Insurance Claims Investigation News

By Arkansas Business Staff
2/14/2007 3:54:09 PM

Arkansas State Insurance Commissioner Julie Benafield Bowman said Wednesday that a suspected insurance fraud ringleader, Frederick Watson, has turned himself in to Little Rock Police.

The state Insurance Department said Watson is alleged to have masterminded a car crash ring operation that defrauded insurance companies of hundreds of thousands of dollars over 12 years.

Among his alleged accomplices were his cousin, Mark Watson, and Rebekah Rahn, both of whom were arrested Monday.

Bowman said investigators from the department’s Criminal Investigation Division began looking into the case after an adjuster with an insurance company said she thought one of her clients had been intentionally crashed into while driving.

\”A common thread soon began to emerge as the department looked at police accident reports,\” Bowman said in a news release. \”The investigators began to see the same vehicle involved in more than one accident and similar names for drivers involved.

Watson and others in the ring are alleged to have staged more than 40 accidents during their years of operation, choosing targets as they left driveways or traveled through intersections. Some crashes caused injuries.

PHOENIX Approving a measure aimed at helping to curb insurance fraud, the Senate on Monday voted to require that a person reporting an auto theft also present police with a signed affidavit. The Senate approved the bill on a 30-to-0 vote, sending it to the House.

Under the bill, if an affidavit isn\’t submitted within ten days of the reported theft, the law enforcement agency that took the report would be required to remove it from criminal information databases.

The bill was supported by the Arizona Auto Theft Authority, insurance companies and police groups.

According to a legislative briefing memo, a 2004 study by the Arizona Criminal Justice Commission found that between 10 and 20 percent of all reported auto theft cases in Arizona involved insurance fraud.

A 19-year-old Dearborn man is facing at least five years in prison after he pleaded guilty today to hiring someone to torch his family\’s business for insurance purposes.

Mouhamad Bazzi pleaded guilty in Ann Arbor before U.S. District Judge John Corbett O\’Meara.

On Jan. 13, 2006, arsonists hired by Bazzi burned down The Dollar Store/Smokey Joe\’s in the Superior Plaza on Wyoming in Dearborn. The business was owned by Bazzi\’s mother and operated by Bazzi and his brother, court was told.

The fire also did significant damage to other shops in the plaza. A sentencing date was not set. Two other men were charged in the case. One awaits sentencing and the other awaits trial.

You can reach Paul Egan at (313) 222-2069 or pegan@detnews.com.

TALLAHASSEE After several months of investigations, dozens of suspects from Pensacola to Miami will be arrested the week of January 22nd for insurance fraud schemes that totaled at least $1 million. Chief Financial Officer Alex Sink announced the three-day operation as it kicked off Tuesday, stating she wants to send a strong message that Florida will not tolerate this costly crime.

In Miami, an early-morning sweep already netted three arrest of suspects accused of bilking the insurance industry on Tuesday.

\”Those who commit insurance fraud may think they are only hurting insurance companies, but insurance fraud causes real financial pain and hurts families, businesses and communities,\” said Sink, who as CFO oversees the department (DFS). \”Anyone found guilty of insurance fraud in Florida will pay for their crime.\”

The operation targets nearly 80 individuals wanted on criminal charges ranging from staging automobile accidents to grand theft, and the arrests will continue through Thursday. The division\’s operation is being organized through the division\’s regional offices. The charges are being prosecuted by state attorney offices in the various jurisdictions. Potential sentences could range from five years to 30 years in prison per count.

The majority of the charges fall largely under workers\’ compensation fraud, including both claim fraud and employer fraud. The second-largest category of charges involves auto insurance fraud, from staged accidents to fraudulent Personal Injury Protection (PIP) insurance claims. Some of the cases involve insurance agents accused of defrauding customers and several homeowner claim fraud cases.

Insurance fraud in Florida has been estimated to cost Floridians as much as $1,400 a year. Depending on the estimated loss amount, the department will pay up to $25,000 for information directly leading to an arrest and conviction.

To report insurance fraud, call the department\’s Fraud Fighters hotline at 1-800-378-0445 Click here to report incidents of insurance fraud. Complaints can be tracked online.

Florida\’s chief financial officer has launched a nationwide search for an experienced and talented law enforcement official to lead the Department of Financial Services\’ Division of Insurance Fraud (DIF).

The government said Coalition Against Insurance Fraud numbers show Floridians pay an additional $1,400 in insurance costs each year due to fraud.

