News

Federal lawsuit says comp insurers hacked into claimant attorney files
July 01, 2015, Los Angeles, CA -- Major worker's compensation insurers, including a Berkshire Hathaway company, hacked into thousands of confidential legal files to save money on judgments and settlements, an Angeleno claims in a federal class action. Hector Casillas claims the insurers "hacked into privileged and confidential litigation files of thousands of individuals litigating worker's compensation cases against them. The defendants stole these files from servers used by law firms representing the individual litigants and used the illegally obtained information to obtain a litigation advantage." The insurance company defendants are Berkshire Hathaway Homestate Companies, Cypress Insurance and Zenith Insurance. Other corporate defendants are Broadspire Claims Services and the ...

Pair sentenced to prison for masterminding Kansas City home arson ring
June 30, 2015, Kansas City, MO -- Two men were sentenced Tuesday to federal prison for conspiring to burn houses in Kansas City after they bought and insured them. Five houses were set on fire during the course of the conspiracy from 2007 to 2013, and insurance companies paid out more than $430,000 in claims submitted after the fires, according to federal prosecutors in Kansas City. Each of the houses was bought for between $6,500 and $15,000. But they were insured for amounts from $88,000 to $307,000 after the conspirators lied on insurance applications about the houses being occupied or renovated. They also falsely claimed that there were valuable ...

Trio in Miami arrested for PIP auto accident fraud
June 30, 2015, Miami, FL -- The Florida Department of Financial Services’ Division of Insurance Fraud today announced the arrests of Miami residents Mariela Quintana, 46, Noel Vazquez Lazo, 44, and Rodney Fabian, 27, for their involvement in separate fraudulent personal injury protection or PIP insurance schemes. These three individuals are held accountable for nearly $100,000 in financial losses after their plans to execute multiple PIP schemes were disrupted by a Division of Insurance Fraud investigation. Mariela Quintana was a licensed massage therapist at D & J Rehabilitation Center in Miami and was charged for fraudulently billing nearly $10,000 in claims after she allegedly signed ...

Flood victim in Pennsylvania charged with filing bogus claim with fake receipts
June 30, 2015, Harrisburg, PA -- A Harrisburg area man is accused of collecting more than $70,000 in fraudulent insurance claims by saying his home flooded to the point he had to stay in a hotel. An investigation into the claims, however, proved the hotel fictitious and the claims a scam, according to the Pennsylvania Office of the Attorney General . David Lee Stewart, 36, has been charged with insurance fraud, theft by deception and criminal attempt theft by deception in connection with claims he made while living at his rental property in the 3000 block of Green Street, according to charging documents. Agents from the Insurance Fraud ...

Man sentenced for insurance fraud over damage done to car
June 29, 2015, none, none -- A Newark man who committed insurance fraud is now headed to prison. State authorities say Derrick Smith recently received a three-year sentence. Smith sought more than $15,000 from his insurer for damage done to his car before his policy took effect and for personal items he claimed were stolen. Authorities say Smith sought $13,629 for damage that he said occurred during a five-day period in December 2013 when his car had been stolen. He also claimed a $1,700 watch and earrings worth $1,000 were in the vehicle. Smith later told police he had found his car. But he said it had extensive damage and ...

Pennsylvania AG announces 20 arrests for various insurance frauds
June 29, 2015, Harrisburg, PA -- Attorney General Kathleen G. Kane today announced the arrest of 20 individuals across the Commonwealth for a variety of unrelated insurance fraud offenses. The arrests were made throughout the month of June and were the result of investigations by the Office of Attorney General's Insurance Fraud Section. The Insurance Fraud Section is the largest law enforcement entity in Pennsylvania with specific authority to investigate and prosecute such crimes. "Insurance fraud affects everyone, whether it's through increased insurance rates or more costly goods and services," Attorney General Kane said. "It is crucial that we investigate and prosecute those who seek to take advantage ...

