Insurance Claims Investigation News

Owners and employees of various auto body shops in Shasta and Butte counties were allegedly involved in fraudulent insurance claims — with loss estimates ranging from $2,000 – $4,386 in 19 separate occurrences

BUTTE & SHASTA – Insurance Commissioner John Garamendi today announced the arrests of 19 suspects for various felony counts of insurance fraud, all resulting from an extensive sting operation in Butte and Shasta counties. Of the 20 suspects, seven individuals were arrested this morning in ButteCounty and 12 individuals in ShastaCounty self-surrendered to the Shasta County Jail and were released on their own recognizance.

During April and May 2006 in Shasta, and during May 2006 in Butte, the California Department of Insurance (CDI)’s Fraud Division, with assistance from the Butte and Shasta County District Attorney’s offices, began an undercover investigation into automobile body shop-related insurance fraud. They unearthed numerous instances of suspected insurance fraud that could have bilked consumers out of tens of thousands of dollars.

“I commend the investigative work of our units and the Butte and ShastaCountyDA’s offices,” said Commissioner Garamendi. “Insurance fraud is an economic burden upon our entire state and we will continue to work to bring perpetrators to justice.”

Using information from various sources, including the National Insurance Crime Bureau (NICB), the Bureau of Automotive Repair (BAR), the Butte County District Attorney’s office, and licensing data and public business directories, officers visited the shops in Butte and ShastaCounties.

In ButteCounty, as part of this investigation, an undercover officer visited 38 body shops and spoke with owners and estimators at each shop, saying she had been involved in a car accident. The undercover officer further explained that her car had damage to the left side as a result of the “legitimate” accident and that this damage would be covered under her existing auto insurance policy.

Furthermore, the undercover officer informed the owners and estimators that there was also existing damage on the right front fender which was already present when she purchased the vehicle. The undercover officer asked if it would be possible to combine the insured damage with the uninsured damage as one claim.

The investigation for ButteCounty resulted in eight body shops providing the undercover officer with a fraudulent repair estimate.

The fraudulent estimates included the damage the undercover officer said was not part of the collision and took place before insurance coverage was in place. The estimates ranged from $2,000 to $3,500. In one case, the owner of E&D’s Auto Body and Paint in Chico allegedly told the undercover officer that he would repair the unrelated insurance damage under the current insurance claim and give her $300 cash to have her car repaired at his shop.

The Butte County District Attorney’s Office will likely charge eight suspects with felony counts of insurance fraud. Of the eight, five are owners and three are employees.

The NICB, BAR and Esurance Insurance Company assisted the CDI’s Fraud Division and the Butte County District Attorney’s office in this investigation.

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In Shasta County’s investigation an undercover officer visited 31 body shops, contacting owners and estimators at each place. He told them that he was involved in an auto accident. The officer explained to the auto body shop owners and estimators that his car had damages to the right side as a result of the “legitimate” accident and that this damage would be covered under an existing auto insurance policy. Other damage existed on the left rear bumper which the undercover officer said was unrelated to the car accident and had already been there when he purchased the vehicle. The undercover officer informed the owners/estimators that the pre-existing damage was not covered by the existing auto insurance policy. The undercover officer further asked if it would be possible to combine the insured damage with the uninsured damage and present both to the insurance company under one claim.

The investigation resulted in 13 body shops providing the undercover officer with a fraudulent repair estimate. The Shasta County District Attorney’s office filed charges in 12 of these incidents.

The fraudulent estimates were for the damage the undercover officer said was not part of the collision and occurred before insurance coverage was in place. The bogus estimates ranged from $2860.62 to $4386.24. In one case, the owner of Mike’s Body Shop in the city of Anderson allegedly applied sheetrock chalk between the two questioned damages in order to make the claim appear more legitimate. The owner illegally tried to show that both damages occurred at the same time.

The Shasta County District Attorney’s Office has filed charges against 12 people for felony counts of insurance fraud. Of the 12 suspects, nine are owners and three are employees.

The NICB, BAR and Liberty Mutual Insurance Company assisted CDI’s Fraud Division and the Shasta County District Attorney’s office in this investigation.

Wednesday, 23rd August 2006

A police doctor hired a private detective to spy on a police officer he believed was \’malingering\’ in order to get compensation, the General Medical Council heard today (wed).

PC Robert Millar, 35, of West Midlands Police wanted personal injury compensation and early retirement after he was injured in a road crash while on duty in 1998, the panel was told.

But Dr Nicholas Cooling, 50, the force\’s consultant psychiatrist, diagnosed the officer as only 35 per cent disabled, disqualifying him from early retirement and reducing the level of compensation he could apply for to the second-lowest level.

