Posts Tagged ‘auto insurance’

Federal judge OK’s lawsuit claiming RICO violations in PIP scam

Wednesday, April 30th, 2014

Federal prosecutors used to use the Racketeer Influenced and Corrupt Organizations Act, or RICO, to go after drug dealers. Now, the law is being used in civil court to go after another kind of crook, people and companies that commit Personal Injury Protection (PIP) fraud.

GEICO sued two chiropractic centers in Orlando, their founders and other people who participated in a scheme to stage auto accidents, report fake injuries and soak insurance companies for medical services not needed and not provided.

Even when there were real accidents, the people sometimes claimed injuries that weren’t real and received treatments when unnecessary. The total tab: $2.3 million.

The auto insurer went after everybody in July 2012 in a legal complaint that was 143 pages long. The claims started with civil conspiracy and unjust enrichment; they ended with violations of the RICO and the Florida Deceptive and Unfair Trade Practices, according to an article by Courthouse News Service. As with most staged-accident scams, the defendants offered money to people who would help stage accidents and recruit people to be passengers and, later, patients.

The defendants fought the civil charges, but the U.S. District Court for Florida’s Middle District, Orlando Division, adopted the recommendation of a federal magistrate that all counts but one move forward.

Why is that bad news for the defendants? GEICO can seek triple damages. That award would be a huge win for the insurer and send a strong message to criminals that fraud can be costly.



What sets off the alarms in PIP fraud investigations? Not accidents

Sunday, April 20th, 2014

You don’t have to read more than a few posts here to know the biggest red flags for Personal Injury Protection (PIP) fraud. State, local and private investigators see them every day.

The National Insurance Crime Bureau has compiled what set off the alarms most often from 2010 through 2013:

  1. Faked or exaggerated injuries: nearly 5,000 referrals
  2. Medical provider: nearly 5,000
  3. Billing for services not rendered: 4,000-plus
  4. Excessive treatment: 4,000-plus
  5. Lack of cooperation from insured: about 2,900

Let’s look behind the numbers. Faked or exaggerated injuries relate to minor injuries that are made into big ones, or injuries that don’t exist except to file insurance claims. Until PIP reform, medical clinics could submit bills for up to $10,000 per person for an accident. In cases that later generated convictions, investigators found that people would be paid to say they were injured in car wrecks that never happened.

Medical providers would have the patients sign over their insurance benefits and send invoices to insurance companies. Investigators would look for patterns of activity that let them to question the claims. One suspicion: Services were not rendered.

When injuries were documented, investigators looked into whether there was excessive treatment. Again, in the days before PIP reform, clinics would schedule treatments right up to the dollar limit. When investigators sat down the people about their injuries and treatments, they sometimes encountered a lack of cooperation from the insured. Why was that? The lack of responses made investigators dig deeper.

Chiropractor participates in PIP ‘fraud factory’ and is convicted for it

Tuesday, March 11th, 2014

The assembly line began at the site of staged accidents and ended in the wallet of a Naples chiropractor. The factory churned out more than $100,000 of fraudulent billings for Personal Injury Protection (PIP) claims for four years until authorities shut down the operation. The ringmaster is scheduled for trial this month.

A Collier County jury has found chiropractor Esmaeel Samaliazad, 49, guilty of guilty of organized scheme to defraud, insurance fraud involving more than $20,000 and insurance fraud involving less than $20,000.

“It basically was a fraud factory and they paid people to actually be patients,” prosecutor Michael Anthony Pica was quoted by the Naples Daily News as telling jurors during his summation. “(Patients) were paid, they staged an accident and then they didn’t receive treatments. This was a very corrupt clinic.”

As in some cases involving PIP fraud, Samaliazad wasn’t the mastermind. Prosecutors say Feghen Delva, 44, a chiropractic assistant, set up Cardinal Chiropractic Center in July 2008 and paid Samaliazad and another chiropractor a monthly fee to be straw owners to avoid state licensing requirements. Samaliazad worked in Naples two days a week, while also working at Delva’s clinic in Fort Myers.

