Posts Tagged ‘auto insurance’

UAIC Reports: The latest in PIP arrests and convictions

Monday, September 30th, 2013

The bad boys of Personal Injury Protection (PIP) fraud are being arrested and convicted, just not as fast as they are committing crimes. Here’s a rundown of the latest capers that are making headlines:

  • In Cape Coral, a co-conspirator charged with conspiracy to commit health care fraud was sentenced to five years in federal prison. Dr. Stephen M. Lovell, who once ran Xtreme Care Rehabilitation Center Inc., was also ordered to pay $1.7 million, based on what he supposedly made in fraudulent profits.

He was arrested as part of Operation Whiplash, which uncovered that that Lovell falsely claimed to be owner of Xtreme Care, when in fact that and another clinic were owned by Francisco Huici Fernandez, Ernesto Diaz, and Abel de Jesus Perez. The conspirators also staged accidents and filed false PIP claims as part of the conspiracy. All of co-conspirators habe been convicted or pleaded guilty.”This is a huge victory for the insurance industry. It’s millions of dollars in possible savings,” said Ralph Garcia of the National Insurance Crime Bureau.

  • Weston chiropractor Dr. Aaron Freedlander, Hollywood licensed massage therapist Abner Llenderrozo, Daviel Castro-Martinez of West Palm Beach, and Elias Munguia of Miami, have pleaded to charges that they staged auto accidents so that they could defraud insurance companies.

Meanwhile, Sharah Simone Manning of Greenacres has been charged with filing false PIP claims for medical treatment. In one instance, she said she was a passenger in an accident in Boynton Beach when investigators found she arrived after the fact. Her insurance company paid $14,000 in claims to a chiropractic center in Delray Beach.

  • In neighboring Lake Worth, Yoel Bravo-Navaro, 33, has been charged with PIP fraud, vehicle accident fraud and grand theft. Police say he submitted $20,000 in false claims after being recruited to participate in a staged car accident. He and another man submitted insurance claims to Forest Hill Rehabilitation Center, New York Medical Rehab Center in Lake Clarke Shores, and VIVA X-Ray Medical.
  • Jonathan Gualberto, 24, of Deerfield Beach, has been charged with PIP-related fraud charges totaling $127,739. Police uncovered more than $200,000 in insurance claims for car accidents in which no one was injured. They say that Gualberto masterminded a scheme that took money from four insurance companies.

Two Florida Supreme Court decisions influence law on PIP

Friday, September 20th, 2013

Two spring-term decisions from the Florida Supreme Court will affect how personal injury protection (PIP) claims are treated in state courts. The first holds that PIP insurers may not require that a person seeking benefits first sit for an examination under oath.

Writing in the Daily Business Review, UAIC appellate attorney Thomas L. Hunker said, “The Nunez decision definitively abrogated existing precedent,” and that while the opinion “diminishes the consequences for failing to attend an examination, it does not eliminate them.”

In a second ruling, the court said that PIP insurers may not limit reimbursement to the statutory fee schedule unless they provide notice that they will do so. Hunter wrote that this new rule will have limited effect because most PIP insurers have received approval from the Office of Insurance Regulation “to amend their policies to express indicate that payments would be limited to the statutory fee schedule.”

Insurers also complied with the PIP law that went into effect on July 1, 2012. It authorized PIP insurers to limit reimbursement if they sent policyholders a notice approved by the same regulator.

Want to read the full story? See below.

Hunker DBR PIP op-ed May 30 2013

 

 

Who is preying on drivers? Looks like PIP fraudsters

Monday, September 16th, 2013

The masterminds of Personal Injury Protection (PIP) fraud rarely put themselves in danger. They hire people to crash cars and file false police reports. Those average folk take big risks for a few bucks, while PIP fraud organizers collect the lion’s share of the money from insurance companies.

So, when we hear that auto insurance companies are taking advantage of consumers, we point to Faika Khader, who was short on cash and ideas how to get it. She told police that she needed $900 and signed on to a PIP fraud scheme to earn the money.

In August 2011, Khader crashed her Dodge minivan into a car at an intersection in Boynton Beach. She filed a PIP claim with Farmers Insurance at Apex Chiropractic & Rehab Center in West Palm Beach.

