A Jacksonville, Florida, woman was arrested in connection with an auto insurance fraud scheme that occurred in North Carolina—her place of residence at the time. Stacy Lasondo Jackson, 39, was charged with 10 counts each of insurance fraud and obtaining property by false pretense, according to a newscast on WRAL TV.
Investigators with North Carolina’s Department of Insurance found that Jackson was paid several thousand dollars from a variety of insurance companies after filing fraudulent insurance claims. The claims were made for damage to her automobile and motorcycle between January and May of 2013. Authorities believe the damage never happened or was reported more than once.
This past December, Jackson was arrested on similar charges in Florida, investigators said. She has been extradited to North Carolina and placed in the Cumberland County jail under a $10,000 bond.
Five people were arrested for their involvement in a Personal Injury Protection (PIP) insurance scam as part of an undercover investigation that began in June 2013, Miami-Dade State Attorney Katherine Fernandez Rundle and City of Miami Police Chief Manuel Orosa jointly announced. The five involved in the racket worked at Central Therapy Center, 2742 S.W. 8th Street in Miami, which has now been shut down.
The investigation, called Operation on the Run, started with a tip about people who staged car accidents and then perpetrated PIP fraud. According to the State Attorney’s Office (SAO), an undercover Miami detective used a manufactured crash report to gain access to the fraudulent activity at the clinic and obtained information about how the clinic worked, how much money he could make, and how much additional money he could receive for recruiting new patients.
The detective received a cursory medical examination and superficial medical therapy on site, but also had to sign numerous blank medical forms, which led to insurance being charged for approximately 44 therapy treatment claims submitted for dates between July through September 2013. Overall, Central Therapy Center billed the insurance company a total of $20,488.00 for injuries that never really happened.
Charged with organizing, planning or participating in a staged accident; false and fraudulent insurance claims; grand theft; organized scheme to defraud; and patient brokering were: Rodolfo Rodriguez Gallo Blan, Vivian Caridad Garcia and Carlos A. Sanchez.
Yunaisky Machado Madruga and Belkys Hernandez were accused of false and fraudulent insurance claims; grand theft; and organized scheme to defraud.
“These types of clinics are the core elements of any ongoing PIP insurance fraud scam. They exist to steal, not heal,” State Attorney Katherine Fernandez Rundle said. “Those individuals who hope to snatch some cash from the pockets of Dade’s insured motorists should know that the Miami Police Department and my insurance fraud prosecutors are out to get you. Find a new line of business or prepare for jail.”
It’s no secret there’s a constant battle to find and prosecute people trying to get away with insurance fraud, which costs billions of dollars each year and drives up premiums for consumers.
As a result, there has been a concerted effort by several state legislatures and governing bodies to help thwart fraudsters and their crimes, according to a news release issued by auto insurance provider GEICO.
Nancy Pierce, GEICO regional vice president and vice chair of the National Insurance Crime Bureau’s (NICB) Board of Governors, said, “GEICO puts a lot of resources into investigating and stopping staged accidents, exaggerated injuries, inflated medical bills and other acts of insurance fraud that inflate costs for consumers.”
The company detects, deters and defeats insurance fraud and theft through its Special Investigation Unit.
“That said, there’s a lot that must happen in the fight against fraud at the legislative level, so it’s encouraging to see positive momentum in that direction this year,” she explained.
The Coalition Against Insurance Fraud said that six states in particular have proposed vital pieces of legislation in 2014 that would have a significant impact on deterring insurance fraud:
- Colorado: Increasing fraud penalties to a higher-level felony is the subject of proposed legislation.
- Maryland: Giving prosecutors greater flexibility in trial venues for fraud suspects is being supported by the state insurance administration.
- Michigan: The creation of a state auto-fraud agency is proposed to strengthen the state’s no-fault law, identify questionable clinics and improve the fight against fraud.
- Minnesota: A variety of new anti-fraud bills are under review by an anti-fraud task force, including greater sharing of fraud-related information between insurers and law enforcement. The imposition of civil fines in addition to criminal charges is also being considered.
- New Jersey: Three new bills that will restrict outsider access to crash reports, expand fraud-fighters information exchange, and make it a crime for drivers to lie about where a vehicle is garaged are all under review.
- New York: A multi-faceted anti-fraud agenda targets dishonest clinics, staged-crash networks, and fraudulent medical-equipment providers.
“While these proposals wouldn’t eliminate fraud entirely in these states, they would be significant steps in the right direction,” said Ryan West, vice president of GEICO’s claims home office. “We’re pleased that state bodies across the country are putting the fight against insurance fraud on the agenda and trying to implement changes that would result in lower premiums for consumers.”
