Insurance Fraud Weekly ePort
Written and compiled by the Coalition Against Insurance Fraud.
LEGISLATION & REGULATION
* The Kansas legislature has ironed out minor differences on two fraud bills, and sent both measures to the governor for her signature. SB 114 will boost penalties for scams that steal more than $25,000. SB 208 will give the state fraud bureau criminal justice status, thus allowing the unit to obtain information from criminal history databases.
* The Maryland House passed a bill making it a specific crime to stage auto accidents. HB 1409 also would restrict access to police accident reports; this will help keep fraud rings from soliciting crash victims to file fraudulent claims. A Senate committee will hold a hearing on the bill this week. The coalition’s Howard Goldblatt sent written testimony to the committee. But the clock is ticking because the legislature adjourns for the year early next week.
* The Arizona legislature has passed a bill requiring a signed affidavit by anyone who files an auto theft report. SB 1043 is intended to help reduce burgeoning owner giveups—people dumping their vehicles for insurance money and falsely reporting the vehicles stolen. Some owners will think twice about reporting a fake theft if they have to sign a legal document that will haunt them in court, supporters say.
CRIMINAL CONVICTIONS
* A car passenger for one of the largest staged-accident rings in the history of Lowell, Mass. was convicted but will serve only two years suspended. Sokha Ngoun was involved in three setup crashes that paid out $116,000 in fake injury claims. In one crash, he was in a Volvo that was struck by a Nissan Maxima. Insurers paid out $25,000 in bogus injury claims. All three Volvo passengers made fabricated injury claims. A common thread was Eric Bonnette, the suspected driver in all three crashes. He drove for two runners, who recruited local residents to loan the crash cars and take part in the crashes, prosecutors say. The recruiters—or runners—allegedly met Bonnette in the parking lot of a local MacDonald’s, and showed him the car he was supposed to collide with. Bonnette followed the target vehicle out of the parking lot and banged into it, prosecutors allege.
* Orlando Rolon owned a crooked network of firms, including an illicit chiro clinic, that feasted off of auto insurers with $135,000 in bogus injury claims from crash victims. The Camden, N.J. man ran the Brotherhood Rehabilitation Clinic. It had no medical or chiro license, so Rolon and his girlfriend Erika Ramos made claims in the name of a dead chiro. Rolon had runners recruit patients by paying them $200-$300 each. The patients then were told to buy medical supplies from a firm called JOL&M and receive transport from OR Medical Support. Rolon owned those firms. The New Jersey Office of Insurance Fraud Prosecutor landed him four years in state prison, and Ramos received three years of probation.
* A former assistant school-district chief stole $56,000 from the district’s health plan by lying he was still married to his ex-wife so the plan would cover her. Rocco DiNapoli, formerly with a school district in the New York City area, divorced his wife in 1991 but the district paid for her healthcare until 2004. DiNapoli received five years of probation this week in exchange for a guilty plea.
CRIMINAL CHARGES
* The owner of a failing bed and breakfast torched the inn for insurance money by exploding aerosol bug bombs in his kitchen to make the arson seem like a accident, Washington prosecutors charge. The Seattle-area inn was in financial trouble. Owner James Oliver Burrows placed the bug bombs in a fryer and left the kitchen, prosecutors say. The aerosols exploded, spraying hot oil and fire around the kitchen. The blaze then spread throughout his inn. Burrows denies guilt: He put one bug bomb next to the deep fryer, and others on a shelf above the deep fryer. The wind probably blew through the windows and knocked the cans into the deep fryer, he insisted. But prosecutors challenge his explanations: Trees and vegetation would’ve blocked the wind. The kitchen windows also were closed that day, photos revealed, and there was no shelf above the fryers, they say. Burrows also forged invoices to back up an $11,000 claim for soap he said was ruined, prosecutors allege. He also made claims for injuries to his back, neck and shoulders incurred, he said, when he fell down the stairs while alerting guests about the fire. But firefighters received no injury reports onsite, prosecutors allege.
* Former pain and sports doc Patrick Fahey fed addicted patients large volumes of insurer-paid prescription narcotics, Oklahoma prosecutors charge. The Tulsa man prescribed some patients large doses of narcotics even though he knew other doctors had denied them narcotics, and that they were addicted or had overdosed, prosecutors allege. One patient received large doses of OxyContin, Percocet and three other drugs without any evidence of pain and little documentation, officials say. The patient later died from an overdose of Methadone. Another patient survived an overdose, but Fahey kept prescribing drugs until she overdosed on Methadone and other drugs eight days after visiting Fahey, prosecutors allege. An undercover officer allegedly obtained Oxy and other narcotics without a medical exam. She also told Fahey that she only had headaches and sleeplessness, and had obtained OxyContin illegally in the past, officials allege. Fahey faces numerous charges, but has disappeared.
* Ten South Florida residents allegedly bilked Medicare out of more than $5 million in bogus claims for durable medical equipment such as wheelchairs and costly infusion therapies for AIDS and HIV patients, officials charged Tuesday. Marisol Gonzalez Torres allegedly had a physician prescribe unneeded treatments to patients at an HIV clinic in Miami. She also allegedly had a medical assistant tamper with blood samples to justify the HIV/AIDS treatments, and inject patients with a salt solution instead of medicine. Suspected cohorts Armando Ramirez and Raul Rodriguez allegedly laundered insurance money and tried to bribe witnesses to lie to authorities. Infusion-therapy schemes are widespread in South Florida, officials say. Recruiters pay AIDS/HIV patients, often in homeless shelters, $100 to visit clinics for expensive injections that cost Medicare thousands of dollars each. Florida has far fewer AIDS/HIV cases than California or New York, but Florida providers have made three times more related claims than California and five times more than New York.
