News

Owner of IHOPs in Ohio convicted of worker compensation premium fraud
October 22, 2014, Middleton Township, OH -- Though he had faced up to 40 years behind bars, the former owner of seven IHOP restaurants in northwest Ohio and Indiana was sentenced Tuesday to eight years in prison. Tarek Elkafrawi, 57, of Middleton Township near Perrysburg pleaded guilty July 3 to 53 counts contained in a federal indictment charging him with a series of criminal schemes between 2003 and 2012 intended to defraud the government, corporate IHOP, an insurance company, and his own employees of millions of dollars. He admitted to hiring in excess of 200 undocumented workers, giving some of them multiple identities so that they could work extra ...

Pet store owner in Las Vegas pleads guilty to arson, fraud and animal cruelty
October 21, 2014, Clark County, NV -- Gloria Eun Hye Lee, accused of setting fire to her pet shop to collect insurance money, pleaded guilty this morning to charges including first-degree arson, according to the Clark County District Attorney’s Office. Lee accepted a plea agreement, pleading guilty to one count of arson, one count of insurance fraud and one count of attempted cruelty to animals, officials said. Lee originally faced more than 30 counts related to the Jan. 27 fire at the Prince and Princess Pet Boutique at 6870 S. Rainbow Road. The store has since closed. Crews rescued 27 dogs from the fire, 25 of them puppies. The dogs, dubbed ...

Former executive of Houston hospital convicted of defrauding Medicare of $158M
October 21, 2014, Houston, TX -- The former president of a Houston hospital and three other employees have been convicted in a Medicare scheme to steal $158 million from the federal government. The Houston Chronicle reports Riverside Hospital ex-chief Earnest Gibson III faces up to 80 years in prison following Monday's conviction in federal court. His son was also found guilty in the scheme that prosecutors say billed the U.S. government for services that weren't provided. Prosecutors say fraud in the hospital's psychiatric division lasted between 2005 and 2012. They say taxpayers paid millions in hospital bills while patients watched television all day and some never even went ...

Social worker in North Carolina charged with selling Medicaid info to fraudster
October 21, 2014, Mecklenburg County, NC -- A Mecklenburg County social worker is accused by federal authorities of selling identifying information of federal Medicaid recipients to a man believed to have bilked the government out of more than $3 million. The Charlotte Observer reports a federal bill of information says Ieshia Hicks Watkins is charged with health care fraud conspiracy and receiving illegal kickbacks in connection with the two-year-scheme. Court records say Watkins conspired with a man who owned a non-profit provider of mental health and mentoring services. Records say no services were actually provided, and Watkins gathered DSS client information and sold it to the man in exchange ...

Wisconsin man charged with participating in OxyContin prescription drug ring
October 21, 2014, Greenfield, WI -- Chad Salefsky, 33, of Greenfield is among 34 people facing criminal charges for allegedly participating in a prescription fraud ring that used at least a dozen pharmacies in the county to obtain Oxycodone. The Drug Enforcement Administration led the investigation into the ring, which it reported also reached 10 other counties, including Waukesha and Ozaukee. In the last two years, the DEA alleges the ring obtained more than $300,000 of Oxycodone at street value, with several hundred fraudulent prescriptions. In a criminal complaint released Oct. 15, the DEA reported four ringleaders were creating the fraudulent prescriptions and recruiting others to fill them ...

Dermatologist in Chicago convicted in $2.6M false billing scheme
October 21, 2014, Chicago, IL -- A suburban Chicago dermatologist has been found guilty of defrauding Medicare and private health insurers of $2.6 million by submitting false claims for more than 800 patients. Dr. Robert Kolbusz (KOHL'-buz) was convicted Monday on wire fraud and mail fraud charges by a U.S. District Court jury. Prosecutors say Kolbusz falsely diagnosed patients with actinic keratosis, or sun-induced skin lesions that can potentially become cancerous. He then billed public and private health insurers for treatments that were ineffective and falsely documented. A patient testified she believed her freckles were being lightened. Kolbusz claimed he had destroyed approximately 491 pre-cancerous lesions. Kolbusz remains free on ...