Pennsylvania AG announces 20 arrests for various insurance frauds
June 29, 2015, Harrisburg, PA -- Attorney General Kathleen G. Kane today announced the arrest of 20 individuals across the Commonwealth for a variety of unrelated insurance fraud offenses. The arrests were made throughout the month of June and were the result of investigations by the Office of Attorney General's Insurance Fraud Section. The Insurance Fraud Section is the largest law enforcement entity in Pennsylvania with specific authority to investigate and prosecute such crimes. "Insurance fraud affects everyone, whether it's through increased insurance rates or more costly goods and services," Attorney General Kane said. "It is crucial that we investigate and prosecute those who seek to take advantage ...

Medical supplier in California sentenced to prison for Medicaid fraud
June 29, 2015, Valencia, CA -- The former owner of Ezcor Medical Supply was sentenced today to serve 97 months in prison for her role in a fraud scheme that resulted in $3.5 million in fraudulent claims to Medicare and Medi-Cal. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Joseph Fendrick ...

Nearly 20 years in prison handed out to clinic operator in Miami
June 29, 2015, Miami, FL -- U.S. District Judge Susan C. Bucklew sentenced a Miami couple today for their roles in operating a sham clinic. Gladys Fuertes (41) was sentenced to 19 years and 6 months in federal prison for engaging in a conspiracy to commit healthcare fraud, healthcare fraud, aggravated identity theft, and obstruction of a healthcare fraud investigation. Her husband and business partner, Mario Fuertes (41) was sentenced to 11 years and 3 months in federal prison for conspiracy to commit healthcare fraud, healthcare fraud, and obstruction of a healthcare fraud investigation. The Court also ordered them to forfeit $1,036,759.72, proceeds that are ...

Two women in California sentenced to prison for cosmetic surgery scam
June 29, 2015, Orange County, CA -- Two women were sentenced to federal prison on Friday for a medical fraud scheme that billed health insurance programs for more than $71 million in unnecessary medical procedures. Prosecutors said Theresa Fisher of Tustin and Lindsay Hardgraves of San Pedro ran a scheme out of a surgery center in Orange where they connected patients with free or discounted cosmetic surgeries – including tummy tucks, breast augmentation and liposuction – in exchange for undergoing procedures they didn't need, such as endoscopies and colonoscopies. The center went by a variety of names, including Empire Surgical, Vista Surgical and Princess Cosmetic Surgery, according to a ...

Posting photos of crashed car on Facebook dooms N.H. man's bogus auto claim
June 29, 2015, Belmont, NH -- A Belmont resident has been charged with felony insurance fraud, after he allegedly filed two fraudulent claims under his automobile insurance policies, the state Insurance Department said. Jose Montezuma, 46, was indicted by grand juries in Merrimack and Belknap counties on multiple insurance fraud charges, the Department said. In both instances, he is charged with buying an insurance policy after a Dec. 27 accident and then filing a claim. The Department said Montezuma bought an automobile insurance policy from Progressive two days after he struck a deer while driving his 2008 Ford Focus. Progressive denied the claim after discovering the accident took ...

Sports doc in New Jersey admits to taking $60K in bribes from pharmacy
June 29, 2015, Toms River, NJ -- A Toms River sports medicine doctor admitted he accepted more than $60,000 in bribes to refer pain cream subscriptions to a Lakewood pharmacy and that he falsified health records to ensure they would be paid for by insurance companies, according to the U.S. Attorney’s office. James Morales, 45, who owned Shore Sports Medicine, a medical practice in Toms River, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden, admitting that from February 2013 through December 2013, he accepted at least $60,000 in cash bribes from Prescriptions R Us (PRU), a compound pharmacy in Lakewood, in exchange for referring pain ...

Pennsylvania man accused of buying auto policy an hour after car fire
June 29, 2015, Somerset County, PA -- An area man is facing charges for insurance fraud. Police say 48 year old David Barnes of Central City called his insurance company last March trying to buy comprehensive coverage for his automobile. Less than an hour after that call, The Somerset County man filed a claim saying his car was damaged by fire in West Virginia. Investigators discovered that local fire company responded to a fire involving Barnes' vehicle about 30 minutes before he called his insurance company . Barnes was released following his preliminary arraignment. ...

