Tag Archives: Staged accidents

Fraudulent PIP Billings of $80K Lead to Fort Lauderdale Arrests

Three Fort Lauderdale residents—Claudio Boyett, Leslie Sanchez Martinez and Claudia Hoy—were arrested for participating in a staged accident that resulted in the submission of $80,000 in fraudulent PIP claims, according to Florida Chief Financial Officer Jeff Atwater.

The three participants allegedly staged an accident involving a U-Haul truck, which hit a parked Dodge Caravan carrying eight occupants. Fraudulent claims were then filed with multiple clinics across South Florida. More arrests are expected in the case.

In other PIP fraud news across the state, David Torres was convicted for his work as a recruiter on behalf of the Indian Rehabilitation Center in Jacksonville. He was charged with eight counts involving a staged accident. Torres was ordered to repay $109,000 in restitution to eight insurance companies, and will serve five years in jail.

“PIP fraud schemes drive up auto insurance rates for all Floridians, which is why we are working day and night to prevent it from happening in the future and hold the fraudsters who have broken the law accountable,” said CFO Atwater.

The Florida Department of Financial Services reports that it has made almost 2,000 PIP fraud arrests since early 2011. Convictions are up 17% for the current fiscal year, with a total of 1,225 to date.

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“Family & Friends” Staged Accident Ring Uncovered in Duval County

A couple faces 20 years in prison as a result of their participation in a PIP insurance fraud scheme which involved staging a car accident, and subsequently collecting money from the false insurance claims they filed.

Jose Alberto Velez, 30, and April Rosita Wynn, 23, were both convicted of knowingly participating in an intentional motor vehicle crash and four counts of false insurance claims, according to a news release issued by the Office of the State Attorney for the Fourth Judicial Circuit of Florida.

Their convictions stem from a staged car crash that happened in May 2012, the same year that the State Attorney’s Office (SAO) and the Division of Insurance Fraud (DIF) began investigating a series of questionable car accidents in Duval County.

Their investigation uncovered a larger Personal Injury Protection (PIP) insurance fraud scheme where nearly 100 individuals have been arrested over the past 18 months.

It was discovered that Velez and Wynn, who are now married, persuaded family and friends to participate in their staged car crashes. After the accidents, Velez, Wynn and their accomplices would go to designated rehabilitation clinics that would provide mock therapy for fictional injuries, and then file PIP claims through those clinics.

One of the ringleaders of the scheme, David Rodriguez Lopez, was sentenced to 15 years on charges of schemes to defraud over $50,000, false insurance claims over $100,000, and knowingly participating in an intentional motor vehicle crash. Other cases resulting from the investigation are currently pending.

Besides their present charges, Velez and Wynn are still awaiting other charges for allegedly staging additional accidents. They will be sentenced the week of July 28.

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Three Arrests Made in Connection to a Fort Lauderdale Staged Auto Crash

Three people in Fort Lauderdale have been arrested for their involvement in staging an auto accident in a church parking lot in order to collect $80,000 from an insurance company, a June 19 article in the Sun Sentinel said.

According to police records, Claudio Boyett, 44, Leslie Martinez, 45, and Claudia Hoy, 31, all of Fort Lauderdale, are accused of grand theft and insurance fraud. Boyett was arrested earlier this week while the other two were arrested last week.

A report from Florida’s Division of Insurance Fraud showed a U-Haul truck struck a Dodge Caravan in the parking lot of the Pare De Sufrir Church on August 7, 2012. Martinez was driving the Caravan, which had Hoy and six others as passengers. Boyett struck the van with the U-Haul he was driving, the report said.

After the accident, Martinez, Hoy and Boyett allegedly went for medical treatment and filed a personal injury protection claim with United Auto Insurance worth $80,000, according to insurance company investigators.

Officials from the insurance company said investigators found that one witness was offered $1,500 for the use of her Caravan; another acknowledged the accident was staged.

These arrests have come as a result of Operation Sledgehammer, the effort between the FBI and state authorities which launched three years ago to crack down on insurance fraud from staged auto accidents.

According to the story, investigators have found almost $20 million in illegal payouts and have charged almost 100 people in Broward, Palm Beach and Miami-Dade counties. Also, $5 million in restitution has been ordered to be paid back to insurers by some of those convicted.

