Tag Archives: PIP fraud

Fort Lauderdale residents arrested for PIP Fraud

The Florida Department of Financial Services’ Division of Insurance Fraud announced on March 19, 2015 the arrest of two Fort Lauderdale Residents for PIP fraud following a staged accident. Kendrick Callins and Lashaunda Gibbs were arrested for staging auto accident, patient brokering and personal injury protection insurance fraud.

The Division of Insurance Fraud, Federal Bureau of Investigation, Broward County Sheriff’s office and the Fort Lauderdale Police Department investigation revealed that Callins and Gibbs organized and participated in a staged accident on September 22, 2012, in Fort Lauderdale. The staged accident involved participants, recruited by Callins and Gibbs, who intentionally drove a rented U-Haul truck into a passenger vehicle occupied by arrestees. The arrestees submitted fraudulent insurance claims which were paid by the insurers. Callins and Gibbs each face a maximum sentence of 25 years.

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Filed under Insurance Fraud

Cape Coral Cracks Down on Drivers without Insurance

Representatives from the National Insurance Crime Bureau (NICB), the local police department, and 17 state and national auto insurance carriers conducted an insurance crackdown in Cape Coral, Fla. on Tuesday, March 17. More than 35 police officers split into three groups, all on the lookout for uninsured motorists and motorists with fraudulent insurance.

The officers pulled over speeders and drivers not wearing their seatbelts, and then checked whether they had valid proof of insurance in hand. Drivers who were stopped for speeding or being unbuckled, but had valid paperwork available, could be let go with a warning. At the end of the day, officers had given out 230 written warnings and 68 uniform traffic citations, 15 of which were for no proof of insurance.

“We try to do an operation like this at least once a year,” Cape Coral Police Department spokesman Sgt. Dana Coston said. While the officers pulled over drivers, the NICB and dozens of insurance representatives were back at the police station, working directly with the officers to verify coverage.

A common scheme, Sgt. Coston explained, is for an individual to apply for auto coverage, get the paperwork, cancel the insurance, and then use the now-invalid insurance card as proof of coverage. Officers usually have to rely on state data, which is often outdated, to verify coverage, but because officers had “real time” access to insurance representatives on Tuesday, they could confirm on the spot if the insurance coverage was valid.

Sgt. Coston was heartened by the results of the day’s work. “Seeing that [only] about 5 percent of the drivers had any type of problem when stopped today is very encouraging. That’s probably one of the highest rates of compliance we’ve seen in years.”

Coston went on to explain that, because it is likely that at least some of those ticketed will show up in court with their missing paperwork, “the rate of compliance is actually even higher than the 95 percent we saw today.”

As for those who continue to drive without insurance or with fraudulent insurance? “They’ll get caught eventually, it’s just kind of rolling the dice,” said Cape Coral Police Sergeant Jon Kulko.

Cape Coral, Fla. is located on the Gulf Coast in Lee County, just south of Fort Myers.

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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)

Orlando Clinic Operators Arrested in PIP Fraud Scheme

Dr. Lherisson Domond, a Coconut Creek physician, fronted ownership of the Unity Pain and Injury Center clinic for most of 2012 in exchange for monthly payments of $1,500, according to the Florida Department of Financial Services.

Domond admitted that he agreed to be paid for the use of him name as owner of the unlicensed medical clinic. Further investigation revealed that Nesly Loute of Naples and Pierre Alex Herisse of Orlando actually managed the clinic’s operations.

In investigating Unity Pain and Injury Center, the Division of Insurance Fraud discovered that the clinic illegally provided medical treatment and physical therapy to individuals involved in automobile accidents. The clinic then billed the treatments to various insurance companies under the PIP coverage of patient insurance policies.

The three individuals face felony charges for fraud, operating an unlicensed clinic, and grand theft, all of which carry sentences of up to 30 years.

The Division of Insurance Fraud reports that it has made 249 PIP arrests since July 1, 2014.

Click on the link to read the news announcement about the Unity Pain and Injury Center.

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Filed under Insurance Fraud, Licensing

Nine Arrested in Miami PIP Fraud Schemes

There has been no shortage of auto insurance fraud in Miami of late as Chief Financial Officer Jeff Atwater announced the arrests of nine individuals who have been charged in connection with eight separate cases of personal injury protection (PIP) fraud schemes.

According to Atwater’s announcement, the Division of Insurance Fraud (DIF) uncovered seven staged vehicle accidents in which the scammers collectively filed more than $242,000 in fraudulent billings to 11 different insurance carriers. Staged accident participants were referred to at least 13 different South Florida medical clinics.

