On January 22, 2015, The Florida Department of Financial Services’ Division of Insurance Fraud (DIF) announced the arrest of Noel Ruiz of Miami and Alberto B. Franco of Hialeah. The two individuals owned unlicensed clinics and were involved in a “straw ownership” scheme that defrauded numerous insurance companies which resulted in more than $650,000 in financial losses, according to a press release from DIF.
As a result of an investigation led by DIF, it was discovered that Franco and Ruiz both failed to carry the proper licensing required to own a clinic. The two allegedly used a “straw owner” to bypass Florida’s licensing requirements. A “straw owner” is a person who owns a business or property on someone else’s behalf, portraying legal ownership of the property or business all while leaving the actual owner of the business off the books.
The investigation further revealed that Ruiz was the actual owner of Rehab and Wellness Inc. and that Franco was the actual owner of Magic Hands Rehabilitation Center Inc. The investigation also revealed that the straw owners of the clinic were not aware that Ruiz submitted numerous claims to insurance companies for fictitious rehabilitative services totaling over $361,880. Franco also submitted numerous claims to insurance companies for illegitimate rehabilitative services totaling $297,677.
Ruiz and Franco were both arrested on January 14, 2016 on charges of operating an unlicensed clinic, insurance fraud, grand theft, and an organized scheme to defraud. Both individuals can face up to 30 years in prison.
Click here to read press release.
On January 5, 2016, Kevin McCarty resigned as Florida’s top insurance regulator and stated that his departure would be effective May 2, 2016, according to Bradenton Herald. McCarty, 56, is the state’s Insurance Commissioner who decides how much homeowners pay for their property insurance. He was appointed to the position in 2003 by Governor Jeb Bush and has served under the leadership of three Governors since then. Under Bush tenure, McCarty helped navigate the state through a series of devastating hurricanes while seeking to protect elderly consumers from fraudulent merchants of insurance products.
After many years of navigating the capital’s perilous political landscape McCarty was viewed as vulnerable after Governor Rick Scott took the oath as governor for the second time. Scott’s office already had a replacement in mind: Ron Henderson, a Louisiana insurance official who was being promoted by Fred Karlinsky, a Tallahassee Lobbyist for insurance interests and Scott supporter. Consumer groups rallied to McCarty’s side as a result of the controversy following Scott’s removal of Gerald Bailey as the state’s top law enforcement official.
McCarty is the state’s first appointed insurance commissioner and director of the state Office of Insurance Regulation. His successor must win the support of both Scott and Jeff Atwater, Chief Financial Officer, in a vote by the Governor and Cabinet.
McCarty’s departure leaves an empty position, one of the most challenging jobs in state government due to the sensitivity surrounding the cost and availability of insurance in a state vulnerable to hurricanes and insurance fraud.
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On November 6, 2015, four former employees of the now defunct healthcare provider Health Care Solutions Network Inc. (HCSN) were sentenced for their role in a scheme to fraudulently bill Medicare and Florida Medicaid for approximately $63 million. U.S. District Judge Robert N. Scola of the Southern District of Florida sentenced Roger Rousseau, 73, of Miami, the former medical director of HCSN to192 months in prison: Liliana Marks, 49, of Homestead, former therapist was sentenced for 72 months in prison; therapist Doris Crabtree, 63, of Miami, and Anglea Salafia, 68, of Miami Beach, were each sentenced to 60 months in prison. All four defendants were sentenced to three years of supervised release.
On August 24, 2015, a Miami jury convicted all four defendants of conspiracy to commit healthcare fraud and Rousseau was additionally convicted of two counts of healthcare fraud. To date a total of 22 defendants have been charged and convicted for their roles in the HCSN scheme, which focused on performing services that were not medically necessary and were never provided.