Medicare open enrollment season offers opportunity for scammers
October 20, 2014, Washington, DC -- With Medicare open enrollment in full swing, it’s time to talk about protecting yourself from the crooks who use this period to steal from you. Medicare scams occur all the time, but the open-enrollment period is prime time for thieves to unleash their attempts to scam seniors. During open enrollment, which runs through Dec. 7, Medicare participants can change their health and prescription drug coverage for 2015. “For identity thieves, it’s open season,” AARP said. One of the most common tricks is for crooks to pose as employees from the Centers for Medicare & Medicaid Services, the federal agency that administers the Medicare program. A ...

Police officer in Connecticut charged with workers compensation fraud
October 20, 2014, New London, CT -- A former New London police officer was arrested today and charged with fraudulently collecting more than $50,000 in workers’ compensation benefits. David McElroy, 55, of 63 Hayward Ave., Colchester, was arrested by inspectors from the Office of the Chief State’s Attorney and charged with one count of workers’ compensation fraud, a felony punishable by up to 20 years in prison. According to the arrest warrant affidavit, McElroy underwent treatment from October 2013 to March 2014 for an injury he reported suffering in September 2013 while employed by the city of New London as a police officer. Surveillance conducted by the city’s workers’ compensation ...

Car dealer in Nebraska charged with filing phony auto damage claim
October 20, 2014, Lincoln, NE -- A 43-year-old Lincoln man faces up to 20 years in prison after police say he falsely reported car damage to his insurance company earlier this year. Prosecutors charged Elon Aguiar Oct. 7 with felony insurance fraud. Police arrested Aguiar the next day. Aguiar called GEICO Choice Insurance Co. Feb. 12, reporting that his insured 2011 Nissan Xterra rear-ended a 2010 Chevrolet Malibu, police said in court documents. GEICO investigated the claim and sent a special investigator to Aguiar's home in south Lincoln. The investigator determined Aguiar's insured SUV wasn't in the accident that day, an affidavit for Aguiar's arrest said. Instead, his ...

Doctor in California headed to prison for two years for kickback scheme
October 20, 2014, Los Banos, CA -- A former physician who practiced in Los Banos and San Francisco was sentenced to two years in jail for committing health care fraud bilking the government out of $1.6 million, according to a press release from the office of U.S. District Attorney Melinda Haag. Edna Calaustro, 71 of Daly City and Los Banos was sentenced Aug. 20 in federal court to 24 months in prison for conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks involving the Medicare program, and health care fraud. She pleaded guilty to the charges Sept. 30, 2013. According to the news release, from December ...

Suspected auto fraudster in California charged with plotting to kill witnesses
October 20, 2014, Pittsburg, CA -- A Contra Costa County grand jury has indicted a Pittsburgh man after he allegedly hired hits on nine witnesses set to testify against him, suggesting they could die in staged car crashes, drug overdoses and robberies "gone bad," prosecutors said Friday. Charles Waldo, who has been held at the Martinez jail awaiting trial for insurance fraud, was indicted Wednesday on nine counts of solicitation to commit murder and one count of conspiracy to commit murder, prosecutors said. The indictment alleges that Waldo conspired with other inmates to arrange the killing of nine witnesses set to testify against him at his upcoming trial. ...

Woman in New Jersey accused of submitting more than $500K in fake medical claims
October 20, 2014, Middletown, NJ -- A Middletown woman on Monday admitted to a judge that she submitted more than $500,000 in insurance claims for medical procedures that never took place, authorities said. Donna Dzienisewski, 40, made the admission in pleading guilty to health-care claims fraud before Superior Court Judge Anthony J. Mellaci Jr. Dzienisewski admitted that between March 18, 2011 and March 12, 2013, she submitted 107 claims to Horizon Blue Cross Blue Shield of New Jersey, falsely stating she had incurred about $502,740 in reimbursable health-care expenses for 107 visits to doctors, according to a news release issued by acting Attorney General John J. Hoffman and ...