The deal was a good one for Samaliazad. He earned more than $100,000 for basically looking the other way while the clinic committed fraud, Pica told jurors. They agreed and found him guilty on multiple accounts; he faces up to 15 years in a state prison on the top offense and five years each for the others.

Here’s how the fraud worked, according to published reports:

Delva hired recruiters to find Hispanic drivers to crash into vehicles in which Haitians were passengers. Delva paid the Haitians $2,000 each for agreeing to undergo 40 treatments, only some of which they received. Chiropractors and massage therapists, including James Greenhut, sometimes double-billed for treatments. Patient recruiter Guerold Dolcine acted as a lookout outside the clinic, watching for insurance and government inspectors.

After being alerted by a receptionist, the Florida’s Division of Insurance Fraud, the Office of the Attorney General, the National Insurance Crime Bureau, Geico and Direct General began investigating. They arrested five people in May 2012. Greenhut, 54, pleaded guilty. Dolcine, 38, pleaded guilty in November to obtaining more than $50,000 by fraud and was sentenced to time served in county jail.

Delva and office manager Marie Stephania Zamy, 28, face grand theft charges; Delva faces a money laundering charge in their joint trial scheduled for March.

Double the auto insurance fraud for Jacksonville resident?

Sunday, March 2nd, 2014

Stacy Lasondo Jackson has been charged in North Carolina with 10 counts of insurance fraud. But is it the first time she has committed this kind of crime?

Investigators with the N.C. Dept. of Insurance say that while she was living in Fayetteville, N.C., she obtained several thousand dollars from multiple insurance companies by filing fraudulent insurance claims for damage to her automobile and motorcycle between January and May 2013. They say that Jackson claimed the same vehicle was damaged more than once. Sometimes, there was no damage.

However, this may not be her first offense of this type. Jackson, 39, is from Jacksonville, Fla. According to North Carolina’s department of insurance, she was arrested on similar charges in Florida on Dec. 20, 2013. She lived in Jacksonville until she was extradited to North Carolina with the cooperation of Florida Dept. of Financial Services Division of Insurance Fraud and the Jacksonville Sheriff’s Office.

On Feb. 25, Jackson was arrested by N.C. Dept. of Insurance criminal investigators and placed under a $10,000 bond.

‘Sledghammer’ swings around again, clobbers

Monday, February 17th, 2014

Operation Sledgehammer, now in its sixth chapter, has put more Personal Injury Protection (PIP) fraudsters behind bars and fined them millions of dollars. A massive effort by federal, state, local and private investigators is paying big dividends; this type of action should be commended and receive regular funding from public and private sources.

Between June 2011 and now, 92 defendants have been charged for their participation auto insurance fraud. Federal prosecutors have charged 56 of them and won more than $5 million. The Palm Beach County State Attorney’s Office has charged the other 36.

Here are the results Operation Sledgehammer VI, according to an FBI announcement:

  • Elias Sebastian Munguia — 102 months in prison, three years of supervised release, restitution of $3.49 million
  • Aleida Capdevila — 53 months in prison, three years of supervised release, restitution of $1,04 million
  • Yenisleydi Ramos — 50 months in prison, three years of supervised release, restitution of $1.67 million
  • Juan Francisco Avon — 38 months in prison, three years of supervised release, restitution of $$866,801
  • Oscar Montiel Martinez — 76 months in prison, three years of supervised release, restitution of $1.36 million
  • Teresita Mena — 66 months in prison, three years of supervised release, restitution of $1.32 million

The defendants pleaded guilty to a number of charges related to mail fraud and money laundering. Here’s how the criminals operated, according to the FBI:

Between approximately October 2006 and December 2012, the conspiracy members staged automobile accidents by recruiting individuals to participate in the accidents. Martinez and Mena served as accident participants and Martinez and  Contino recruited others to participate in staged accidents. The participants were referred to as “Perro” and “Perra” or “Macho” and “Hembra.” “Perro” is Spanish for dog and “Hembra” is female.

Clinic owners, including Munguia, submitted false insurance claims through chiropractic clinics that were controlled by members of the conspiracy. The true owners of the chiropractic clinics, including Munguia, recruited individuals who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics.

The co-conspirators also hired licensed chiropractors and licensed chiropractic physicians’ assistants, including Avon, who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Those employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services.