The HCSN scheme provided intensive mental health services to Medicare and Medicaid beneficiaries in Miami and North Carolina from 2004 to 2011. HCSN paid kickbacks to assisted living facilities owners and operators in Miami who, in exchange, referred beneficiaries to HCSN. In order to support the scheme, Rousseau signed, forged, and altered medical records and Crabtree, Salafia, and Mark also falsified medical records. As a result of the scheme, HCSN submitted approximately $63.7 million in false and fraudulent claims to Medicare, and received payments totaling approximately $28 million on those claims.
Please click here to read the U.S. Department of Justice Press release.
Zian Scott Snyder, 29, and Alicia Maria Hill, 26, of Cantonment, Florida have been charged with scheme to defraud, insurance fraud, grand theft, and conspiracy to commit insurance fraud by the Florida Division of Insurance Fraud (DIF) for alleged false claims over a custom-made engagement ring.
According to an article on NorthEscambia.com, the couple filed a false claim on a $15,000 ring that Hill claimed she lost swimming in the Gulf. She was also recorded claiming she lost the ring on a boat in the Gulf. Four days after filing the claim with her insurance company, Hill took the ring to Marks and Morgan Jewelry store in Ft. Walton Beach to have the ring repaired.. The custom-made ring was identified by photographs taken at the Ft. Walton Beach jewelry store.
Around the same time the couple filed the insurance claim, the store manager of the Jewelry store told authorities she witnessed the ring for sale on Craigslist and that she was positive that it was the same ring in question because she was the one who custom made the ring. The couple told her that the ring had not been stolen, but was eaten by a dog and was later recovered.
A month after the couple filed the insurance claim, Hill called the insurance company to report that the ring had been recovered. The insurance company then advised that the ring or the check must be returned. Three days after Hill informed the insurance company of the recovery, she changed her story once again, stating that it was actually a different ring that was recovered.
The insurance company told state investigators that neither the ring nor the insurance proceeds were ever returned by the couple.
On October 13th, Janio and Jharildan “Harold” Vico were convicted of a total of 16 charges including 12 counts of mail fraud, two counts of money-laundering, conspiracy to commit money-laundering, and conspiracy to commit wire fraud. A federal jury deliberated for approximately two hours before finding the brothers guilty, according to a palmbeachpost.com article. The conviction arises out of the brothers’ ownership and operation of the V&V Rehabilitation Center, located on 10th Avenue North, Lake Worth, Florida, from 2009 until 2011. Janio and Jharildan Vico staged traffic accidents and then billed insurance companies for fake injuries, which were treated at their Lake Worth clinic. The scheme brought in approximately $3 million for the two brothers.
Assistant U.S. Attorney Ellen Cohen is seeking for the brothers to forfeit nearly $400,000 and homes they purchased with proceeds received from the fraud. The brothers can face up to a maximum sentence of 20-years for the most serious charges. The sentencing hearing is set for January 8, 2016.
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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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On August 13, 2015, The Florida Department of Financial Services Division of Insurance Fraud (DIF) announced multiple arrests related to a large scale personal injury protection fraud scheme across the Central Florida region.
According to the Orlando Business Journal, DIF and the Federal Bureau of Investigation (FBI) partnered to investigate two clinics, First Medical Rehab of Bradenton and Kirkman Family Chiropractic Care in Orlando. Their investigation led to the arrest of five people, arrest warrants issued for three additional people, and three related arrests in the Fort Myers area. Insurance carriers and former patients raised allegations of possible illegal activity happening at these two personal injury clinics.
The Kirkman Family Chiropractic investigation disclosed their plot of bypassing clinic licensure requirements set by the Agency for Health Care Administration. Co-conspirators solicited licensed chiropractors to serve as straw owners, or owners on paper only because licensed health care professionals can operate clinics without the necessity of an additional clinic license. To date, more than $100,000 in fraudulent claims have been paid by multiple insurance carriers.
The charges varied depending on each individual’s alleged role which included: patient brokering, conspiracy to commit patient brokering, false and fraudulent insurance claims, solicitation, grand theft, organized scheme to defraud and conspiracy to commit insurance fraud. All individuals arrested, if convicted can face anywhere from five to 30 years in prison as well as face fines as large as $10,000.
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