Chiropractic Clinics Attempt to Defraud GEICO

On October 5, 2015, GEICO filed a lawsuit in federal court against Boston-based Big City Chiropractic & Sports Injury Clinic, according to a Law360 article. GEICO claims that Big City created a scheme to defraud the company out of, up to $1.1 million by overbilling for insurance payments and paying kickbacks to patients for cooperating with the scheme.

In the lawsuit, GEICO alleges that Dr. Brian Elias, Florida-based founder of Big City Chiropractic, and Karen Davis and Dr. Megan Bratton of Massachusetts were involved in the scheme to defraud GEICO. GEICO alleges that the trio earned substantial profits by using unskilled services and staff at their clinic while billing them as services performed by licensed staff. The lawsuit claims that that the trio overused chiropractic practices and submitted inflated demands for insurance payments based on false and deceptive bills and records.

GEICO states in the complaint, that it has already paid at least $110,000 of about $517,000 in submitted bills to Big City. The clinic has billed GEICO so far this year at an estimated annual rate of $600,000.

Big City Chiropractic & Sports Injury is the Massachusetts-based arm of an interstate network of chiropractic clinics operated by Elias.

GEICO is seeking damages including the money unfairly paid to Big City, the costs of handling the investigation, and treble damages under the Racketeer Influenced and Corrupt Organizations Act and Massachusetts consumer protection law.

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Filed under Fla. Stat. 627.736 (2008)

Five Naples Residents Charged with Insurance Fraud

Five residents from Naples have been charged with auto insurance fraud, according to an article published by The five individuals were involved in the operation of chiropractic clinics that defrauded several automobile insurance companies from June 2013 to February 2015.

According to the U.S. Attorney’s Office in the Middle District of Florida the following individuals were charged with insurance fraud and each charge carries a maximum penalty of 20 years:

Garry Joseph, 36, was charged with conspiracy to commit mail fraud.

Nesly Loute, 51, was charged with conspiracy to commit mail fraud.

Wisler Cyrius, 34, was charged with conspiracy to commit mail fraud and conspiracy to commit money laundering.

Anouce Toussaint, 32, was charged with conspiracy to commit mail fraud.

Sijames Melus, 32, was charged with conspiracy to commit mail fraud.

According to the article, Joseph and Melus paid licensed healthcare practitioners to allow their names to be used in official documents and submitted claims of services to accident victims treated at the clinics. The clinics involved with Joseph and Melus are Parkway Medical and Rehab LLC and Collier Chiropractic Center. In addition, Cyrius, Loute, and Toussaint are charged with filling fraudulent claims at Tamiami Pain and Rehab LLC and First Choice Pain and Rehab Inc. According to the article, Cyrius, Loute, and Toussaint attempted to recruit other participants in staged car accidents in exchange for money.

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Filed under Florida

Eleventh Circuit Declines 7th GEICO Car Crash Trial

On Tuesday September 22, 2015, the Eleventh Circuit declined to allow a seventh trial in a GEICO General Insurance Co. coverage dispute, rejecting an argument by the estate of a car crash victim that the insurer wasn’t prejudiced by the exclusion of decisions reached after it denied coverage, according to a Law360 article.

The court refused to rehear the decision vacating a Florida federal court judgment in favor of Esperanza Garcia, who represents the estate of a women killed in a car accident with a GEICO-insured driver in a car rented by someone else. The court found that GEICO should have been able to tell the jury that the coverage decision preceding Garcia’s bad faith suit was overturned because of changes in Florida case law impacting whether the driver has the rental agency’s consent to drive the car.

The court stated that “the exclusion substantially prejudiced GEICO,” and “a jury would no doubt find it exceedingly relevant that Florida law on implied consent was in a state of flux, or that a panel of Florida’s First District Court of Appeal and a United States District Judge for the Southern District of Florida supported GEICO’s conclusion regarding implied consent.”

Garcia petitioned the court for a panel rehearing in early September, asking the Eleventh Circuit that GEICO could not have been hindered by the judge’s order excluding legal rulings reached after the company denied coverage, arguing that those rulings were based on previous, cumulative decisions, making their exclusion harmless.

The Eleventh Circuit rejected all of Garcia’s requests in an order on September 22, 2015.

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Filed under Fla. Stat. 627.736 (2008)

Florida Towns Plagued by Windshield Damage Scams

Residents of Duval County are being advised to remain vigilant for criminals soliciting residents to participate in a scam to defraud insurance companies.

