Category Archives: Fla. Stat. 627.736 (2008)

Staged Accident Recruiter from Palm Beach County Sentenced to Nine Years

A West Palm Beach man, who participated in an $8 million insurance fraud scam, was recently sentenced to nine years in prison for his role in the matter.

Joel Antonio Simon Ramirez, about whom we reported on our FL PIP Guide in April, helped recruit individuals to participate in staged automobile crashes. According to a story in the Palm Beach Post, the 30-year old worked together with three other chiropractors who filed fake insurance claims for the participants in these crashes. They operated the scheme out of clinics throughout Palm Beach County.

Following a six-week trial in April, all four defendants were found guilty of money laundering and mail fraud. Ramirez was also found guilty of helping stage the auto accidents.

By violating PIP insurance provisions, these schemes not only cost insurers but also hurt Florida drivers, federal prosecutors said. The conspiracy was part of a larger staged accident ring dubbed “Operation Sledgehammer” by investigators who discovered that many participants damaged vehicles using sledgehammers to give the appearance of a crash.

Nearly 60 people have been charged in federal court and almost 40 have been charged in state court as part of this sweeping investigation. Most have pleaded guilty to participating in staged accidents and then seeking treatment for bogus injuries. According to prosecutors, the five ringleaders fled to Cuba.

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Filed under Fla. Stat. 627.736 (2008), Insurance Fraud

Third DCA Rules for Insurer in GEICO v. Gables Insurance Recovery

In an opinion issued December 10, 2014 in the case of GEICO v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), the Third District Court of Appeal quashed a Circuit Court Appellate Division’s decision affirming final judgment in favor of Gables Insurance.

Lauzan, who was insured by GEICO, was injured in an automobile accident in 2008. After obtaining medical treatment, she assigned her GEICO policy benefits to All X-Ray Diagnostic Services, which subsequently assigned the benefits to Gables Insurance.

GEICO paid less than the amount it had been billed, and Gables Insurance filed a breach of contract action against GEICO. GEICO argued that Lauzan’s $10,000 PIP benefits had been exhausted and that it therefore had no further liability to Gables.

Deciding in GEICO’s favor, the Third District Court of Appeal held that the PIP statute does not require an insurer to pay more than the $10,000 limit in PIP coverage. Further, it does not require an insurer to “set aside” funds in anticipation of litigation. The Court noted that two other District Courts of Appeal have addressed the issue, holding that a showing of bad faith or impropriety on the part of the insurer is required before it can be held liable for benefits above the statutory limit.

Quoting a recent Fourth District Court of Appeal case, Northwoods v. State Farm, the Court concluded that once PIP benefits are exhausted, “an insurer has no further liability on unresolved, pending claims, absent bad faith in the handling of the claim by the insurance company.”

The case is GEICO Indemnity Co. v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), Case No. 3D13-2264 (Fla. 3rd DCA, December 10, 2014). Click on the link to read the court opinion.

The case cited is Northwoods Sports Medicine v. State Farm, 137 So. 3d 1049 (Fla. 4th DCA 2014).

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Filed under Case Law, Fla. Stat. 627.736 (2008)

Third DCA Upholds Ruling in PIP Case Millennium Radiology v. State Farm

On December 10, 2014, the Third District Court of Appeal affirmed a trial court ruling in Millennium Radiology (a/a/o Yesenia Arango) v. State Farm. In the case, Yesenia Arango’s $10,000 PIP policy limits were exhausted after a lawsuit was filed and served on State Farm by Millennium Radiology.

Roig Lawyers attorney Mark Rose had successfully argued in the lower court that paying out the entire $10,000 was a complete bar to additional claims against the policy of insurance, absent bad faith on the insurer’s part or the insurer’s payment of untimely submitted bills. Following the ruling, the case was certified as a question of great public importance to the Third District Court of Appeal.

The Third District Court of Appeal affirmed the ruling, finding that in an action brought by an assignor of PIP benefits that is founded upon a breach of contract, exhaustion of PIP benefits after a lawsuit is filed “absolves the insurer from any responsibility to pay an otherwise valid claim” where the exhaustion occurred (1) after the insurer paid an amount less than the provider feels was appropriate; (2) after a lawsuit has been served on the insurer; and (3) absent any bad faith by the insurer in the handling of the claims.