\”We\’re looking for a highly motivated law enforcement official to lead our nationally recognized team of insurance fraud detectives,\” CFO Alex Sink said. \”We\’re going to strengthen our efforts to crack down on this growing crime in our state.\”

DIF is one of 40 state anti-fraud bureaus and one of 32 with police powers.

The state said DIF is also directly responsible for annual court-awarded restitution to insurance fraud victims averaging more than $100 million a year.

The fraud division, as the law enforcement arm of the Department of Financial Services, is responsible for investigating crimes associated with insurance claim fraud, insurance premium fraud, workers\’ compensation claim fraud, workers\’ compensation premium avoidance and diversions, insurer insolvency fraud, unauthorized insurance entity fraud and insurance agent crimes.

The division\’s investigators also investigate viatical application fraud, defalcations of escrow funds held in trust by title insurance firms and non-Medicaid-related health care fraud.

Earlier this month, Sink promoted former DIF Director Eric Miller to deputy chief financial officer. John Askins is serving as acting director of DIF.

SAGINAW, Mich. A prosecutor says Saginaw\’s mayor pro-tem will be charged for setting her luxury car ablaze last March and trying to cash in with a fraudulent insurance claim.
Wilmer Jones-Ham, the former mayor, faces felony charges of arson of personal property and filing a fraudulent insurance claim. The charges carry five- and four-year sentences.

Jones-Ham in the past has cast suspicion on the city\’s former city manager for torching her Mercedes. She also gave the Saginaw News a notarized document she claimed was a confession from her handyman.

Investigators haven\’t been able to substantiate either claim.

No date has been set for an arraignment.

(WSGW)

MIAMI (Reuters) – A Florida doctor pleaded guilty on Wednesday to securities fraud in connection with a life insurance scam that cost 28,000 investors nearly $1 billion, prosecutors said.

Clark Mitchell, the former director of a prominent AIDS clinic who was arrested more than five years ago on insurance fraud charges, agreed to be responsible for restitution of $367 million to investors in Mutual Benefits Corp., a Fort Lauderdale company that sought investors in life insurance policies held by elderly or ill people.

U.S. District Judge Paul Huck accepted a plea agreement and set sentencing for March 7, 2007, prosecutors said. It is one of several civil and criminal cases stemming from the company.

Prosecutors said Mutual Benefits directed an international network of agents who conned people into investing in viatical settlements, which are agreements to buy the life insurance death benefit of a terminally ill or elderly person in return for a lump-sum payment.

The investors were led to believe that their investments were safe because doctors would determine the life expectancy of the insured person.

But prosecutors say MBC officials — not doctors — determined the life expectancies which were fraudulently low. Mitchell and other doctors who worked for the company signed affidavits and letters that were sent to investors to make their investments seem less risky.

Prosecutors said Mutual Benefits\’ investors lost $956 million.

Mitchell also pleaded guilty to conspiracy to commit health care fraud in connection with his work at a South Florida AIDS clinic. Prosecutors said he inflated Medicare bills by more than $500,000 by claiming AIDS patients received more extensive treatment that they actually did.

Under the terms of the plea agreement, Mitchell faced 10 years in prison and a fine of more than $5 million, in addition to the restitution.

Eagle-Tribune

The fight against auto insurance fraud is finally starting to pay off for drivers in Lawrence and across Massachusetts. But there\’s more work that needs to be done to create a truly fair and competitive insurance system in the state.

Last week, Insurance Commissioner Julianne Bowler announced an average 11.7 percent cut in premiums for 2007, the largest decrease since 1978. The rate cut means an average savings of $119.61 per vehicle across Massachusetts, where the average annual premium will be $898.81.

In Lawrence, where insurance rates are among the highest in the state, drivers with good records could see their premiums fall by more than $200. Under an agreement brokered by state Sen. Susan Tucker, D-Andover, Lawrence drivers will see a greater premium reduction that the state average to reward residents for the city\’s fight against auto insurance fraud.

The rate cut is welcome and overdue. Lawrence police and the Essex County district attorney\’s office launched an auto fraud task force in the city in 2003. Since then, 213 people have been charged with auto insurance fraud and claims have fallen by $30 million. The results from Lawrence has led to the creation of similar efforts in other cities with high rates of fraud.