A fitness-to-practice panel heard how Dr Cooling took it upon himself to hire a private detective to make secret video recordings of his patient after the police officer filed a complaint to the GMC about him and lodged an appeal against the compensation decision.

Dr Cooling admits he passed on the PC\’s name and address to an \’enquiry agent\’ in order to get evidence to back up his medical judgement. He faces being struck off if the case against him is proven and it is found that his alleged misconduct impaired his fitness to practice.

Lorraine Williams, Occupational Health, Safety and Welfare Manager for West Midlands Police, was asked by the doctor\’s representative Michael Horne, \”Dr Cooling came to the view that PC Millar was malingering?\” She replied: \”Yes.\”

Mr Horne continued: \”He discussed with you the possibility of covert surveillance of PC Millar. He suggested that the force should do it?\”

\”Yes\”, Mrs Williams replied, \”My response was to say this wasn\’t force policy. I probably would have said he needed to go to another level to authorise that.\”

She added that PC Millar\’s appeal against the original compensation decision had been rejected and after examination by another psychiatrist, his level of disability and therefore eligibility for compensation had been further reduced.

She went on: \”In practical terms this means little or no financial payment from the force. He gets a DSS allowance, we don\’t pay anything. He hasn\’t appealed against this.\”

Mr Horne asked Mrs Williams whether the doctor was \’committed\’ and whether \’his interest was getting the right answer\’. \”Yes,\” she replied.

Dr David Baxendine, a consultant occupational physician working for the police, also gave evidence for the GMC and admitted that occupational health for the force was exceptionally stressful and \’full of emotion and angst\’.

He said: \”It\’s always quite an emotionally charged area. You\’re dealing with a situation in which officers may have been injured or off work for quite a time, under stress and not knowing what their future is.

\”They very often feel they are entitled to retirement or injury on duty awards and anyone who opposes this is at best misguided or actually maybe acting in an unhelpful way at the insistence of the police force. It\’s a quite difficult and fraught situation with a lot of emotion and angst.\”

But he added that doctors had a duty to withhold confidential information on their patients from third parties unless there was \’significant public interest\’ in releasing it, such as danger to the patient or the public.

Asked by Mr Horne whether he had experienced a doctor directly commissioning surveillance on a patient he went on: \”I would have to say in my experience it would be unique. I\’ve never known a case where it\’s been done. Normally any decision about covert surveillance is made by the police force.

\”The doctor would normally divorce himself from that actual decision.\”

The hearing, expected to last until Friday, continues.

Government says claims were substantially misrepresented to bilk company of thousands of dollars

By MARTI GOODLAD HELINE
Tribune Staff Writer

SOUTH BEND — A South Bend married couple and the man’s mother went on trial Monday in federal court, accused of defrauding auto insurance companies by filing claims with substantial misrepresentations.

Assistant U.S. Attorney Barbara Brook told the jury in her opening statement that Angela Jackson, formerly known as Angela Blackwell, used the scheme as a way to move up to a better vehicle.

“This was insurance fraud — family style,” said Brook, as she explained the alleged roles of the three defendants.

Brook said that Jackson, 35, aided by her husband, Joe, 40, and his mother, Essie, made insurance claims about stolen or damaged vehicles and about expensive equipment such as rims, tires and electronic items that allegedly were stolen.

As part of the claims, according to the charges, substantial misrepresentations were made as to the purchase price of the vehicles.

The defendants submitted sham purchase agreements and phony or altered receipts to support their claims, the government maintains.

The indictment includes one count of conspiracy and six counts of mail fraud stemming from insurance documents sent through the mail to further the alleged scheme.

The jury heard testimony Monday about a 1999 Ford Expedition that Angela Jackson reported was stolen Sept. 29, 2001, from a motel in Hazelwood, Mo.

She claimed she purchased the vehicle from her husband’s mother the previous April for $33,000 and still owed $28,000 at the time it was stolen.

Terry Morgan of Paoli, Ind., who formerly operated an auto salvage business, testified that he sold the Expedition to Joe and Essie Jackson in May 2000 for $6,800, based on documents he had.

The vehicle was wrecked, not road worthy and had a salvage title, Morgan said.

Bureau of Motor Vehicle records indicate the title was transferred from Essie to Angela in July 2001 with the purchase price listed as a gift.

On a tape-recorded statement made to an insurance claims adjuster, the jury on Monday heard Angela Jackson describe the stolen vehicle in very good condition and not having been in a crash as far as she knew.

The insurance company eventually paid her $21,500 to settle the claim about seven months later.

The jury is also to hear about another car theft claim and a report of a damaged vehicle from which thousands of dollars in electronic gear was reported stolen.