The FBI says that 21 clinics participated in this scheme. Munguia was the “true owner” of three of those clinics. Munguia’s aunt, Aleida Capdevila, served as the office manager of two.

Once fraud proceeds were received from the insurance companies, the clinic owners, including Munguia and Capdevila, also recruited individuals, including Martinez, Ramos, and Mena, to help the clinics launder the insurance proceeds.

The U.S. Attorney’s office in Miami thanked the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force “for their outstanding work in this case.” The office also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance.

After ‘examinations,’ investigators produce PIP-related arrests

Wednesday, February 5th, 2014

The Miami man was not properly licensed and the clinic owner never performed medical services. But that didn’t stop the two from trying to collect on Personal Injury Protection (PIP) claims.

An investigation by the Division of Insurance Fraud of the Florida Department of Financial Services led to the arrests of Leonardo F. Marquez Garcia and Dayleann Marie Vallejo-Ruiz on charges of insurance fraud.

The DIF found that Garcia, of Miami conducted what was called ‘initial examinations” on auto accident victims. He then sent them to Injury Rehabilitation Center, which Vallejo-Ruiz owns, for physical therapy treatments that qualified for PIP claims.

Vallejo-Ruiz, who is a licensed massage therapist from Orlando, arranged for patients to sign blank treatment forms. Those were sent to the insurance company requesting PIP payments for services never provided, investigators say.

“This kind of deceit and abuse hurts all Floridians in the form of higher premiums,” said CFO Jeff Atwater in a news release. “I am proud of my team for putting a stop to this fraud and for their continuing success keeping other fraudsters off our streets.”

Investigators became aware of irregularities after Allstate Insurance Co. received bills for alleged medical treatments between Feb. 3 and March 16, 2012. Marquez Garcia filed PIP claims for his initial examinations made on behalf of Global Rehabilitation Center in Miami Lakes.

However, the center is not an Area of Critical Need facility, which can be a county health department, VA clinic, community health center, or a facility in a federally designated Health Professional Shortage Area.

Marquez Garcia, while an Area of Critical Needs doctor, is not licensed to practice medicine. So, Garcia was also charged with the unlicensed practice of medicine for operating outside the scope of his license, according to the DIF.

Additional arrests are expected. Each defendant faces up to 15 to 20 years in prison.

Auto insurer, Florida DIF partner to bust clinics on PIP fraud

Monday, November 18th, 2013 WBBH News for Fort Myers, Cape Coral

It took a year, but undercover investigators have taken down two medical clinics in southwest Florida that filed fraudulent Personal Injury Protection (PIP) claims. The staged-accident scam was a lot like others in Florida that push up drivers’ insurance rates.

Nationwide Insurance worked with state investigators to learn who was organizing fake car crashes in which uninjured passengers would claim that they needed medical treatment.

Participants would sign documents at Evans Rehab Center on Evans Avenue in Fort Myers, but receive no treatment, according to a witness. The clinic then sent PIP claims to auto insurers.

“Insurance company investigators came to us and reported that they had suspicions that Evans Rehab was billing for services not rendered,” Lt. Mark Fritz with the Florida Department of Financial Service’s Fraud Division  told WINK News. “There was a recruiter that was referring patients to that clinic. We had a traffic accident report with their names on it and that’s what got us in the doors.”

The investigation then extended to Charlotte Wellness and Rehab on Kings Highway in Port Charlotte.

“Each clinic, they were required to visit 40 times,” Fritz told the TV station. “With the 40 times, it maxed out the PIP payment. A lot of times, they’d go there and sign a form multiple times for five visits, but they really didn’t have to go all those 40 times.”

The investigation also found that Charlotte Wellness did not have the proper licensure requirements, according to an announcement from the Florida Division of Insurance Fraud.

In late October, investigators arrested:

  • Clinic owner Gerard Jean Stephen Valere, 51, for patient brokering and attempt to solicit, conspire
  • Facilitator Joe Gevans, 51, on criminal solicitation and patient brokering
  • Chiropractor Ronald Woodley, 63, for filing a false health clinic application
  • Jordany Estimond, 44, on charges of patient brokering and attempt to solicit, conspire
  • Massage therapist Andres Bravo, 52, on a charge of grand theft
  • Receptionist Gloria Feliz, 31, on seven counts of insurance fraud and one count of fraud

If convicted, each faces up to five years in prison. The state is looking for additional suspects connected to the clinics.