The rate reduction comes after another welcome change in auto insurance in Massachusetts, one that puts greater pressure on insurers to continue the fraud fight. All drivers in Massachusetts are required to have auto insurance. In the current system, the state assigns high-risk drivers to companies, but then allows them to dump their policies into a pool where costs are shared by all insurers. Under this system, smaller companies end up supporting a greater share of the cost of insuring high-risk drivers. This, critics say, has resulted in a number of companies refusing to do business in Massachusetts.

Bowler has ordered a new system under which high-risk drivers will be randomly assigned to insurers based on their share of the market. Bowler says the system forces insurers to take more aggressive steps to control losses and reduce fraud. A similar system is in place in 43 states.

Lost in all this is Gov. Mitt Romney\’s proposal to reform auto insurance through a gradual reintroduction of a free market – moving away from state-mandated rates to premiums set by driver records and competition for customers. Romney\’s proposal died in the Legislature this past year.

New Gov. Deval Patrick should pick up the auto insurance reform effort during his first term in office. Reform that allows competition among insurers is the only way to make certain that good, honest drivers will continue to see lower rates for their car insurance.

Eight people have been charged with defrauding insurance companies by registering commercial motor vehicle fleets in upstate New York to avoid higher premiums in New York City.

The following people were arrested on multiple counts of second- and third-degree insurance fraud and first-degree offering a false instrument:
Peter Albano of Brooklyn
Richard Shavel, on Monroe
Harris Thorpe of Bronx
Petar Bojilov of Bronx
Roben Allonce of Brooklyn
Zeev Lichtick of Brooklyn
Roman Ashurov of Brooklyn
Winston McLean of Rosedale

Albany County DA David Soares said that by falsely registering their vehicles in counties where insurance rates were lower, they reduced their insurance premiums by a total of $1.4 million.

Most of the vehicles were registered at an address in East Berne.

Soares said, \”Any time insurance companies are defrauded like this, law abiding citizens of Albany County pay the price.\”

The district attorney\’s office worked with numerous agencies, including the state Insurance Department and New York City police, in the investigation.

he owners of a San Diego area roofing company that has offices and operations in the Central Valley have been ordered to pay $3 million in restitution to State Compensation Insurance Fund and have been sentenced to three years’ probation, State Fund says.

Paul Mayer and David Archer, owners of Mayer Roofing, were ordered to pay full restitution to State Fund plus investigation costs after pleading no contest to felony charges of conspiracy and workers\’ compensation insurance fraud.

Along with Mr. Mayer, 52, and Mr. Archer, 62, two other officials of the company were previously sentenced in this case.

A grand jury indictment in February said that from 2001 to 2003, company officers created a scheme that underpaid workers\’ compensation insurance premiums by $3 million. They created false payroll records thus understating the company\’s workers\’ compensation premium, prosecutors said.

\”These unfair practices enable unscrupulous employers to underbid honest competitors,\” says San Diego County District Attorney Bonnie Dumanis. \”This results in honest employers losing jobs and ultimately driving them out of business.\”

The fraud was first uncovered by a routine audit by the State Compensation Insurance Fund.

Mayer Roofing was licensed in 1993, and does business throughout Southern California and Fresno. It employs nearly 450 employees and is engaged primarily in new home construction. The company is headquartered in Escondido and has offices in Riverside, San Fernando and Bakersfield.

A couple who plotted to swindle insurance companies out of more than £600,000 by pretending the husband had died suddenly in India have both been jailed for two years.

Geta and Sharanjit Gill almost got away with it until a dogged insurance investigator traveled to India and made inquiries at temples, the crematorium, a hospital and funeral directors.

He discovered Sharanjit Gill was still alive and he informed police in Britain.

Outlining the case at Luton crown court prosecutor Michael Speak said mystery surrounded a death certificate which purported to show that Mr Gill died from a heart attack on Nov 19 2003, then aged 29.

The hospital where he was supposed to have been treated in Cartarpur, was little more than a doctor\’s surgery. The doctor who signed the certificate at first said it was genuine but then retracted that and said it must have been stolen and forged.

\”We cannot say that the doctor was implicated,\” said Mr. Speak.

He said the certificate, in Punjabi, and its English translation was sent to four insurance companies to claim on five life assurance policies the couple had taken out between August 1999 and October 2002.

Mr Speak said: \”The total the \’widow\’ would have been paid had the policies been settled was in excess of £626,000.

\”The companies – Norwich Union, AXA, Britannic and National Deposit – received calls from Mrs Gill in Nov and Dec 2003 informing them that Mr. Gill had died whilst in India.