The nine were arrested for acting in one or more of these capacities:

  • The organizer or staged accident recruiter;
  • The patient broker who encouraged participants to seek post-accident medical treatment for bogus injuries;
  • The licensed medical provider who agreed to sign off on falsified medical documents in exchange for payment billed under PIP insurance benefits.

The investigation into these cases remains ongoing and additional arrests are expected, DIF said.

“While their injuries may have been fake, PIP fraud is real and it is not a victimless crime,” CFO Atwater commented. “When insurance carriers absorb such high-dollar losses to fraud, we all pay in the form of higher insurance premiums. I’m thankful to our dedicated investigative team for shutting down this fraud ring.”

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Filed under Insurance Fraud

Cuban Crime Rings behind Florida Staged Accident Fraud

Originally intended to provide refuge to those fleeing Cuba’s Castro regime, the Cuban Adjustment Act of 1966 has enabled a thriving Cuban criminal network to expand from South Florida throughout the country and take hold without legal recourse. A recent three-part series by the Sun Sentinel, which examines the prevalence of this illegal activity, reveals that the cost to American businesses and taxpayers exceeds $2 billion over the past 20 years.

The story found Cuban criminals often work in rings that specialize in non-violent economic crimes such as credit card fraud, cargo theft, Medicare fraud, and insurance fraud through staged auto accidents. Frequently, they make their money, move it to Cuba, and return to the U.S. when more money needs to be made.

One massive auto insurance fraud ring with more than 100 participants—most of whom were Cuban—exemplifies just how easy it is for these groups to pull off the crime and get away with it because of their special immigration status.

In this particular case, 21 clinics in Palm Beach and Miami-Dade counties were involved in $18 million worth of fraud. Recruits found participants to smash cars with sledgehammers and stage vehicle accidents. Participants were then sent to the identified clinics that billed injury claims to auto insurance companies for treatment of their fake maladies.

It was discovered that the accused ringleaders were Cuban immigrants who were returning to Cuba on a weekly basis. Millions of dollars stayed in Cuba, apparently used to purchase properties and support family there, as IRS agent Pamela Martin testified at a court hearing last year.

After the FBI started to bust the fraud ring and make arrests, five main organizers fled back to Cuba, evading capture.

According to Fred Burkhardt, who is a South Florida auto-insurance industry fraud investigator from the National Insurance Crime Bureau (NICB), the small-scale outfits of a decade ago have evolved and become very sophisticated and organized.

“Someone is sitting back with a strategy, figuring out where the clinics will be, where the patients will come from,” he said. “There’s a structure involved. There are specific duties that people have.”

Staging auto accidents to defraud insurance companies basically started in Miami in the late 1990s, the Sun Sentinel reported. By 2007, the crime has progressed to other Florida cities like Fort Myers, Tampa, Orlando and Jacksonville, Burkhardt said.

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Filed under Insurance Fraud

Legislators Unlikely to Change Florida’s No-Fault Auto Insurance Law Right Now

Chief Financial Officer Jeff Atwater wants Florida’s legislators to continue to be patient before considering any rash actions that would change personal injury protection (PIP) coverage in the state. That’s because a recent report released by the state Office of Insurance Regulation (OIR) shows that increases in fraudulent PIP claims have basically been stopped.

The Florida Department of Financial Services is attributing these results to the passage HB 119, effective January 1, 2013, which created some exclusions for coverage under PIP insurance and limited for non-emergency conditions. The amended No-Fault Law excluded PIP reimbursements to massage therapists and acupuncturists, and also required individuals involved in car crashes to seek treatment within 14 days of a motor vehicle accident. PIP allows up to $10,000 in benefits for emergency medical conditions, but places a $2,500 cap on non-emergency conditions. It is mandatory for all Florida drivers to carry PIP.

According to a story in the Sun-Sentinel on January 7, the law set benchmarks for insurance carriers to lower rates. The OIR report showed that from 2011 through September 2014, the average medical cost paid through PIP claims dropped 14 percent statewide.  In South Florida, a hotspot of fraudulent PIP activity, the average payment decreased 28.7 percent, the article reported.

However, it is thought that these numbers are too preliminary and do not show the full impact of the law, yet.

House Insurance & Banking Chairman John Wood, R-Winter Haven, noted in the article that he would be “surprised if there was ‘major’ PIP legislation before the issue is settled in court.”

Senate Banking and Insurance Chairwoman Lizbeth Benacquisto, R-Fort Myers, said that she is still reviewing the OIR report, and likes to ensure that if changes are made, they have “a very positive effect on policyholders and our constituents.”

The annual legislative session begins in March.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud