Author Archives: Michael A. Rosenberg, Esq.

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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Filed under Uncategorized

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