Additional information and resources on theft and fraud awareness are available through the NICB.
Leonardo F. Marquez Garcia of Miami and Dayleann Marie Vallejo-Ruiz of Orlando were recently arrested on charges of PIP insurance fraud.
More arrests are expected in the ongoing investigation by the Florida Department of Financial Services’ Division of Insurance Fraud, CFO Jeff Atwater announced.
Investigators found that Garcia would allegedly perform ‘initial examinations’ on victims of vehicle crashes, and then refer his patients to the Injury Rehabilitation Center, a clinic owned and operated by Vallejo-Ruiz.
Vallejo-Ruiz, a licensed massage therapist, would then have patients sign blank treatment forms which were later submitted to the insurance company to pay for treatment that was never provided. Allstate Insurance Company was billed for the alleged medical treatments supposedly provided between February 3 and March 16, 2012, on two crash victims.
Garcia also submitted his requests for payment for his initial examinations on behalf of Global Rehabilitation Center, Inc., in Miami Lakes. However, it was discovered that Garcia—an Area of Critical Needs Doctor—was not licensed to practice medicine at that facility because it was not an Area of Critical Needs clinic. Garcia was subsequently charged with the unlicensed practice of medicine for operating outside the scope of his license.
The Orange County State Attorney’s Office is prosecuting the case. Each defendant stands to face up to 15-20 years in prison if convicted.
A Greenacres woman was arrested for insurance fraud involving her car that she reported stolen in 2012.
Palm Beach County court records show that Lindela Edmonds faces charges of insurance fraud and making a false report of a non-existent crime. She was arrested on January 15.
According to West Palm Beach police, the 44-year old Edmonds pawned her 2007 Toyota Camry at the pawn shop, Queen of Pawns, on February 17, 2012 and received $5,500 for the transaction. The next day, she went to the police and reported her car stolen from a parking lot in the 3100 block of N. Jog Road.
After filing the police report, she filed a loss of vehicle claim with GEICO and collected $12,326 from the insurance company. But that isn’t the end of the story.
The Queen of Pawns wanted to sell the car because Edmonds had not returned for it a year later. It was then that police discovered the vehicle was listed as stolen. The pawn transaction receipt is dated the day before Edmonds reported her car stolen, along with a copy of her driver’s license and thumb print.
In addition, the notarized insurance claim is signed by Edmonds. Ironically, her signature appears beneath a warning: “anybody who knowingly defrauds an insurer by using false information is guilty of a felony in the third degree,” the Sun-Sentinel reported.
Edmonds was booked at the Palm Beach County Jail on January 16 and released on $3,000 bond.
Isabel Medina, the owner and operator of Merfi Corp., pleaded guilty to conspiracy to commit health care fraud before U.S. District Judge Ursula Ungaro of the Southern District of Florida. The 49-year old Miami resident was tied to several fraud schemes that totaled more than $20 million.
Merfi was a medical clinic that employed physicians, physician assistants and other medical professionals who were authorized to write prescriptions for home health care services. According to court documents, Medina and her co-conspirators channeled those prescriptions and other pertinent medical documentation to area home health agencies, including Flores Home Health Care, and patient recruiters in return for kickbacks and bribes.
As previously reported in our blog on December 4, it was discovered that Flores Home Health actually operated for the sole purpose of billing the Medicare program for expensive physical therapy and home health care services that were not medically necessary or were not provided, similar to what was found with the other home health care agencies’ operations.
Medina has acknowledged her involvement in the fraudulent schemes. She could receive a maximum penalty of 10 years in prison. Sentencing has been scheduled for March 14, 2014.
Jeff Atwater, Florida’s Chief Financial Officer, is one of the 10 top candidates for president of Florida Atlantic University (FAU). The winning candidate is expected to be named by January 17, 2014.
As readers of this blog know, Atwater, 55, oversees Florida’s risk management and insurance programs. His office is responsible for the licensing and oversight of insurance agents and agencies, as well as insurance fraud investigations. Workers’ compensation is also managed by the CFO’s office.
Atwater was elected to the House of Representatives in 2000 and the Florida Senate in 2002. In 2008 he was selected by his fellow senators to serve as Senate President. He was elected Florida’s Chief Financial Officer on November 2, 2010, and sworn into office on January 4, 2011. He holds a bachelor’s degree in finance and an MBA from the University of Florida.
He is viewed as a leading contender, along with former U.S. senator George LeMieux, who now serves as Board Chairman at law firm Gunster, Yoakley & Stewart, P.A. The two candidates are among 10 who will be interviewed in greater depth by the search committee this week. Eight additional candidates come from the academic community in states outside of Florida.