* A minor mold problem has become a major fraud problem for a mold cleanup firm. Travelers of Florida checked a lab-testing bill for a minor mold problem in the Vero Beach-area home closet of a client of cleanup firm Registry Services. The $2,987 bill included $500 for a test by a second firm. But that firm said it didn’t do the test, had worked for the firm only once in the last two years, and wasn’t even paid for that job. Red flags started flying, and Florida’s insurance fraud division is checking two other homes the firm cleaned up for nearly $15,600 in insurance billings.
* Guillermo Villasano sustained several head injuries from a vehicle crash while working for Horace Bell Honey Company in Deland, Fla. He received more than $43,000 in workers comp money, and in depositions denied he had worked since the accident. But surveillance video caught him working at another honey firm, the department of financial services charged Tuesday. Villasano allegedly used the name and Social Security number of his dead uncle, Miguel Villasario, to get jobs and workers comp money.
* East Chicago political insider Robert Cantrell illegally obtained health coverage for his adult children by convincing a friend to place them on her counseling firm’s health plan even though they weren’t employees, the feds charge. The alleged deal lasted more than five years. Cantrell and counseling firm owner Nancy Fromm allegedly traded favors. She bribed him to get her a contract with his public employer, the North Township Trustee’s Office, the feds say. The suspected insurance and contract scams were worth about $150,000 combined.
CIVIL SUITS
* Four insurers sold credit coverage for new vehicles but never reimbursed premiums as required by the contract, Texas prosecutors charge. Premiums were supposed to be refunded if the customer paid off the loan early, but American Heritage Life, Protective Life, Old United Life and Resource Life all refused to ante-up, the Texas AG charges. Any refunds could average about $222 per person, and $6 million overall.
ETC.
* Some New York body shops are complaining that auto insurers are unfairly steering customers to shops with the lowest estimates, according to news reports. One shop is suing Progressive Insurance for $40 million. Greg Coccaro of North State Custom in Bedford Hills says the insurer accused him of fraud and tried to strong-arm customers to use other body shops even though by law vehicle owners can use any body shop they want. Body shops also complain that insurers sometimes send a vehicle out to another body shop when customers bring the damaged vehicle into an insurer claims center. "It's not that we're pressuring customers," Victor Politzi of Progressive Insurance tells FOX23 News. "We like customers to use this because they like the service."
* Want to lock horns with swindlers in one of America’s most fraud-ridden states? Florida’s fraud division is seeking a director to head up the division’s operations, including the workers comp fraud unit. The director will oversee all policy, procedural and investigative priorities, and head up legislative initiatives. The director also will coordinate efforts with legislators, regulators, insurer SIUs, prosecutors and other fraud fighters. More information about the position is available at http://www.insurancefraud.org/floridajob.html
* Nearly one of 10 adult Brits admit they’ve made fraudulent insurance claims, a survey says. More than nine of 10 Brits say insurance fraud is a serious offense but only 14 percent would report someone for the crime. About one of five says “everyone” pads claims, and many believe the chances of getting caught are minimal, says the survey by information provider Experian. About 15 percent of adults say insurers aren’t doing enough to combat fraud, and half say they don’t know if insurers are doing anything at all.
QUOTE OF THE WEEK
"This is like cooking a rib roast. This is a huge case. And this is the fork test. When I find a significant violation and I know the case is done, I will say that."
— Albany County (N.Y.) Judge Stephen W. Herrick in refusing to end a fraud trial yesterday after defense attorneys complained of prosecutorial misconduct. On trial are five family members accused of staging 23 car crashes.
OTHER HEADLINES THIS WEEK
* Seattle therapist to pay feds $510,000 for billing fraud
* Florida mold restorer accused of inflating insurance bill
* California agent accused of pocketing $44K in premiums
* Skin doc accused of doing 20,000 fraudulent treatments
* Check casher accused of inflating robbery claim by $13K
MEETINGS & CONFERENCES
* June 13-15, 2007 — Fraud Education Conference
Orlando, FL (Florida Insurance Fraud Education Committee)
* June 19-22, 2007 — Health Care Fraud Schemes
Scottsdale, AZ (National Healthcare Anti-Fraud Association)
* June 21, 2007 — Board and Membership Meeting
Washington, DC (Coalition Against Insurance Fraud)
* July 23-24, 2007 — Advanced Fraud Investigation Seminar
San Diego, CA (National Association of Insurance Commissioners)
* September 9-12, 2007 — Annual Seminar & Expo on Insurance Fraud
Las Vegas, NV (International Association of Special Investigation Units)
* September 10-11, 2007 — Annual Meeting
Lisbon, Portugal (International Association of Insurance Fraud Agencies)
For more info, visit online events.
© 2007, The Coalition Against Insurance Fraud, Inc. Not to be reproduced or re-transmitted without written permission. Members of the Coalition Against Insurance Fraud may share this newsletter freely with others within their organization. Published each Friday except for Thanksgiving week and the week between Christmas and New Years.