Key developments in insurance fraud this week
June 26, 2015, Washington, DC -- Recruiters for fraud rings and other outsiders to crashes in Texas now have zero access to police reports, thanks to a new law passed this week. In other legislative news, chiropractors in Kentucky have launched a court challenge to a new law there that restricts their ability to solicit crash victims, according to today's edition of Fraud New Weekly. The Coalition newsletter also includes several major cases that broke this week, including the sentencing of an arsonist in Kentucky responsible for a $4.7-million fire at a clothing factory. Other cases involve a New Jersey firefighter out on comp caught teaching martial ...

Medicaid fraud inspector in New York caught accepting gifts
June 26, 2015, Albany, NY -- A top state official tasked with tackling Medicaid fraud took improper gifts from a government contractor he was overseeing, according to a state inspector general’s report released Thursday. Joseph Flora, himself a former director in the state Office of the Medicaid Inspector General, accepted thousands of dollars in meals, booze, a trip and then a job offer from Health Management Systems, a company with a $120 million state contract. Flora allegedly accepted the improper gifts while he directly oversaw the HMS pact. At the same time, he also gave testimonials on behalf of HMS to other state officials. Flora, until his forced retirement in ...

Man in New Jersey accused of buying policy after auto crash
June 26, 2015, Trenton, NJ -- Acting Attorney General John J. Hoffman and the Office of the Insurance Fraud Prosecutor (OIFP) today announced that an Essex County man was sentenced to three years in state prison today for seeking compensation of more than $15,000 from his insurer for both damage done to his car prior to his policy’s effective date and for personal items he claimed were taken during a five-day period when he fraudulently claimed the car had been stolen. Derrick Smith, 32, of Newark, was sentenced by Essex County Superior Court Judge Alfonse J. Cifelli. Smith pleaded guilty in May to second-degree insurance fraud. Smith was ...

Doctor in Virginia gets four years in prison for dealing painkillers
June 26, 2015, Stafford, VA -- Nibedita Mohanty, M.D., 56, of Stafford, Virginia, was sentenced today to 48 months in prison, followed by three years of supervised release for distribution and dispensation of controlled substances and aiding and abetting health care fraud. Dr. Mohanty, who was formerly the Chief of Medicine at Stafford Hospital from June 2009 through Feb. 12, 2013, was also fined $15,000 and ordered to pay a forfeiture of cash proceeds in the amount of $43,120. Dr. Mohanty pleaded guilty on Feb. 23, 2015. According to court documents, Dr. Mohanty admitted to issuing prescriptions for oxycodone which were not for a legitimate medical purpose ...

Insurance agent in North Carolina accused in commissions scam
June 26, 2015, Wake County, NC -- Insurance Commissioner Wayne Goodwin today announced the arrest of Ronald Pierre Whitaker, 48, of 1072 Tarboro Road, Youngsville; he is charged with one count each of obtaining property by false pretense and common law forgery. Department of Insurance criminal investigators accuse Whitaker of fraudulently obtaining $8,319.62 in unearned commissions from Senior Life Insurance by submitting forged insurance applications between November 2013 and June 2014. Whitaker was arrested on June 25 in Wake County and placed under a $2,000 bond. The Department of Insurance employs 20 sworn state law enforcement officers dedicated to investigating and prosecuting claims of insurance and bail bonding fraud. Since ...

Feds sue radiologist in New York for $1.1M for overbilling insurers
June 26, 2015, Rochester, NY -- Federal officials want to claw back $1.1 million from a former Rochester-area radiologist who last year was accused of defrauding Medicare, Excellus BlueCross BlueShield and MVP Health Care. A civil forfeiture suit filed by the U.S. attorney in U.S. District Court in Rochester seeks to claim assets held by Thomas Stephenson M.D. The action comes some 10 months after federal prosecutors charged Stephenson criminally for allegedly submitting fraudulent X-ray and bone-density test billings. Stephenson, 71, double-billed Medicare and private insurance companies for studies done over a three-year span beginning in 2007 and ending in April 2010, Assistant U.S. Attorney John Field ...