Michael Rehak, the attorney for Joe Jackson, said his client had a close friend who did extensive work on the Ford Expedition as a favor, using parts costing $9,000 to $12,000.

Essie Jackson’s lawyer, David Weisman, said his client had no knowledge of any conspiracy. “Whatever she did was done to help her children,” Weisman said.

The trial is expected to last through Thursday.

They\’re suspected of helping a Buena Park clinic collect $14 million.
By VICTOR MORALES
THE ORANGE COUNTY REGISTER

BUENA PARK – In a widening medical-fraud investigation, two people were arrested Tuesday on suspicion of recruiting patients for unnecessary surgeries, the Orange County District Attorney\’s office said.

Rosalinda Landon, 60, was arrested in Las Vegas and is being held on $4 million bail. Dee Francis, 56, was arrested in Los Angeles and is being held on $1 million bail. Both face extradition to Orange County, the District Attorney\’s office said.

Landon and Francis, both clinic administrators, are suspected of illegally recruiting patients in an eight-month span that helped Unity Outpatient Surgery Center bill more than $90 million in fraudulent medical claims, according to the D.A. Insurance companies paid Unity more than $14 million during this time, the D.A. said.

The suspects face 102 counts of conspiracy and insurance fraud. \”We expect further arrests as the scope of the investigation broadens,\” District Attorney Tony Rackauckas said.

Unity administrators Tam Vu Pham and his wife, Huong Thien Ngo, and her aunt Lan Thi Ngoc Nguyen pleaded guilty to multiple counts of insurance fraud in December 2005.

Johnny and Thuy Huynh also are suspected of being recruiters for the clinic, the D.A. said. Authorities say the Huynhs recruited over 200 patients from numerous states and received a commission of more than $1 million from Unity.

The Huynhs are scheduled for a pre-trial hearing Sept. 20.

In addition, five others suspected of being recruiters have been arrested in the investigation and are scheduled for preliminary hearings Aug. 21.

August 9, 2006

Pennsylvania Attorney General Tom Corbett has initiated criminal charges against a Lancaster County man in connection with an apparent \”slip and fall\” insurance fraud scheme.
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Corbett said agents with the Attorney General\’s Insurance Fraud Section identified the defendant as Donald Lee Lucas. Lucas was arrested and charged with one count each of insurance fraud and theft by deception.

According to the charges, Lucas, in May 2004, filed an insurance claim with Westfield Insurance Company stating that on Feb. 1, 2004, he was walking home from his brother\’s house and on his way to get a newspaper, slipped and fell on the ice covered sidewalk in front of the Columbia Historical Society on South Street in Lancaster. Lucas claimed that he broke his ankle in the fall and required surgery. The insurance claim sought compensation for medical expenses, wage loss and other damages.

In January 2005, the insurance company claimed that it received a letter from the defendant\’s attorney Christopher DeMarco, seeking $65,000 in reimbursement for Lucas. DeMarco also included the defendant\’s medical records, photos of his ankle injury and pictures of the condition of the sidewalk at the time of the alleged accident.

According to the complaint, in July 2005 the Westfield Insurance Company and DeMarco agreed to settle the case in the amount of $15,000. Three months later, the Attorney General\’s Insurance Fraud Section said it received a tip call from a private citizen that claimed Lucas lied to insurance representatives and filed a fraudulent claim.

\”Agents investigating the tip call spoke to witnesses that stated Mr. Lucas actually fell while pushing his brother\’s car out of the snow in an ally beside the American Veterans Club on Super Bowl Sunday,\” Corbett said. \”The claim that he fell in front of the Historical Society was an attempt to illegally fund his medical costs.\”

Lucas was arraigned before Lancaster County Magisterial District Justice David P. Miller and was released on $10,000 unsecured bail. A preliminary hearing has been set for Sept. 20.

Source: Pennsylvania Attorney General

Tuesday August 08, 2006 6:27am

GREENBELT, Md. (AP) – A Wheaton woman has been sentenced for a second time to 40 years in prison for her roles in the deaths of three men. The woman, dubbed \”The Black Widow\” by police investigators, was convicted of insurance fraud in connections with the deaths.

Josephine Gray was originally convicted in 2002, but appealed her sentence after the Supreme Court found that the mandatory federal sentencing guidelines in use at the time were unconstitutional.

U.S. District Court Judge Deborah Chasanow resentenced Gray to 40 years in prison.

The men included two of Gray\’s husbands and a long-time live-in boyfriend. All three men had been shot to death. Between 1974 and 1996, Gray received about $160,000 of the three men\’s life insurance benefits.