Injured worker in Illinois says boss directed him to commit workers comp fraud
October 20, 2014, Madison County, IL -- An Illinois agricultural construction company is accused of firing an employee when he refused to be part of the company’s alleged insurance fraud scheme. Steven Dion Vinyard filed a lawsuit Sept. 29 in Madison County Circuit Court against Bob Lamb Inc. Vinyard says he began working for Bob Lamb in June 1993 building grain elevators and other farm equipment. In June 2011 Vinyard claims he hurt his back on the job and asked to take a few days off. Vinyard alleges his manager, Jacob Lamb, told him to turn the claim into his private health insurance instead of filing a workers’ compensation ...

Bogus health policy leaves grieving widow with huge medical bills
October 20, 2014, Washington, DC -- It's a scheme leaving victims on the hook for massive medical bills. Now those responsible for issuing fraudulent health insurance policies are being forced to pay up. “It's all the insurance you will need until you reach the age for Medicare,” said Marsha Pollworth. “I thought, 'Wow this just sounds great.'” Pollworth and her husband Ken thought they found affordable private health insurance. It wasn't until Ken was dying of cancer that she realized they'd been duped. Their insurance plan was phony. “I'm grieving and trying to deal with the fact that creditors are going to come after me ...

N.J. man falsely reported stolen landscaping equipment
October 17, 2014, Mount Laurel, NJ -- A Mount Laurel man who owns a landscaping company was arrested Wednesday for falsely claiming his equipment was stolen and collecting the insurance money, authorities said. Marcello DiPietro, 29, went to the Mount Laurel police last February and reported that more than 20 pieces of his landscaping equipment was stolen, said Joel Bewley, spokesman for the Burlington County Prosecutor's Office. DiPietro submitted claims to his insurance company and received $7,500 to cover the cost of the equipment, Bewley said. An investigation revealed that DiPietro's still possessed several of the items he reported stolen to police, according to Bewley. Authorities found several of the items ...

More than 50 cars pulled from Merrimack River in Massachusetts
October 16, 2014, Andover, MA -- Well, you can say this about the Merrimack River: It has been, historically, a practically perfect place to dump a car. Water the color of black coffee. Dozens of secluded access points, especially along a wooded trail that runs beside the banks from Lowell to Lawrence. In this state, with its grand tradition of boosting cars and committing insurance fraud, you’d be hard pressed to find a better spot to vanish a ride. So far, crews have found nearly 80 on the river bottom, cars that long ago passed from transportation to evidence. Even as car theft rates have fallen, you can ...

Owner of diagnostic company in Florida bilked health programs for $12M
October 15, 2014, Tampa, FL -- A Lake Worth man pled guilty in federal court in Tampa to crimes involving millions of dollars of fraudulent Medicare payments and laundered money. Gregory J. Sylvestri, 44, will be sentenced at a later date and agreed to forfeit a $60,000 platinum and diamond engagement ring that he purchased from the proceeds, the U.S. Department of Justice said in a statement. Sylvestri was the principal of the company BioScan which, according to the plea agreement, submitted more than $12 million in fraudulent claims to Medicare between June 2010 and April 2014. The claims were tied to illegal kickback arrangements and claims for ...

Medical biller in Minnesota to pay feds $1.95M to settle fraud charges
October 15, 2014, Duluth, MN -- A national medical billing company with an office in Duluth has agreed to pay $1.95 million for allegedly defrauding the Medicare and Medicaid systems, federal authorities announced. Medical Business Service Inc., whose local office is on Koger Boulevard near Ferguson Elementary School, was accused of violating the False Claims Act by fraudulently changing diagnosis codes on claims to get rejected claims paid on behalf of radiologists. #“Billing companies provide a key check-point to combat medical billing fraud. Consequently, they will be examined with the same scrutiny as healthcare providers,” U.S. Attorney Sally Quillian Yates said in a news release announcing the settlement. #Derrick ...

Four charged with workers compensation fraud in Ohio
October 15, 2014, Columbus, OH -- On Wednesday, October 15, the Ohio Bureau of Workers' Compensation (BWC) Administrator/CEO Steve Buehrer announced that four individuals were convicted of, or pleaded guilty to, charges related to defrauding Ohio's workers' compensation system in September 2014. Workers' compensation fraud is far from a victimless crime,” Buehrer said. “Fraud affects employer premiums, which indirectly affects consumers. Our Special Investigations Department does a fine job of detecting and deterring workers' compensation fraud to protect the State Insurance Fund and to keep employer premiums low.” In September four men either entered guilty pleas or were convicted as a result of an BWC's investigation. Michael Meekins, of ...

