Insurance Fraud Weekly ePort: Week of June 13

Jun 13, 2008

 

Insurance Fraud Weekly ePort
Week Ending June 13, 2008
www.InsuranceFraud.org
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LEGISLATION & REGULATION

  • A Texas court denied a chiro’s request to temporarily stop the state from using new accident reports without phone numbers of crash victims. The numbers recently were dropped from standard reports to help prevent fraud rings from recruiting accident victims for phony injury claims. The chiro claimed the changed amounted to a rule change that required prior public notice. But merely revising the accident reports was a minor change to implement the reports, not a full rule change requiring notice, the court ruled. The chiro also is suing to overturn the revised form altogether (Texas Weekly Advocate & Dr. Jeffrey White v. Texas Dept. of Public Safety & Texas Dept. of Transportation D-1-GN-08-001884).
  • The New York AG is asking the state legislature to create a public registry for home health care workers. The request comes after the AG found widespread Medicare fraud, physical abuse and improper certification of workers. The Assembly and Senate leadership promise the bill will be sent to the governor before the legislature shuts down later this month.
  • A bill requiring mandatory minimum sentences for no-fault auto fraud died when the Florida legislature closed down last month. SB 752 fell victim to exhaustion. Rancorous debates over extending the state’s no-fault insurance system in 2007 left nearly everyone with little taste for any no-fault bills this year. There was general agreement to give all no-fault issues a rest in 2008.
  • The coalition’s government affairs committee is beginning to explore which states to target for anti-fraud activity for next year. If you have recommendations or suggestions, contact Howard Goldblatt at Howard@InsuranceFraud.org.

Note: Texts of anti-fraud bills are available on the coalition’s website here.

PUBLIC OUTREACH

  • The Kentucky insurance department is pursuing charges against a woman who allegedly lied on her homeowner application. That’s heartening news. Application schemes often are swept under the rug, the coalition’s Dennis Jay says in his FraudBlog this week. “Sadly, such cases are rare across the U.S. Fraud bureaus and prosecutors usually don’t consider them a priority. If more did, they would send a stronger signal that honesty is important. Underwriting fraud is basically a fairness issue,” Jay writes. “The cheats cause honest policyholders to subsidize the premiums of the dishonest.”

CRIMINAL CONVICTIONS

  • Norma Fonseca told police someone stole her car from in front of her home. She filed a claim with Infinity Insurance. But Oxnard, Calif. police responded to an unrelated call at GT Auto Electric Repair shop. Surprise, surprise, they found Fonseca’s car stashed there. The owner, Salvador Roses Castillo, had let her hide the car so she could make the bogus insurance claim. Fonseca will be sentenced in July, and Castillo in August. Each faces up to five years.
  • A mother and her son will pay a price for lying about who drove the family car when it crashed on a Virginia roadway. Tina Lynn Wilder Bryant told Geico she was the driver and her son Dustin Robert Surber was the passenger. The Rose Hill woman made a collision damage claim and said Surber was hurt so she could collect insurance money for bodily injury. The Virginia State Police investigated, finding that Surber was the driver and Bryant wasn’t even in the car when it crashed. Bryant and Surber received 10 years of probation and must repay $12,540.
  • An FBI sting has stung a Philadelphia lawyer. Jordan B. Luber was targeted by “Staged Impact,” a probe of phony personal injury claims from staged crashes. Agents posing as cleaning women approached Luber in 2004 to negotiate bogus insurance claims, saying they’d visited a chiro clinic in Northeast Philly. Both admitted they’d forged medical records and hadn’t received any treatment. But the clinic called Injury Associates was an FBI front. It treated no one; it only processed paperwork for bogus claims to snag swindlers. Knowing the claims were fraudulent, Luber negotiated a $7,500 insurance settlement for each “victim”, pocketing $6,000 in legal fees. The agents wore wires and recorded their meetings with Luber. He received two months in jail and had his license suspended.
  • A woman’s story of losing two pricey wedding rings on a wayward water skiing trip didn’t hold water with authorities. Shannon A. Dick, of Shenango Township, Pa. said she lost the rings – valued at $10,400 – while water skiing. But actually she’d pawned them for $1,000 each. Dick then filed a claim with State Farm Insurance on a policy she’d bought just eight days after asking State Farm how much money she’d get if the rings were lost or stolen. Dick admitted to the scam, saying she needed the cash to cover surgery for Crohn’s disease. The AG recommended probation this week.
  • How do you punish a dentist who’s a community role model, but also a crooked one? Dr. Tamara Lowe will decide. The Farrell, Pa. woman illegally used her employees’ health insurance to buy addictive prescription painkillers for herself, her practice and a family member. Lowe received up to two years in prison, and will lose her dental license. But she also provided much-needed dental services to the poor, so jailing Lowe would cost the community a role model. The court thus gave the Harvard-educated Lowe 30 days to choose: Do jail time, or find a project to serve her local community. She’s thinking about it.