These types of efforts have been making an impact in Florida, according to a study by the nonprofit National Insurance Crime Bureau. The organization has found fraudulent claims from staged crashes have actually been falling since Florida’s PIP reform has been enacted in the past two years, as our FL-PIP Blog reported in March.

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Another Staged Accident Story Reminds Drivers to be Alert to Florida Auto Insurance Scams

Florida State Rep. Jim Boyd, R-Bradenton, helped pass legislation in 2012 aimed at reducing the tremendous number of staged accidents and injuries in the state, and deter claims made after accidents in which victims had not even been present.

Once estimated as a billion-dollar industry in Florida due to the ease of receiving PIP payouts from insurance companies, Boyd’s changes helped strengthen requirements for medical evidence and stipulated that police reports list everyone involved, including all of the passengers.

Credited with reducing personal injury insurance costs and premiums, Boyd feels that the updated law put a dent in a serious problem where opportunistic scam artists still turn dents and dings into major injuries.

One such example of heavy-duty suspicions stemming from a marginal accident was featured in a recent Tom Lyons’ column in the Herald-Tribune.

In Lyons’ piece, a Sarasota retiree was supposedly involved in an accident when backing out of an on-street parking spot. This driver felt the accident was so small that he wasn’t even sure it happened. However, the driver of the other car claimed that he caused the collision and filed a police report. The retiree was issued a ticket.

He later found out from his insurance company that the woman driving the other car filed an insurance report claiming she and her passenger suffered trauma and were feeling pain in their neck, legs and back. The retiree says, “his insurance company is about to take a hit, but he’s not at all sure it is a legitimate one.”

Some unscrupulous staged accident rings rely on each other to carry out these scenarios to receive insurance reimbursement, according to the article. Although some parties face charges in the end, it isn’t easy to know when someone is faking an injury. It is even harder, as demonstrated in the retiree’s case, to prove the circumstances surrounding the injury are bogus.

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

Insurance Scammers Target Unsuspecting Drivers in Staged Auto Accidents

It could happen to anyone. A stopped driver waves you on and then slams into your car, causing an accident that looks like it’s your fault and has produced injuries.

A recent story on News4Jax.com revealed how insurance scammers did just that to two victims, both of whom found themselves in the midst of staged accidents either when driving in traffic or pulling out of a parking spot.

One of those victims was one of 80 targeted by a group of schemers, according to postal inspectors.  Total losses in this case came to $130,000.

Drivers who are involved in an accident that seems like it may have been staged are advised to make careful records. Although inspectors say these aren’t easy scams to avoid, they recommend documenting details—both the accident victims and any vehicles at the scene—with photos and video if possible.

The Coalition Against Insurance Fraud provides different scenarios that scammers typically use to stage auto accidents. The organization’s site also provides steps innocent drivers can take to prepare themselves and fight back.

One suggestion is that a driver count how many passengers are in the other car, get their names, phone numbers and driver’s licenses. Accident victims are also advised to get the other car’s license number, and to take cell phone photos of the damage caused to both cars, as well as the passengers in the other car.


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Three PIP Scammers Sentenced in Jacksonville Fraud Scheme

Three men, who staged car crashes and subsequently filed false Personal Injury Protection (PIP) claims through rehab clinics, were recently sentenced to multiple years in prison for their role in an insurance fraud scheme based in Jacksonville.

According to a news story on News4Jax.com, the defendants were described as “mid-level recruiters,” who were arrested as part of a larger scheme that investigators from the Division of Insurance Fraud and State Attorney’s Office first uncovered in 2012. More than 20 people were arrested as a result of this investigation.

The participants would fake accidents and then go to clinics that prosecutors say were owned by the organizers of this scheme. These clinics provided bogus treatment for non-existent injuries.

George Orlando Ortiz Jr., 33, was sentenced to 9½ years in prison. He pleaded guilty to four counts of committing a staged motor vehicle accident, false insurance claims and schemes to defraud.

Also getting sentences were Noylan Barreto, 21, who received a three-year prison term and 10 years probation on two counts of committing a staged motor vehicle accident and one count of false insurance claims, and Freddie Alberto Freytes, 43, who received six years in prison on two counts of committing a staged motor vehicle accident and three counts of false insurance claims.

Insurance companies ran up a tab of more than $150,000 in claims resulting from accidents involving Ortiz, Barreto and Freytes.