California man accused of selling fake fire insurance policies
October 14, 2014, Ventura, CA -- District Attorney Joyce Dudley announced Tuesday that 58-year-old Ventura resident Dean Basler pleaded guilty to charges that he fooled Santa Barbara residents in high fire risk areas into paying him $250,000 worth of premiums for fake homeowners insurance. Basler pleaded guilty to two counts of felony embezzlement and will be sentenced to 240 days in jail. He’ll also be ordered to pay back his victims and serve four years of probation. Basler would pocket the premium payments before issuing fake insurance certificates to his customers, Dudley said. The fraud was uncovered when one of Basler’s customers sought additional coverage on her ...

Texas man avoids prison for helping to stage auto crashes
October 14, 2014, Grand Prairie, TX -- A federal judge on Tuesday ordered a Grand Prairie, Texas man indicted in a local insurance fraud scam to repay more than $58,000 in ill-gotten gains. Theodis Lanfair, who pleaded guilty to one count of conspiracy to commit mail fraud, defrauded four insurance companies in which he and nine other indicted co-conspirators staged multiple automobile accidents and reported them to various police departments in Chicago and northern Indiana. Lanfair was also ordered to serve two years of probation, but received no prison time. According to the indictment, Robert Lemon and Dwayne Ashford, both of Michigan City, used their business in Michigan City to ...

Compounding pharmacist in New Jersey admits to paying kickbacks
October 14, 2014, Camden, NJ -- A southern New Jersey pharmacist has admitted paying tens of thousands of dollars in cash bribes to physicians for referring pain cream prescriptions, federal prosecutors announced Tuesday. Vladimir Kleyman, a 43-year-old Lakewood resident who was the president and pharmacist-in-charge of Prescriptions R US, pleaded guilty to conspiracy to pay kickbacks and commit health care fraud. He faces up to five years in prison when he’s sentenced Jan. 20. From January 2013 through January 2014, Kleyman provided another person with tens of thousands of dollars in cash and checks to provide bribes to physicians for referring prescriptions for a compounded pain cream to ...

Three chiros in Florida charged in staged auto crash scheme
October 14, 2014, West Palm Beach, FL -- A West Palm Beach chiropractor and two Miami chiropractors were sentenced to prison for their roles in a massive staged vehicle accident scheme, defrauding insurance companies out of reimbursement claims, federal officials said Tuesday. Kenneth Karow, 54, of West Palm Beach was sentenced to 11 years in prison. Hermann Diehl, 44, of Miami and Hal Mark Kreitman, 50, of Miami Beach, were sentenced to nine and eight years in prison, respectively. All three were convicted of mail fraud and money laundering. The chiropractors were found guilty of defrauding insurance companies out of “Personal Injury Protection” payments by submitting fraudulent claims that stated the ...

Homeowner in New Hampshire gets prison for submitting phony claims
October 13, 2014, Nashua, NH -- The New Hampshire Insurance Department announced that a Nashua, N.H., resident pleaded guilty in Hillsborough County Superior Court on Oct. 9 to two charges of felony insurance fraud and one felony charge of bail jumping, stemming from a fraudulent insurance claim he had filed with Travelers Insurance Co. The department announced that in September 2012, after the roof of his home was damaged by high winds, Mark Kelley sought reimbursement from Travelers Insurance Co. by submitting two receipts that he claimed showed he had paid a local contractor for repairs. Subsequent investigation by Travelers, and later by a senior investigator at the ...

Video catches plant manager in Ohio planning fake comp injury
October 11, 2014, Cleveland, OH -- An Ohio man is facing the music after his employers say he committed workers' compensation fraud and the act was all caught on camera. In Aug. 2013, surveillance camera's inside Cleveland's Russell Products show plant manager Glenn Jones plotting to stage a workplace injury. Investigators say Jones removes this plywood which was covering a hole in the floor and moments later he comes back to make sure the coast is clear before stomping to make the hole even bigger. One day later, the camera's are still rolling as Jones comes back into work. Investigators say he lays down, gets into ...