She later admitted to a Farmers Insurance investigator that a man she did not previously know gave her $900 to buy an auto insurance policy. On the night of the crash, he gave her instructions on what to do after the accident, and urged her to add passengers to her van. In return, he promised her several thousand dollars.

When the Florida Department of Financial Service’s Fraud Division became involved, Khader slightly changed her story, but the essentials were the same: Cause a crash, file a PIP claim, go to the clinic, and receive $2,000.

Khader was arrested, but the two strangers who rode in her minivan were not found. She’s in the most trouble, while the scammers – including the mystery man who recruited her – have moved on. We expect that they will resurface: clinic operators that police shut down often re-open in other counties, sometimes hiding their true identities.

We might not sympathize with Khader, but we can understand why she committed the crime: She needed the money. The real victims are the driver of the car she hit and all of us, who pay higher auto insurance premiums because the laws aren’t tough enough on PIP fraud.

Call it help-yourself PIP fraud

Friday, August 16th, 2013

What’s a quick way to make an illegal buck from Personal Injury Protection (PIP) in South Florida? Be part of an auto accident.

An average of 211 accidents take place every day in Miami-Dade, Broward and Palm Beach counties, based on the latest figures from the Florida Highway Safety and Motor Vehicles department. That’s a lot of chances, about one every 7 minutes. A lot of those produce injuries – real and fake.

A woman took advantage of an accident to rack up $14,000 in illegitimate auto insurance claims, according to police reports. On Oct. 9, 2012, Rodrigue Baptiste of Boynton Beach and his son were in an accident near the intersection of West Gateway Boulevard and State Road 807 in Boynton Beach. A woman driving a Ford Explorer pulled out of a driveway and struck their Ford Focus.

A few minutes later – before the police arrived –another woman arrived in her truck and told the man that she wanted to be listed as a passenger in his Focus. He agreed, which was a mistake.

The next day, the woman went to Delray Chiropractic and Wellness Center, where she filled out insurance claims for injuries supposedly suffered in the accident. The clinic billed her insurance company for $14,000 in PIP and other benefits and the company paid about $7,500 of that.

And you wonder why your PIP premiums keep going up.

A week later, Baptiste filed a PIP claim with his insurer, Liberty Mutual Insurance. He said that she was in the car at the time.

The story fell apart when investigators interviewed him. Baptiste admitted to police that the woman was never in the car. The driver of the Ford Explorer had already reported that she saw only the father and son in the car when the accident occurred.

Pressed a little harder, Baptiste said that he “did not want to disrespect her in front of the police.” Why didn’t he tell the truth upfront? No one asked him, he answered. Baptiste was charged with insurance fraud and released on bail.

Who is preying on drivers? Looks like PIP fraudsters

Thursday, August 15th, 2013

The masterminds of Personal Injury Protection (PIP) fraud rarely put themselves in danger. They hire people to crash cars and file false police reports. Those average folk take big risks for a few bucks, while PIP fraud organizers collect the lion’s share of the money from insurance companies.

So, when we hear that auto insurance companies are taking advantage of consumers, we point to Faika Khader, who was short on cash and ideas how to get it. She told police that she needed $900 and signed on to a PIP fraud scheme to earn the money.

In August 2011, Khader crashed her Dodge minivan into a car at an intersection in Boynton Beach. She filed a PIP claim with Farmers Insurance at Apex Chiropractic & Rehab Center in West Palm Beach.

She later admitted to a Farmers Insurance investigator that a man she did not previously know gave her $900 to buy an auto insurance policy. On the night of the crash, he gave her instructions on what to do after the accident, and urged her to add passengers to her van. In return, he promised her several thousand dollars.

When the Florida Department of Financial Service’s Fraud Division became involved, Khader slightly changed her story, but the essentials were the same: Cause a crash, file a PIP claim, go to the clinic, and receive $2,000.

Khader was arrested, but the two strangers who rode in her minivan were not found. She’s in the most trouble, while the scammers – including the mystery man who recruited her – have moved on. We expect that they will resurface: clinic operators that police shut down often re-open in other counties, sometimes hiding their true identities.

We might not sympathize with Khader, but we can understand why she committed the crime: She needed the money. The real victims are the driver of the car she hit and all of us, who pay higher auto insurance premiums because the laws aren’t tough enough on PIP fraud.