Ringleader David Rodriguez Lopez, who we wrote about in our FL-PIP blog on December 11, 2013, was convicted and sentenced to 15 years in prison on charges of: schemes to defraud over $50,000, filing false insurance claims totaling over $100,000, and helping stage a deliberate automobile accident.

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Florida Insurance Premiums May Reflect $100 per Policy in Fraud Costs

Insurance fraud costs U.S. consumers $80 billion annually, according to a recent news report by News4Jax.com. For Florida residents, insurance fraud takes $100 out of consumers’ pockets each year in the form of higher auto and other insurance premiums.

“Staged accidents have been a problem around Florida, especially in urban areas,” reports James Quiggle of the Coalition Against Insurance Fraud. “Sometimes you can arrest the lower level recruiters or fake patients and convince them that they need to rat out the ring members or leaders in order for liens.”

Arson is another common form of auto fraud, according to claims executives from Main Street America who were interviewed for the News4 story. The use of an accelerant in an auto fire, for example, is usually a good sign that fraud is involved.

Social media posts that indicate signs of potential fraud are also coming under close scrutiny by insurance adjusters and claims executives. In one instance, a “bedridden” claimant posted a social media update showing a recent whitewater rafting expedition.

The good news is that many criminals involved in auto insurance fraud and related forms of fraud are caught and brought to justice.

Click on the link to read the full article “Insurance fraud costing all of us $80 billion a year.”

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Operation Sledgehammer I-VI Arrests Climb to 92

Six participants in a staged automobile accident ring that operated between October 2006 and December 2012 were sentenced this week by U.S. District Judge Kenneth A. Marra, according to the U.S. Attorney’s Office for the Southern District of Florida.

Almost $10 million in restitution is sought from the six leading defendants, along with jail time followed by three years of supervised release.  The individuals sentenced include:

Elias Sebastian Munguia, 41, Miami clinic owner
- $3,491,516.93 in restitution and 102 months in prison

Yenisleydi Ramos, 26, West Palm Beach secretary
- $1,666,028.08 in restitution and 50 months in prison

Oscar Montiel Martinez, 34, Lake Worth staged-accident participant, recruiter and check casher
- $1,359,208.73 in restitution and 76 months in prison

Teresita Mena, 52, West Palm Beach staged-accident participant, recruiter and check casher
- $1,321,459.87 in restitution and 66 months in prison

Aleida Capdevila, 62, West Palm Beach clinic office worker
- $1,039,928.19 in restitution and 53 months in prison

Juan Francisco Avon, 62, Miami licensed massage therapist
- $866,801.60 in restitution and 38 months in prison

Amaury Tomas Contino, 30, a Lake Worth staged-accident recruiter, filed a guilty plea in the matter. He faces up to 20 years in prison for each of multiple counts, including mail fraud.

The elaborate automobile insurance fraud scheme involved staged accidents, followed by unnecessary or fraudulent medical treatments at clinics run by participating owners, including defendant Munguia. False insurance claims for medical services not needed or never provided were submitted for payment.

The scheme grew as the “true owners” of chiropractic clinics recruited individuals with the medical or chiropractic licenses required by the state of Florida to establish new clinics and act as “nominee owners.”  Ultimately the network grew to include 21 clinics.

The scheme worked so well for a while that additional participants were hired to launder the stream of cash generated from the false claims.

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Leading Forms of Auto Insurance Fraud

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.

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Parkland Chiropractor Pleads Guilty to Insurance Fraud in Staged Accident Ring

A Parkland chiropractor, who prosecutors said approved treatments for patients who fraudulently claimed they were victims of car accidents, pleaded guilty to five criminal charges in connection with an extensive staged-accident insurance fraud ring in South Florida, dubbed Operation Sledgehammer VI.

Court records show that Lawrence Schechtman, the 45-year old chiropractor who worked at clinics in Palm Springs and Miami, pleaded guilty to one count of mail fraud conspiracy and four counts of mail fraud, occurring between 2009 and 2012.

Co-conspirators in the scheme were found to have prescribed and bill for treatments that were unnecessary or never provided to the ‘victims’ who were sent to these clinics after the staged accidents. Complicit employees then submitted false claims to the insurance companies for payment.

According to an article in the Sun Sentinel on December 9, Schechtman is scheduled to be sentenced on March 3, 2014.  He could face time in prison and fines, in addition to paying restitution of between $1 million and $2.5 million.

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