Comp claimant in Cleveland gets jail for working while collecting
June 26, 2015, Cleveland, OH -- A Cleveland (Cuyahoga County) man was sentenced June 18 in the Franklin County Court of Common Pleas in connection with working while receiving workers’ compensation benefits. Cymande McFarland previously pleaded guilty last month to one charge of theft, a fifth-degree felony. “BWC is committed to finding and eliminating fraud, one of a number of ways BWC is working to keep employer premiums costs as low as possible,” said BWC Administrator/CEO Steve Buehrer. “Combating fraud also supports BWC’s most important mission of caring for Ohioans as they recover from workplace injuries.” A data cross-match with the Ohio Department of Job and Family Services ...

Twelve arrested in insurance fraud scam
June 26, 2015, Baton Rouge, LA -- Louisiana State Police has announced 12 arrests in June for insurance fraud and auto theft. Troopers assigned to the Louisiana State Police Insurance Fraud / Auto Theft Unit brought several criminal investigations involving staged and "jump-in" crashes to conclusion, resulting in the arrests with an estimated fraud amount of $130,208.49, according to Spokesman Nick Manale. The Insurance Fraud Unit is responsible for investigating referrals of suspected fraudulent insurance acts and promoting awareness of insurance fraud throughout the state. Locals arrested were: Terrence Jackson, 32, of Albany, was arrested June 4 pursuant to a State Police warrant charging him with one count of insurance fraud. A ...

Chiropractor in Georgia indicted on 12 counts of defrauding insurers
June 25, 2015, Roswell, GA -- Georgia Insurance Commissioner Ralph Hudgens announced that a Bibb County Grand Jury indicted Roswell chiropractor Victor L. Dees for 12 counts of insurance fraud based off an investigation conducted by the Department of Insurance’s Fraud division. Subsequent to the indictment, a bench warrant was issued for Dees, 49, on June 16, according to the Georgia Department of Insurance. Fraud enforcement officers allowed Dees to turn himself in out of respect to pre-arranged medical commitments to his patients. An investigation led by Hudgens’ office found that Dees submitted fraudulent bills to insurance companies for patient treatment that did not occur, GDOI said. The ...

Federal bill to toughen Medicare fraud penalties advances in Senate
June 25, 2015, Washington, DC -- Unanimous votes Wednesday by the U.S. Senate Finance Committee approved two proposals U.S. Senator Mark Warner supports that aim to improve the quality of care for seniors on Medicare. One proposal would work to reduce Medicare and medicaid waste and fraud so that seniors will continue to get the health care benefits they need. The other would strengthen health and long-term services for the elderly under the Program of All-Inclusive Care for Elderly. "These bipartisan proposals will not only improve care for seniors and protect some of our nation's most vulnerable citizens, but save taxpayers money by preventing billion in wasteful and fraudulent ...

PIP clinic owner in Florida busted for filing fake claims
June 25, 2015, Orlando, FL -- The Florida Division of Insurance Fraud today announced the arrest of Dr. Troy Godsey and Renata Berriel Deazevedo for their roles in a scheme to defraud multiple insurance companies of more than $100,000. Troy Godsey, a licensed chiropractor, established Spine Health Solutions, P.A. in Orlando under the guise that he was the sole owner of the health care clinic. Because he is licensed as a chiropractor, he was granted an exemption from clinic licensing requirements with the Agency for Health Care Administration. This allowed Godsey and Renata Deazevedo to operate a PIP fraud scheme without alerting health care regulators. While ...

Oregon man collected disability for 10 years while working
June 25, 2015, Bandon, OR -- Calling the defendant’s conduct “huge criminal thinking,” a Bandon man was sentenced on Wednesday to eight months’ confinement at the Residential Reentry Center in Medford and ordered to pay more than $169,000 in restitution for disability and medical benefits he fraudulently received. Daniel Stadelman, 55, pleaded guilty in October to theft of government funds based on his concealment of work activity from the Social Security Administration (SSA) for more than ten years. According to Stadelman’s admissions and court records, Stadelman applied for disability benefits in 2001, claiming he was unable to work due to an illness that left him severely ...