The case is Millennium Radiology v. State Farm, Case No. 3D12-3143 (Fla. 3rd DCA, December 10, 2014). Click on the link to view the court ruling.

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Filed under Case Law, Fla. Stat. 627.736 (2008)

Broward Staged Accident Results in Five PIP Fraud Arrests

Five individuals were recently arrested for their involvement in an alleged staged accident that took place in Broward in July 2012, according to an announcement by Florida Chief Financial Officer Jeff Atwater.

The five, who were arrested on grand theft and insurance fraud charges, carried out the alleged scam which resulted in fraudulent Personal Injury Protection (PIP) claims costing almost $40,000. Officials say a sixth individual is associated with the crime as well but has yet to be apprehended.

Investigators with the Department of Financial Services’ Division of Insurance Fraud (DIF) said that the five participated in the alleged crash as vehicle passengers. Shortly after the accident, they sought medical treatment at several South Florida clinics for bogus injuries. GEICO, Ocean Harbor and Gainsco insurance companies received fraudulent PIP claims as a result of the scam.

Those arrested include: Alfredo Romero, 66, of Hollywood; Alice Martinez, 27, of Pembroke Pines; and Jose Rodas, 33, Whitney Lopez, 25, and Mirna Madrid, 37, all of Fort Lauderdale. Alfredo Romero was also arrested in July 2014 for his role in another Broward County staged accident.

The cases will be prosecuted by the Broward State Attorney’s Office.

Mario Ruiz, 32, of Fort Lauderdale is the sixth individual currently wanted in connection with this crime. Anyone with information regarding his whereabouts is asked to contact DIF at 1-800-378-0445 or the Broward County Sheriff’s Office. Citizens may remain anonymous.

The Department of Financial Services to date has awarded almost $349,000 to nearly 60 citizens as part of its Anti-Fraud Reward Program. The program rewards 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 (2008), Insurance Fraud

Uninsured Drivers Caught by Broward Sheriff’s Fraudulent Insurance Verification Operation

Recently, some uninsured motorists driving in Broward County were in for a real revelation. On September 17, law enforcement officers worked traffic stops and were able to verify insurance coverage on-the-spot that day, much to the surprise of drivers.

The operation, known as the Fraudulent Insurance Verification Operation or FIVO, was conducted by the Broward Sheriff’s Office in conjunction with 30 insurance investigators who had instant access to their client databases. Setting up command central at the Tamarac BSO, the investigators provided real-time insurance information to police officers throughout the county for the day, according to a story in Tamarac Talk.

As a result of using this proactive strategy against insurance fraud, a total of 460 vehicle stops were conducted resulting in 563 citations and seven arrests, the Florida Department of Insurance Fraud reported.

Participating in FIVO were: Allstate, Assurant, Bristol West, Direct General, Esurance, Farmers, Gainsco, Geico, Imperial Fire, Infinity, Mapfre, Mercury, MetLife, National General, Nationwide, Security General, Sentry, State Farm, Travelers, USAA and Windhaven.

The Coalition Against Insurance Fraud says that Florida ranks fifth highest in the nation for uninsured motorists, which is estimated to cost each family about $950 a year. Under Florida law, anyone presenting a fraudulent proof of motor vehicle insurance has committed a third-degree felony.

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Filed under Fla. Stat. 627.736 (2008)

Adjusters Unsure about Questionable Claims Delve into Accident Data

In an earlier FL-PIP Blog post titled “Accident Reconstructionists assist Insurance Adjusters in Uncovering Staged Accidents,” we reported how insurance companies may hire accident reconstructionists to analyze car crash data from police reports, photographs, incident descriptions, and repair records to help determine whether car accident claims are real or if crashes were staged.

A recent article in Property Casualty 360° took a look at common scenarios where accident reconstructionists provide input to insurance adjusters. A summary appears below.

Car Accident Scenario #1

The driver of a vehicle said another car hit him from behind when he was slowing for traffic. The other car did not stop to exchange information.