“These arrests are another great win in the ongoing fight against PIP fraud in Florida,” Florida CFO Jeff Atwater said in a statement. “I applaud the hard work of our investigators who are able to identify and shut down these destructive crime rings, which hurt Florida families by driving up insurance rates for everyone.”

PIP fraud arrests at southwest Florida clinic



Operation Sledgehammer claims more criminals, millions of dollars in restitution

Wednesday, November 13th, 2013

One of the furthest-reaching federal investigations of Personal Injury Protection (PIP) fraud has produced more prison sentences.

U.S. District Judge Kenneth Marra has sentenced Maria Testa Baceiro to six years in prison and ordered her to pay $4.2 million in restitution, the amount she collected from from Febre’s Medical Center in West Palm Beach and Universal Rehab Med Group in Miami

Testa Baceiro is the ninth person to be sentenced in Operation Sledgehammer. She had pleaded guilty to almost 50 crimes, mainly money-laundering and fraud. She has agreed to testify against others. About 40 people have been arrested; some of those indicted in June fled to Cuba.

Her boyfriend, Luis Ivan Hernandez, pleaded guilty to similar charges; he was sentenced to nine years and ordered to pay $4.2 million in restitution. He had owned six clinics in Miami-Dade and Palm Beach counties, including one with Testa Baceiro.

Two other defendants, Daviel Castro of West Palm Beach and  Aaron Freedlander of Weston, were sentenced after pleading guilty to charges of conspiring to commit mail fraud. Castro participated in staged auto accidents, recruited others to participate in fake crashes, and cashed checks. Judge Marra sentenced him to four years and 10 months in jail and ordered him to pay $1.3 million in restitution. The judged Freedlander to three years and four months in prison and ordered him pay about $900,000.




In a PIP fraud hotspot, more arrests for falsified billings

Monday, November 11th, 2013

Hillsborough County is the third-worst in Florida for Personal Injury Protection (PIP) fraud, after Miami-Dade and Broward counties. So it’s no surprise that the Division of Insurance Fraud arrested a Tampa clinic owner and put the office manager on its most-wanted list.

Clinic owner Dailin Rojas Perez, 30, was charged with racketeering and money laundering involving more than $340,000 in fraudulent proceeds. Massage therapist Devin Sweet, 27, was charged with insurance fraud for helping to  falsify records at Medical Therapy Practitioners.

That clinic worked with two other companies to bill insurance companies for services: that were either not provided or not needed; that were related to staged auto accidents; and were not eligible for payment because business licenses were fraudulently obtained. The DIF said the companies were Global Solutions Plus, owned by Yanely Campillo Hernandez, and Today’s Medical Marketing, LLC, owned by Rojas Perez.

Chiropractor Anthony Esposito told DIF detectives that he pretended to own the clinic after the real owner’s sister recruited him.

DIF detectives conducted a sweep of the clinic and found predated therapy sheets. Few patients were ever seen. Sweet admitted that he spent most of his day filling out falsified forms.

Arrest warrants for racketeering conspiracy and money laundering were issued for clinic manager Armando Diaz Tomas, 34, and his wife, billing clerk Yanely Campillo Hernandez, 31. Campillo Hernandez is believed to be in Cuba. The DIF has placed Diaz Tomas on its most-wanted list.  He had been arrested in Jacksonville earlier in the year.

ABC News investigates PIP fraud: A Nightline report

Monday, November 4th, 2013

ABC News reports on PIP fraud in Florida

Want to see just how bad PIP fraud is in Florida? Read an ABC News investigative report into the problem.

“Authorities said insurance fraud is very lucrative and suspects can potentially rake in millions. It’s estimated that personal injury fraud costs the state of Florida alone $1 billion a year, a loss that is passed along to consumers in the form of rising insurance premiums,” according to the Nightline report.

Learn more at the ABC News website.