News Channel WJXT of Jacksonville, Florida has reported an increase in the number of residents calling their newsroom to report potential scammers going door-to-door asking for a copy of their insurance policy.

According to the Coalition Against Insurance Fraud, this scam involves windshield repair shops convincing unsuspecting residents to replace their windshield even though little to no damage exists.  These repair shops often offer incentives for residents in the form of cash or other gifts.

Insurance professionals have seen a marked increase in the number of windshield replacement claims over the past 5 years.  Gil Smith, News Channel WJXT’s crime and safety analyst recommends that if you do have a damaged windshield to contact your insurance company first.  Further, he recommends that you only seek a vendor that your insurance company approves.

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Filed under Florida, Windshield Damage Scam

Executive Admits to Stealing $860,000 from Coastal Orthopedics

David Brooks, 44, of Ohio plead guilty to mail fraud and faces up to 20 years in federal prison, according to a press release from the U.S. Attorney’s Office of the Middle District of Florida. According to a plea agreement reached in October 2011, Brooks was hired as a Financial Accounting Manager at Costal Orthopedics and Sports Medicine of Southwest Florida located in Bradenton, Florida. During Brooks’ employment at Costal he was convicted of theft, money laundering, and other fraud-related offenses in Ohio. Once Coastal learned of the Ohio charges in June 2013, Coastal fired Brooks and began a review of its books and records.

Coastal found that between January 2012 and June 19, 2013 Brooks has used company accounts to purchase more than $700,000 in American Express gift cards, which he used for personal expenses, including legal fees associated with his Ohio criminal case. In addition, Brooks diverted payroll funds to himself above his normal salary. In order to cover his wrong doing, Brooks altered the company’s books and records.

According to the U.S. Attorney’s Office, Brooks used ten different gift cards to purchase a 2012 Jeep Liberty. The gift cards were shipped directly to Brooks at Coastal on March 15, 2012, and four days later he used them to purchase the vehicle.

In total, Brooks defrauded Costal of $858,883 and of this total he used $702,091.60 to purchase the gift cards for his own personal use and the remaining amount was diverted to his salary.

Click here for press release.

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Filed under Middle District of Florida

Broward County Debates Rules for Ride-Sharing Companies

On September 17, 2015, Broward County commissioners debated on the proposed ordinance to clear a path for Transportation Network Companies (TNC) such as Uber Technologies Inc. However, ride-sharing services and supports will have to wait for the Commission’s vote on October 13, according to a Law360 article.

The Commissioners debated over complex set of rules ranging from insurance to vehicle inspection standards to monitoring airport trips for TNC’s. On September 11, 2015, Attorney Mark J. Stempler of Becker & Poliakoff sent a letter to county leaders warning that the proposed amendments would result in significant conflicts with state insurance requirements on for-hire vehicles. Stempler represents Yellow Cab of Broward and international transportation provider Go Airport Shuttle. Stempler criticized the counties’ proposals to allow a six-month moratorium on state laws for TNC applications and to leave monitoring of TNC drivers’ insurance coverage in the companies’ hands.

“At a minimum, Broward’s proposed ordinance amendments places safety and welfare of the public at increased risk,” he said.

During the Commission meeting, the commissioners rejected a proposal to all TNCs to have only a regional agent and not a physical office in South Florida and requiring that all TNCs must enter a service agreement with Fort Lauderdale International Airport and Port Everglades.

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Filed under Transportation Network Companies

Crash Victims Lose Bad Faith Claim at Eleventh Circuit Court

According to an August 28, 2015, Law360 article, The Eleventh Circuit Court determined that Clarendon National Insurance Company did not act in bad faith when protecting two of its insureds from a $750,000 excess judgment arising from a car accident in 2006. The court found no evidence to suggest such a claim. Carlos Mesa filed claims against the owner, Jary A. Martinez, and driver of the vehicle, Cesar A. Vega Zalaya.

Mesa stated that Clarendon passed up an opportunity to settle with him as well as failed to advise him on ways to avoid an excess judgment. However, the court found that Clarendon National Insurance Company did act in good faith since the company identified the claimants and reached a settlement of $20,000 per accident policy limit soon after realizing that the $10,000 per person limit was not enough to cover the claimant’s damages.

The court sided with the insurance company and not Carlos Mesa, stating that Clarendon may have not been as proactive in advising its insureds of settlement opportunities but not to the level of bad faith.

“Clarendon’s duty of good faith requires that it investigate the facts and give fair consideration to the prospect of a settlement offer that is reasonable under the circumstances, which it did here”, the court said.

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Filed under Eleventh Circuit Court