The claims adjuster, who photographed the damage, was suspicious because he thought the damage looked old, the vehicle had recently been added to the policy, and the claimant received a check a few months earlier on a different vehicle but with a similar story.

The data that the accident reconstructionist researched for the different model years and their variants found that the top of the bumper of these vehicles was always at or below 22 inches. It was also determined that the damage showed no signs of paint transfer. Using this information, the accident reconstructionist was able to definitively conclude that the damage seen on the vehicle did not match the driver’s testimony. The claims adjuster denied the claim in full.

Car Accident Scenario #2

Minor contact between the rear of a Chevrolet Malibu and the front of a Hyundai Elantra was reported with the scuff on the Elantra noted to be consistent with a sliding motion. Further investigation was called in uncovering that the Malibu was in a previous crash severe enough to be sold with a salvage title. No other details, including repair records, were available. The driver of the Malibu claimed that in addition to a small dented area on the right rear corner of the rear bumper cover, there was damage to the Malibu’s trunk area, more prominent on the left side of the vehicle.

The accident reconstructionist had test data run on an Elantra from the same model from a 3-mile-per-hour corner impact test and was able to determine that the damage for the Elantra involved in the incident is consistent with a collision at less than 4.2-miles-per-hour. A Conservation of Momentum analysis was then performed and found that an impact resulting in a Delta-V (the change in velocity of the vehicle from its pre-impact, initial velocity, to its post-impact velocity) of 4.2 miles per hour for the Hyundai Elantra would result in a Delta-V of 3.5 miles per hour for the Chevrolet Malibu.

Test data was obtained from the Insurance Institute for Highway Safety (IIHS) for the Chevrolet Malibu and it was determined that the claim was for more severe damage than was sustained and that the damage was partially in an area that was too far away from the actual point of contact.

It was found that not all of the claimed damages to the Malibu could be attributed to contact from the Elantra, and the insurance company subsequently denied all costs associated with the underlying damages.

Every case is unique, and claims with injuries will be treated differently.

Click on the link to read the full article, “Is that auto accident staged? Here’s how to tell.”

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Filed under Fla. Stat. 627.736 (2008), Insurance Fraud

Chiropractor & Receptionist Connected to Operation Sledgehammer Get Prison Sentences

Convicted for their role in a massive insurance fraud ring involving staged accidents in South Florida, two more people were sentenced in Operation Sledgehammer last week.

Chiropractor Lawrence Schechtman from Parkland, whom we reported about on our FL-PIP Guide on December 19 when he pleaded guilty to mail fraud conspiracy and mail fraud, was sentenced to four years and four months in federal prison. In addition to his sentence, he was ordered by U.S. District Judge Kenneth Marra to pay more than $2.4 million in restitution.

According to federal prosecutors, Schechtman worked at clinics in Palm Springs and Miami, where he signed off on treatments for people who fraudulently claimed they were accident victims as part of the staged-accident ring which operated in several counties.

According to a story in the August 8 Sun-Sentinel, the 45-year old Schechtman, who suffers from heart and back problems, was granted a request to serve his confinement at the Federal Medical Center, a medical prison in North Carolina. Judge Marra gave the chiropractor two months to turn himself in and begin serving his term.

Another co-conspirator from Palm Springs was sentenced for her role in Operation Sledgehammer. Sircy Sacerio, also known as Sisi or Sircy Santos, received four years in federal prison by Judge Marra.

Under the terms of her sentence, the Palm Beach Post reported, the 31-year old reception and office assistant must also repay $1,146,824.26 and will have two years of supervised release following her time in prison.

She originally pleaded guilty to one count of conspiracy to commit mail fraud and five counts of mail fraud.

Part of the fraud activity in Operation Sledgehammer, which was recorded by investigators, included co-conspirators damaging vehicles with sledgehammers to give the appearance of a crash. The participants in the staged accidents would then go to clinics involved in the ring to receive bogus treatment which, according to the U.S. Attorney’s Office, brought in millions of dollar to chiropractors on false and fraudulent insurance claims. The scheme began around October 2006 and continued through December 2012.

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Filed under Fla. Stat. 627.736 (2008), Insurance Fraud