualifies for an exception listed in Section 627.736(5)(h).

The Court found that the Magic Hands Solutions being wholly owned by a license massage therapist does not qualify for any of the exceptions delineated in §627.736(5)(h)(1)-(6) and was required to obtain a Health Care Clinic license as a condition precedent to receiving reimbursement of PIP benefits.

As a result of Magic Hands Solutions’ failure to obtain a Health Care Clinic License, the Court found that the charges submitted were unlawful and thus, noncompensable pursuant to Florida’s Motor Vehicle No-Fault Law and that Imperial Fire & Casualty.

Imperial Fire & Casualty Insurance Company vs. Magic Hands Solution Inc., Case No. 2014-2211 CC 24 (01) (Fla. 11th Circuit March 10, 2015).

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Filed under Fla. Stat. 627.736 (2008)

CFO Jeff Atwater Supports Fighting Fraud During 2015 Legislative Session

CFO Jeff Atwater supports the Health Care Clinic Proposed Legislation House Bill 1127 and Senate Bill 1306 that strengthen the Agency for Health Care Administration’s (“AHCA”) Health Care Clinic Act (“HCCA”). The proposed legislation:

  • Creates new certificate of exemption mandates for clinics exempted from mandatory licensure in HB 119 and criminal penalties for certain AHCA clinic violations;
  • Increases the number of crimes that may be investigated by the Division of Insurance Fraud;
  • Requires insurers to have SIU departments with specific requirements and establishes state oversight to help fight insurance fraud;
  • Creates additional criminal penalties for unlawful claims, whether paid or not.

Please click here to review the full summary.

For additional information you may visit http://www.flhouse.gov.

If you have any questions concerning this topic, please contact any member of the Roig Lawyers Insurance Services Group.

Contributing Authors:

MICHAEL A. ROSENBERG

MARK J. ROSE

MIGUEL R. ROURA

DENNIS LAROSA

 

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Filed under Fla. Stat. 627.736 (2008)

Florida Leads the U.S. in Fraud and Related Complaints

Florida sweeps the nation, but not for an enviable title. The Federal Trade Commission (FTC) put the Sunshine State at the top of its list for identity theft, fraud and related complaints.

The agency recently released its annual Consumer Sentinel Network Data Book, which compiled complaints made by consumers to the FTC, state and federal law enforcement agencies, national consumer protection organizations, and non-governmental organizations from January–December 2014. In addition to national statistics, the report also breaks down data by state and metropolitan area.

No matter how you slice it, Florida was the top source of complaints per capita both for identity theft, and fraud and other related complaints out of the 2,582,851 complaints entered into the Consumer Sentinel Network last year. Florida also held the top spot in 2013.

From 50 U.S. metropolitan areas, Florida has 14 identified fraud hotspots, based on the number of complaints per 100,000 people. They include:

  • Homosassa Springs (ranked #2)
  • Jacksonville (ranked #11)
  • Miami-Fort Lauderdale-West Palm Beach (ranked #14)
  • Palm Bay-Melbourne-Titusville (ranked #15)
  • North Port-Sarasota-Bradenton (ranked #17)
  • Tampa-St. Petersburg-Clearwater (ranked #18)
  • Deltona-Daytona Beach-Ormond Beach (ranked #19)
  • Punta Gorda (ranked #22)
  • Gainesville (ranked #24)
  • Sebastian-Vero Beach (ranked #26)
  • Port St. Lucie (ranked #28)
  • Orlando-Kissimmee-Sanford (ranked #30)
  • Pensacola-Ferry Pass-Brent (ranked #37)
  • Ocala (ranked #49)

The report also broke down the 30 worst categories of fraud reported nationwide. Identity theft was number one, followed by debt collection and imposter scams. Auto related fraud also made the top 10 on the list in 2014, coming in seventh.For those who investigate, detect and litigate fraudulent insurance claims, it’s not a big revelation that the lion’s share of fraudulent complaints transpire in Florida. A recent article in the Tampa Bay Times provides insight about factors that make the state so attractive for this type of activity:

  1. More temporary or transient residents having fewer strong connections to their communities.
  2. Resources stretched thin. Federal attention is focused on more critical issues, while state resources to investigate and prosecute fraud are limited to the most egregious cases.
  3. Fewer ways to scrutinize personal incomes due to no state income tax.
  4. A high concentration of seniors who receive Social Security, Medicare, and other retirement payments.

A reputation as a “second chance” state where many settle here to get back on track, but others still lapse into “old ways.” Al Scudieri, who spent 30 years as a special agent of the FBI, points out in the article, “Florida’s not only the third most populated, its population is different. I think we have a more affluent, elderly population. With a heavier concentration of those demographics in this state, they are the most susceptible.”

For an in-depth look at the statistics in Florida and nationwide, click on the link to view the FTC’s 2014 Consumer Sentinel Network Data Book.

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Filed under Insurance Fraud

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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