If Atwater is selected, his Florida Cabinet seat as CFO opens up.
Former FAU President Mary Jane Saunders resigned in May 2013 following several months of controversy. She returned to a faculty position and was assigned a special research project to assess the feasibility of developing a physician’s assistant program at FAU.
In an article titled “6 Shadiest Auto Insurance Fraud Schemes,” financial publisher Bankrate.com identifies the most popular scams behind false claims submitted to auto insurance carriers:
Staged Accidents. The NICB reports that staged accidents grew by 102 percent between 2008 and 2011. As readers of this blog know, staged accidents are one of the leading forms of auto insurance fraud in South Florida.
Insurance Agent Fraud. Some unscrupulous insurance agents steal insurance premiums that insureds think are being applied to the purchase of auto insurance, warns the Coalition Against Insurance Fraud. The best defense here is to work with nationally recognized insurance carriers and their agents.
Auto Premium Evasion. Insureds also try to defraud their auto insurance carriers. Common techniques include giving a false residential address in a lower-cost insurance zone, or failing to identify new drivers in the family.
Counterfeit Air Bags. Cars that are repaired following an accident, as well as used cars being resold, may make false claims about the presence of functioning air bags. Insurers and purchasers think they are paying for safe air bags, but find out too late that this is not the case.
Windshield Replacement. Glass company representatives who approach auto owners on an unsolicited basis and offer to replace a car’s windshield in exchange for insurance information frequently do an inferior job while also planning to use the insurance policy data to submit false claims.
Tow Truck Fraud. Independent tow trucks that cruise streets and highways looking for accident victims may leave the driver with unexpectedly high towing fees while towing cars to lots in dangerous neighborhoods.
U.S. insurance fraud overall is estimated to cost $80 billion annually, according to the Florida Department of Financial Services, ultimately increasing premium costs for insureds and carriers.
The National Insurance Crime Bureau (NICB) recently released an analysis on questionable claims submitted by NICB member insurance companies from 2010 to 2012. Questionable claims (QCs) are those claims that NICB member insurance companies submit to the NICB for closer review and possible investigation. The NICB report analyzes questionable claims by loss city, core-based statistical area, policy type, loss type, and referral reasons.
The report revealed a shocking 23 percent spike in the number of questionable claims submitted in Florida from 2010 to 2012, rising from 8,723 in 2010 to 10,693 in 2012.
Miami generated the most QCs in Florida in 2012, with 2,309 QCs submitted to the NICB. Orlando generated the next highest level (877), followed by Tampa (690), Jacksonville (637), and Hialeah (361). The most frequent types of loss were personal injury protection (PIP), bodily injury, other automobile, collision, and property damage.
The NICB reminds readers that QCs represent a small portion of overall claims. Of the 70.5 million in total national claims cited by NICB in 2012, only 116,268—or 0.164 percent were—questionable.
Florida Chief Financial Officer Jeff Atwater has taken measures to reduce the amount of insurance related crime in the state of Florida. In 2010, he launched Operation Sledgehammer—a multi-agency investigation into insurance fraud in the state of Florida. Despite state government’s attempts to crack down on insurance fraud, Florida still has the fifth highest insurance rates in the nation.
Click on the link to read the full NICB Report on Florida Questionable Claims.
A licensed chiropractor, who was working at Gate Parkway Diagnostics Center (GPDC) in Fort Myers, Fla., was recently arrested for scheming to defraud several insurance carriers, according to an announcement by Florida’s Chief Financial Officer Jeff Atwater.
Investigators from the Florida Department of Financial Services’ Division of Insurance Fraud found that Harold John Pompey, 68, was completing false paperwork to support fraudulent claims being filed for PIP insurance benefits to be paid to GPDC. He was charged with one count of a first degree scheme to defraud and six counts of false and fraudulent insurance claims. Bond was set at $210,021.
According to the announcement, GPDC was apparently operating as a legitimate diagnostics center. Test results made at the center then provided the means for other PIP clinics in Jacksonville to commit fraud, including a clinic that Pompey worked at previously, One Touch Therapy Corporation. This network also opened connections for others to participate in similar schemes to defraud insurance companies.
A search warrant uncovered that GPDC filed for 514 patients from October 2011 through December 2012, at which time Pompey was listed as the designated chiropractor on more than 300 of those files.
In order to justify massage therapy or chiropractic care, participants in the scheme had to demonstrate that they were suffering from legitimate injuries, which often required a radiological diagnosis. Tests performed at GDPC allowed for Pompey and others to make the false diagnoses and cash into the $10,000 available under a participant’s PIP coverage. Participants in the scheme were coached by recruiters, who instructed them on how to fake their ailments without getting noticed by the insurance company.