Tag Archives: Staged accidents

Jacksonville PIP Fraud Scheme Involved Staged Auto Accidents

Roxana Suarez La Rosa was arrested for PIP fraud, according to an April 28 release by the Florida Department of Financial Services’ Division of Insurance Fraud.

Suarez La Rosa owned and operated the Saint Jose Injury Center in Jacksonville that was behind a string of staged auto accidents, according to witnesses. Crash participants were asked to sign for medical services they never received, which were then billed to insurance companies. More than 50 insurance claims were generated in the alleged scam. Billing amounts were not disclosed.

If convicted, Suarez La Rosa faces up to 50 years in prison on racketeering and fraud charges. Additional cases against the medical clinic are pending.

The Office of the State Attorney in the 4th Judicial Circuit of Florida, which covers Duval, Clay and Nassau Counties, is handling the case.

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Filed under Insurance Fraud

Tampa Area $40K Tow Truck Fraud Leads to Four Arrests

On March 25, 2015, the Florida Department of Financial Services’ Division of Insurance Fraud announced the arrest of four Tampa Bay area men on charges of insurance fraud.  The men reportedly collected more than $40,000 in insurance payments after causing intentional damage to two tow trucks owned by Jimmy’s Towing and Recovery (Jimmy’s).

Leonard Bosi, 50, of Dunedin, Andrew Gentile, 25, of Palm Harbor, Edgar Gentile, 42, of Seminole, and Matthew Gentile, 23, of Dunedin face two charges each of insurance fraud over $25,000.

The first of two events occurred in Clearwater on June 17, 2014 when one of the tow trucks was involved in an accident. After being returned to Jimmy’s, the truck was reportedly hit by another truck multiple times until it was rendered inoperable.  An insurance claim was paid to Jimmy’s and shared among the four suspects.

Several days later on June 20, 2014, a second tow truck from Jimmy’s caught on fire while out on assignment. The flames were extinguished by an onlooker, and the truck was returned to Jimmy’s. Upon its return to the shop, additional damage was reportedly inflicted on the engine to the point that it could not be repaired.  An insurance claim was again paid to Jimmy’s and distributed among the four suspects.

The suspects were released on $10,000 bond each on the same day as their arrest. They face jail terms of up to 15 years.

The case will be prosecuted by the office of the Sixth Judicial Circuit State Attorney.

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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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The High Cost of Auto Insurance Fraud

Auto insurance fraud hits drivers’ wallets hard, not only with the apparent increase in premiums, but also indirectly, through higher costs that are eventually passed down to consumers. A recent story on Fox Business reported about the heavy toll this type of fraud takes on many Americans.

According to the National Insurance Crime Bureau’s (NICB) 2013 report, 78,024 suspected cases of auto insurance fraud were reported nationwide in 2012, an increase of 12.7% from 2011 to 2012. Those numbers helped to raise a three-year total—from 2010 through 2012—to more than 209,000 questionable claims (QCs).

Out of all the types of insurance fraud, auto insurance makes up the largest piece of the fraud pie, the NICB says. There were 4.5 times more questionable auto insurance claims than homeowners’ personal property QC’s (17,183), and almost 17.5 times more than the third highest category—workers’ compensation, including employers’ liability.

Industry studies have estimated that almost a quarter of the bodily injury claims related to auto accidents are false.  In addition, there is almost a 10 percent fraud rate for property and casualty claims made against auto insurance.

This adds up to about $200-$300 per year in extra costs on each auto insurance premium.  But, these are just considered the direct costs.  As far as indirect costs, the Texas Department of Insurance estimates that they add up to about $1,000 per family each year.  These costs are the portion of inflated expenses that businesses have to pay to insurers as a result fraudulent crime. This portion translates into increased costs of goods and services that are passed along to consumers.

In addition, hard fraud, or when the insurable event is fabricated outright or a staged accident, appears to be on the rise and feeds into auxiliary hazards of auto insurance fraud.  Because staged car crashes often exploit people who happen to be in the wrong place at the wrong time, these victims unintentionally become involved in the accidents or in the subsequent series of events, which can have severe consequences such as injury or even death.

According to the Fox News story, there have been numerous incidents where staged accidents have spiraled out of control, resulting in critical injuries and fatalities.  Although the instigators of these types of accidents have been prosecuted, it does not end the motivation to engage in auto insurance fraud.

Overall, the Coalition Against Insurance Fraud estimates that the total cost of fraudulent claims is in the range of $80 billion annually. The group has found that claims tend to rise during difficult economic times, which was evident during the recent recession.

The NICB has a toll free hotline to report fraud anonymously for further investigation.  The number is 1-800-835-6422 or 1-800-TEL-NICB.

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

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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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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Staged Accident Organizer Arrested in Orlando

A 41-year old from Orlando, who was at the center of an alleged staged vehicle accident which occurred in 2013, was recently apprehended by the Florida Division of Insurance Fraud (DIF).

Jean Severe was arrested in November for organizing the fake crash.  According to DIF, participants were sent to Florida Chiro & Rehab Center for unnecessary medical treatment of their bogus injuries.  The scheme resulted in more than $6,000 in false claims filed with insurers Allstate and GEICO.

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Filed under Insurance Fraud