\”She returned the claims forms in Dec and Jan 2004 enclosing the death certificate.

\”But because the sum of money was considerable and because the death was overseas and insurance investigator was sent to make inquiries.

\”First he went to meet Mrs Gill who told him the family had gone to India in Nov 2003 and her husband woke at 4 am with chest pains. He was taken to hospital and pronounced dead.

\”The investigator then went to India to make further inquiries. He discovered first of all that the hospital was not a real hospital in the conventional sense but more a doctor\’s surgery.

\”There were no records of the death at the crematorium and he was not satisfied with what he was being told and it became increasingly evident that Mr. Gill was not dead at all.\”

The court was told that after police became involved Mr Gill returned to England and the couple were interviewed. They said that he had been put under pressure by an uncle and other relatives in India and he in turn had put pressure on his wife to make the claims.

Mrs Gill, 40, who was British born and taking a five year career break from her Home Office job to look after their two children, wept as she was jailed.

She and her husband, now 32, both of Spring Road, Kempston, Beds, both pleaded guilty to six charges of attempted deception between November 2003 and Mar 2004.

Judge Richard Foster told them: \”If this deception had been successful rather than being uncovered by an astute investigator, you would have been richer to the tune of more than £600,000 and would no doubt have reorganised your affairs to reunite your family and benefit from your ill gotten gains.

\”Greed played a considerable part in your thinking when you decided to go through with this attempted fraud.

\”I have thought long and hard about the effects on your children, but those effects are the fault of you and your husband. Being a mother cannot give you immunity from your criminal conduct.\”

Cyril Ume, defending the couple said they maintained that they were under considerable pressure to commit the offence. Mr. Gill had stayed on in India alone and had then been held by relatives, his documents seized and told he would not be allowed to return home.

His wife only went along with the plan because she feared for her husband\’s safety and the safety of his parents.

\”Their seven year old son and four year old daughter are the real victims of their father\’s wrong doing and there are serious concerns about their care if both parents are sent to prison.

\”They feel genuine remorse and wish they could turn the clock back.\”

6 December 2006

Thirty-five people were charged with insurance fraud following a two-year sting operation that involved federal officials operating a fake chiropractic clinic in Northeast Philadelphia.

The clinic, called Injury Associates, solicited people to take part in a scheme to submit false paperwork to insurance companies for personal injury claims in alleged car accidents.

U.S. Attorney Pat Meehan said undercover FBI personnel conducting the sting told people who came into the office that they would be part of a fraud and gave them the chance to not participate. No medical care was provided in the office.

Those charged were 31 fake patients, a lawyer and three \”runners\” who went out into the community to find fake patients.

According to Meehan, $1.5 million in fraudulent claims were filed during the sting operation and $350,000 was paid out by insurance companies that included Allstate, Nationwide and State Farm.

October 25, 2006

Michigan celebrated the 21st anniversary of the H.E.A.T. (Help Eliminate Auto Thefts) program with its annual award program this week.

According to the official release, since its inception in 1985, H.E.A.T., with its partners in law enforcement and the insurance industry, has helped lead to the recovery of over 3,500 vehicles and more than $43 million in stolen property, a $2 million increase from last year. Over the past 21 years, H.E.A.T. has awarded over $2.9 million in rewards and has helped in the arrest of nearly 3,000 auto theft criminals.

\”H.E.A.T. is thriving and continues to be a vital resource for law enforcement, insurance companies and citizens throughout Michigan,\” said Terri Miller, director of H.E.A.T. \”Since our inception in 1985 we have collaborated to make a significant impact on statewide auto theft prevention. I would like to congratulate everyone on their dedication and look forward to our continued success.\”

Michigan State Police (MSP) Director Col. Peter C. Munoz keynoted the anniversary breakfast event before an audience of nearly 200 law enforcement investigators, insurance representatives and government officials.

\”Thanks to the confidential tips residents provided through H.E.A.T.\’s toll-free hotline,\” said Col. Munoz, \”Michigan law enforcement officials were able to recover $43 million in stolen property, an impressive number. This success stems from the invaluable partnership between H.E.A.T. and the community in fighting auto-related crime.\”

H.E.A.T. presented several awards, including the prestigious William V. Liddane Award and the H.E.A.T. Investigator of the Year Awards. The William V. Liddane Award recognizes an individual who has demonstrated an outstanding commitment to the fight against auto theft in Michigan, while the H.E.A.T. Investigator of the Year Awards honor law enforcement for their tenacity and hard work in auto theft investigation, arrest, recovery and prevention.