CRIMINAL CHARGES

  • A chiro’s fire-bombing scheme blew up in his face, Utah prosecutors said this week. Matthew Zarit allegedly plotted to blow up his office and the eight other offices in his building to collect insurance money because he was having financial problems. He planned to mix sodium hydroxide and gasoline, using info from chemistry classes and the Internet, officials say. Zarit’s suspected scheme fell apart when a dentist entered the building early that morning to treat a patient needing emergency work. The dentist finished at about 1 am and saw the hallway littered with five gallons of gasoline in containers, plus fuses, road flares and a timer. He immediately called 911. The dentist and his patient would’ve been killed had the bomb gone off, prosecutors say. The blast also could’ve easily spread to nearby condos and even a hotel.
  • The term “crush” has a new meaning after a loopy lothario deliberately crashed his Mazda into a Lexus carrying a woman he favored, California prosecutors charged this week. Binh Kim Hoang filed a claim with State Farm. He allegedly lied that the crash near Sacramento was an accident and that he didn’t know the occupants, both of whom were injured. But Hoang reportedly was enraged that a woman he pined for was in the Lexis with another man. And only two months earlier, the apparently spurned lover allegedly had broken all four windows of the Lexus after confronting the vehicle’s owner.
  • Franklin Lacy Britt plotted to burn down a rental home he owns in Laurinburg, N.C., prosecutors charged this week. But a single mother with a baby lived in the targeted home, and that really steams the insurance department. “The consequences of a house fire could have been devastating to that family,” insurance commissioner Jim Long says. Britt’s suspected plot collapsed when another man refused to help Britt set the fire, and instead called the police.
  • Four agents stole up to $500,000 in premiums from small businesses throughout New Jersey and parts of Pennsylvania but never bought the promised coverage, New Jersey prosecutors alleged this week. Many victims were taxi and limo services that operated without liability coverage as a result, the state AG says. The four already are in hot water. Christopher Melilli has been fined for selling without a New Jersey license. William Wolnski’s license was suspended, and only Terrence Downs still has a license. Thomas Hurd earlier was convicted of bilking a premium-finance company and now lives in a halfway house.
  • It’s no secret that Southern California is a hot bed for wildfires. The fires also may be attracting scammers. Olav A. Flores of Cedar Glen spun a tale of woe to Farmers Insurance. Smoke damage forced him to evacuate his home after wildfires in October 2007, he claimed. Flores said he’d already replaced his damaged floor and drywall. But there was no smoke damage, and the drywall and floor weren’t even in place when he made the claim. Renters also occupied his home before, during and after the wildfires. Flores faces felony insurance fraud charges.
  • For a full decade, William Douglas Pickel allegedly collected $150,000 in workers comp money from Liberty Mutual after being hurt while working for a trucking company in Bristol, Va. He claimed he couldn’t drive. But Pickel actually ran a power washing business and drove for another trucking firm while picking up 500 weekly comp checks along the way, prosecutors alleged this week. He’s charged with nearly 200 felonies, each with up to 10 years in prison. The Virginia State Police led the investigation.
  • Rigoberto Tellez was hurt in a work-related fall and began receiving workers comp money from AIG. The Lawrence, Mass. man was cleared for light duty after several months, but turned down the assignment and kept receiving comp money. He continued filing regular reports, saying he was earning no other income, even though he was receiving state unemployment benefits for 23 weeks, prosecutors say. Tellez allegedly had convinced the state he was able and available for work despite turning down his employer’s offer of light work. The Massachusetts fraud bureau assisted in the investigation, which led to his indictment yesterday.
  • Clinics in Rome and Milan, Italy were houses of horror for patients who allegedly received worthless and sometimes deadly surgeries so three docs allegedly could pad their insurance billings. The surgeons performed 91 useless operations, officials say. At least five elderly patients died from operations that were too risky for their medical conditions, prosecutors say. Two women allegedly had mastectomies for minor breast problems, and a man with pneumonia had part of lung removed. An 88-year-old woman had three operations. Another elderly women died from a risky operation on a tumor that wasn’t even biopsied, prosecutors say. Wiretaps allegedly caught the doctors talking about hiking their income from more invasive procedures.

CIVIL & ADMINISTRATIVE ACTIONS

  • In a bid to thwart doctor-shopping addicts, California will provide doctors and pharmacists real-time access to patient prescription drug histories. Health providers now need weeks to obtain the info. The delays let swindlers obtain large amounts of addictive prescription drugs such as OxyContin from numerous doctors for personal use or street sale. Insurance fraud is a major financier of prescription drug diversion, says Prescription for Peril, the coalition’s landmark report on the national epidemic. The new program will use a secure, privately funded database containing 86 million prescription entries for drugs dispensed in California. The system goes online within 10 months, officials say. Only health providers, regulatory boards and law enforcement will have access.

QUOTE OF THE WEEK

“In down times, people need to make money, and they sometimes go after the most vulnerable in our society to get it…And often, the most vulnerable are seniors.”

— Retired Florida attorney Michael Karp commenting on the increase of scams due to the wilting U.S. economy.

OTHER HEADLINES THIS WEEK

  • N.M. man charged with car arson and insurance fraud
  • Two in Florida charged with drug diversion and fraud
  • Medicare audits put medical providers on defense
  • N.C. agent accused of stealing $6,000 in premiums
  • Snitching pays off for arson convict in Indiana

Details at www.InsuranceFraud.org/

MEETINGS & CONFERENCES

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Should you have any questions or comments, please do not hesitate to contact Colodny Fass.

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