Posts Tagged ‘auto insurance’

Auto insurance fraud: Crash a car — or burn it

Monday, May 26th, 2014

If you have looked at your auto insurance premium lately, you know that what you’re paying is probably not based on how well you drive. And you’re right. Fraud, including Personal Injury Protection (PIP) fraud, costs Florida drivers millions of dollars each year.

The money stolen through staged accidents and falsified medical claims adds about $50 per driver per year, according to estimates. Other forms of fraud, such as burning a vehicle for the insurance money, raise the bill.

A Florida insurance company and the Miami-Dade Fire Department are working together to educate investigators on how to detect when a car is set ablaze so that it can be reported as a total loss.

“The fraud in Florida is very high,” Carlos Torres of Infinity Auto Insurance told News 10 in Miami. “Usually people have a financial motive or don’t like their car anymore, so they’ll set them on fire to make them a total loss.” The video shows how criminals operate.

Another agency fighting insurance crime has teamed up with investigators nationwide. ICS Merrill in Jacksonville sends its 600 employees after all types of fraud, including PIP.

The Coalition against Insurance Fraud, based in Washington, supports that effort.

“Staged accidents have been a problem around Florida, especially in urban areas like Jacksonville,” James Quiggle, association communications director, told TV station WJXT in Jacksonville. “Sometimes you can arrest the lower level recruiters or fake patients and convince them that they need to rat out the ring members or leaders.

“There’s good research to suggest that families pay fraud tax of almost $100 a year in higher auto insurance premiums, so the cost to Florida consumers is very real.”

Tampa business owner sentenced to 2 years for PIP fraud

Friday, May 16th, 2014

To the opponents of the PIP reform law, we offer exhibit A, Dailin Rojas Perez, who perpetrated Personal Injury Protection (PIP) fraud through almost every means possible. The 2012 law was aimed at stopping people like her from ripping off the system and raising Florida auto insurance premiums.

The 30-year-old pleaded guilty in mid-May and was sentenced to 24 months of house arrest, according to an announcement from Florida CFO Jeff Atwater. Perez must pay $350,000 in restitution to insurance carriers and nearly $40,000 in investigative costs.

Her company, Today’s Medical Marketing, worked with  and Global Solutions Plus and accident clinic Medical Therapy Practitioners to fraudulently bill insurance carriers, swindling them out of $340,000. How did they do it? The clinic billed for services not rendered, participating in a staged auto accident scheme, and claimed that patients who had no injuries needed treatment.

The rampant fraud was evident in an admission by the clinic’s massage therapist Devin Sweet. He told investigators that in six weeks of working at the clinic, he had filled out approximately 5,000 fraudulent therapy forms for patients he never treated. According to one report, “Sweet stated he was surprised he didn’t have carpal tunnel after signing so many fraudulent forms. He sat at his desk and falsified medical treatment forms all day long, Monday through Friday, 9 a.m. through 6 p.m.”

A key part of the reform law — one that clinics are fighting in court — requires accident victims to visit a doctor before being referred to a clinic in order to collect PIP benefits. That extra step is proving to cut down on PIP fraud.

Doctors are more likely to play by the rules. Medical Therapy Practitioners did not. It fraudulently obtained an exemption from the Agency for Health Care Administration when chiropractor Anthony Esposito fraudulently claimed to be the 100 percent owner. Esposito told detectives from the Florida Division of Insurance fraud that he was recruited to be the straw owner of the clinic by Daysi Rojas, sister of Dailin.

Medical Therapy Practitioners tried to circumvent insurance carrier inspections by requiring them to make an appointment, which allowed the owner time to remove pre-signed treatment forms from the patient’s folder. The clinic also tried to avoid billing for undercover law enforcement officers by checking  potential patients against a list that contained suspected undercover officers.

Legitimate clinics have nothing to fear from the PIP reform law. In fact, business should be better for them once the PIP fraudsters are shut down.

Florida’s highest court removes obstacle to lower PIP premiums

Monday, May 5th, 2014

The forces trying to slow or stop Personal Injury Protection (PIP) reform have been dealt a serious blow. In late April, the Florida Supreme Court declined to hear an appeal that kept key provisions of the 2012 PIP  law in place.

A circuit court judge in Tallahassee had issued an injunction blocking parts of the law at the request of chiropractors, acupuncturists and others who claimed the law violated the state constitution by prohibiting them from providing services. An appeals court lifted the injunction, and the Florida Supreme Court declined to hear an appeal that could result in a reinstatement of the injunction.

“Recent evidence reveals implementation of the 2012 PIP reforms led to reduced fraud and suppression of the PIP portion of auto rates, yet certain individuals still sought to put the brakes on the reforms benefiting Florida’s drivers,” the The Property Casualty Insurers Association of America said in a statement.

“Floridians deserve better,” the association said, “and its members wish to see that Florida’s consumers are provided with much needed relief once and for all as we move forward. The decision by the Florida Supreme Court today is just that, a step forward.”

The business associations that brought the initial lawsuit said they will be back in court, trying again to undo the law.






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