This year\’s recipients are: William V. Liddane Award, Lori Davis, Special Investigations Unit (SIU) investigator with Allstate Insurance Company; HEAT Investigator of the Year Awards, Detective Chris Cole of the Oakland County Sheriff\’s Department Auto Theft Unit; Macomb Auto Theft Squad (MATS); Genesee Auto Investigative Network (GAIN); and, Detectives Esteban Moreno, Robert Zylstra and William Frederick of the Grand Rapids Combined Auto Theft Team

Anyone with information on auto theft, carjacking, chop shops, auto theft-related identity theft and auto insurance fraud in Michigan is encouraged to call the H.E.A.T. tip line, (800) 242-H.E.A.T., or log on to www.miheat.org to provide a confidential report. H.E.A.T. works with Michigan law enforcement agencies to follow up on tips.

Source: H.E.A.T.

BY MARY MUSIC
Appalachian News Express

“There are a lot of injured people out there who are getting a raw deal,” Prestonsburg attorney Tom Moak said about a suit he filed in Pike County against the Kentucky Workers Compensation Fund (KESA) and its private investigator.

Moak, representing Beaver resident Michael Adams, is suing Shepherdville-based KESA and Tri-State Investigations LLC., claiming that the companies wrongly accused Adams of trying to fake a work-related injury to get compensation.

According to the suit, Adams was injured after he fell down a hill while carrying rolls of wire to install a chain link fence for Ray’s Fence Company, based in Pikeville.

After he reviewed the workers’ compensation claim, Administrative Law Judge Grant Roark awarded Adams, who never returned to work, income and medical benefits.

Tri-State’s investigator, W. Johnson, conducted a surveillance of men working at the Green Meadow Country Club in Pikeville and recorded a video tape, falsely reporting that Adams was working, when, in fact, Moak argues, he was misidentified by the investigator.

Johnson’s report was forwarded to KESA, covering workers’ compensation claims for Ray’s Fence, and the organization filed a motion to reopen the claim, charging that Adams was guilty of fraud.

Moak claims that KESA made no effort to properly identify the person on the video tape before they contacted the Office of Workers’ Claims and told officials there that Adams faked his injury.

KESA told the Office of Workers’ Claims and Dr. Timothy Kriss that Adams was videotaped bending, shoveling, moving large objects, getting in and out of a vehicle and tossing or throwing objects without any visible disabilities. Kriss issued an opinion stating that Adams “grossly misrepresented his activities and his disability,” Moak claims.

Adams was accused of trying to defraud his employer and of committing perjury. His medical benefits were cut off.

Moak also alleges that KESA threatened Adams’ treating physician, Dr. Alan Hyden, to keep him from continuing to treat Adams, who has since paid his own medical expenses.

The “false and misleading information” relayed about Adams caused him “shame and humiliation” within his community, and with the Office of Worker’s Claims, Hyden and his office staff, and the attorneys and staff of the Eric C. Conn Law Office, who worked with Adams to get workers’ compensation.

The suit includes an affidavit signed by Teaberry resident Franklin Mitchell, the owner of Franklin Mitchell Construction Company, who identified the man believed to be Adams as Mickey Newsome, one of his employees. He said he knew Adams, and that Adams never worked for him or his company, as it was alleged by Johnson.

Referring to the misidentification as “outrageous conduct,” Moak asks Circuit Judge Steve Combs to enforce Adams’ compensation award and medical benefits.

He’s also seeking compensatory and punitive damages for libel, slander, the “intentional infliction of emotional distress, defamation, intentional interference with a contractual relationship and intentional interference with a doctor-patient relationship in order to cause Adams’ doctor to change the way he was treating Adams.

Moak also requests a public apology from the companies.

Attempts to reach KASA and Tri-State Investigations were unsuccessful Friday.

Harold Ray, who owned Ray’s Fence when Adams contracted work with them, would not comment.

BY MARK JOHNSON
ASSOCIATED PRESS

Frank Houghtaling is accused of running an insurance fraud ring. (LORI VAN BUREN/Albany Times Union via AP)

ALBANY, N.Y. — Investigators across the country are trying new tactics to crack down on the old problem of auto insurance fraud.

The tools to combat the crime from health insurance fraud mills in New York to \”swoop and squat\” schemes in California include wiretaps, undercover agents and prosecutors who view auto fraud as organized crime.

In 2001, New York Gov. George Pataki appointed state Attorney General Eliot Spitzer as special counsel to investigate the fraud that has helped drive up New Yorkers\’ auto insurance premiums to second highest in the nation, trailing only New Jersey.

New York Deputy Attorney General Peter Pope, who oversees 100 lawyers and 100 investigators statewide as the head of the office\’s criminal division, said that going after street-level perpetrators isn\’t enough.

Instead, he\’s taken an organized crime approach, using wiretaps, undercover agents and investigative grand juries to nab doctors, lawyers and the \”silent owners\” of medical fraud mills that bilk the insurance industry out of $25 billion to $30 billion a year.

In many cases, syndicates running fraud operations have been charged under New York\’s Organized Crime Control Act, which is used to go after larger criminal enterprises. Perpetrators are often charged with enterprise corruption, a major felony calling for longer and mandatory prison time. A conviction can carry a sentence of up to 25 years in prison.

The New York law is patterned after the 1970 federal racketeering statute, known as RICO, to combat organized crime including the Mafia and gangs in several states.

Frank Scafidi of the National Insurance Crime Bureau said fraud causes higher rates for everyone, though he and others say there are no reliable estimates of how much it adds to the average consumer\’s bill.

The yearly cost is \”enough that it\’s really hurting everyone\’s wallet,\” said Howard Goldblatt of the Coalition Against Insurance Fraud.

In March, an Albany, N.Y., boxer and his family were charged with running a ring that staged minor car crashes and made false insurance claims. Frank Houghtaling, his brother, sister-in-law, father, wife and another woman were named in a sealed indictment after a two-year investigation, prosecutors said. Authorities alleged the 30 to 40 incidents typically involved unwitting drivers of other vehicles in fender benders. The charges are still pending court action.

In New York City in March 2004, 11 people and seven companies were charged in connection with a scheme that prosecutors said defrauded insurance carriers out of $1 million. Doctors, lawyers and others were accused of soliciting accident victims to be treated at IK Medical, a clinic run by Dr. Irina Kimyagarova. The indictment alleged that the clinic was controlled by Emil Izrailov and Robert Shimunov, two silent owners who had no medical training.

Once patients came to the clinic, they received a wide range of unnecessary treatments, including physical therapy, acupuncture, psychotherapy and dental care, according to the indictment. The case is scheduled for trial this month.

\”You don\’t really make an impact until you make a jump into clinics and the silent owners,\” Pope said, referring to the scam organizers who set up bogus corporations and hire doctors to run them. Under New York law, only doctors are allowed to run medical clinics.

Traditionally, prosecutors focused on the people claiming false accidents and the \”steerers\” who recruited them to take part in the fraud.

The shift in tactics led to the arrests of \”those higher up the ladder,\” Spitzer\’s office said in a report released in July.

In California, police are trying to educate the public about potential fraud schemes.

In one common scam, called the \”swoop and squat,\” a motorist is driving along at a safe distance from the vehicle in front of him. Another car will then begin to tailgate the unsuspecting driver while another vehicle will pull up alongside, honking and swerving to draw attention. Just as the unwitting driver is distracted, the car in front slams on the brakes, causing a rear-end collision.

The hit car is usually filled with people who then claim injuries, said Rich Halberg of the Sacramento, Calif., office of Allstate Insurance.

\”Consumer awareness is really important,\” he said, noting that California has about $1 billion in auto insurance fraud annually.

MIAMI — Investigators across the country are trying new tactics to crack down on the old problem of auto insurance fraud — especially in Florida, where three cities are on the top ten list for staged accidents, with Miami at No. 1.

In a recent survey, Miami was in first place in America for staged accidents and Los Angeles was No. 2, according to Rich Halberg with Allstate Insurance. Houston, Chicago and Philadelphia rounded out the top five and New York City ranked ninth.

Since 2000, police and prosecutors in Miami have made nearly 1,100 arrests in cases with fraudulent claims topping $36 million, said Nina Banister, a spokeswoman for the Florida Division of Insurance Fraud.

Many of the arrests came after authorities funded two prosecutors to prosecute only fraud cases. In the first year, there was a 25 percent increase in arrest and convictions, Banister said.

In Florida, lawmakers also increased the penalties for staging accidents and just this past year heightened the penalties for claiming injuries in so-called phantom accidents that never occurred. The laws came after Orlando and Tampa both moved into the top 10 cities for staged accidents.

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.

****

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.