New PIP law clamps down on fraud by requiring truthful statements

Friday, July 12th, 2013

Hypothetical: A person who claims to be injured in an auto accident is asked to state under oath what happened. On some auto insurance policies, such sworn statements are required as a condition of approving Personal Injury Protection (PIP) claims.

Why? To fight PIP fraud, which is rampant in Florida. Auto insurers want to know that a claim is legitimate before writing a check.

Real world: The Florida Supreme Court says that insurance companies can no longer require people who made claims before Jan. 1 to sit for a legal examination. The court said that the requirement delays and denies benefits, contrary to the intent of an old PIP law to pay benefits as quickly as possible.

The likely result? Higher PIP premiums for a while. Stripped of that legal tool, auto insurers cannot scrutinize claims as closely. More PIP fraud means more insurance payouts, which means higher auto insurance rates.

Some Florida Supreme Court justices thought that legal examinations were reasonable. In a dissenting opinion issued June 27, Justice Charles Canady wrote: “The right to a ‘swift and virtually automatic’ recovery of benefits is a right properly enjoyed by those who in fact meet the legal requirements for the receipt of benefits and comply with the legal obligations of an insured. The EUO [examination under oath] provision of the policy is simply designed to ensure that the ‘swift and virtually automatic’ payment of benefits is made only to those who are entitled to those benefits under the law.”

The PIP reform law that took effect this year corrects the situation. It enables auto insurance companies to include examinations under oath in an insurance policy. Once the backlog of PIP claims clears – a process that could take years – a more balanced approach will be restored.

Attorneys say that lawsuits, pace of PIP reform rollout will impact auto insurance savings

Tuesday, May 7th, 2013

We’ve been cautioning that the savings from the Personal Injury Protection (PIP) reform law will take time. Court challenges and the way the rules roll out mean that noticeable changes will take longer than we and insured drivers will like.

Two prominent Florida attorneys agree. Aaron Finesilver and Michael Longo of the Miami-based law firm Lydecker Diaz wrote in a guest editorial in the Daily Business Review that “The new PIP bill is not the type of legislation capable of providing overnight change.”

The lawyers, who handle PIP and bodily injury claims, correctly note: “The reduction of premiums will likely depend on several factors, including the outcome of lawsuits challenging the statutory amendments, the effect the new provisions have on reducing fraudulent or excessive claims, and the time it takes to implement the statutory changes.”

Finesilver and Long note that acupuncturists, chiropractors and licensed massage therapists have challenged several PIP provisions as unconstitutional and won an injunction in state court. The attorneys warn that “if any of the provisions designed to reduce PIP expenses are invalidated, consumers cannot expect to benefit from those anticipated savings.”

The attorneys also remind us that changes in the new law, which began as House Bill 119, to reduce premiums don’t take effect on existing policies until they renew. Thus, a driver who re-ups with his or her insurer in December will see no benefit until 2014 at the earliest.

They close their opinion article with these sage words: “At present, it is simply too early to draw conclusions on the effectiveness of House Bill 119 in reducing PIP premiums and rate filings throughout the state.”

Last member of ‘Operation Whiplash’ ring convicted of PIP fraud

Monday, April 22nd, 2013

We reported that Stephen M. Lovell of Windmere was among those arrested on federal charges of Personal Injury Protection (PIP) fraud. Now, we can tell you that he was convicted.

Lovell was found guilty of conspiracy to commit health care fraud and could go to federal prison for up to 20 years. He is scheduled to be sentenced June 10.

Lovell, a chiropractor, had claimed that was president and sole officer of Xtreme Care Rehabilitation Center Inc. in Cape Coral. In fact, he was acting as a front for the real owners so that they could avoid government regulation as a health clinic.

The clinic was a sham in other ways. Lovell and the 11 others, all of whom have pleaded guilty, recruited people to stage auto accidents and filed fraudulent PIP claims on their behalf. Once paid by insurance companies, the conspirators laundered the proceeds through corporate bank accounts.

A number of agencies played important roles in uncovering the fraud in what they code-named “Operation Whiplash.” They were the Cape Coral police department, Secret Service, IRS criminal investigation, city of Miami police, Hialeah police department, Florida Dept. of Financial Services and National Insurance Crime Bureau.

Orlando clinic cheats PIP two ways with unlicensed medical treatments

Wednesday, March 13th, 2013

 

Here’s a clever way for chiropractic clinics to rip off patients and insurance companies out of Personal Injury Protection (PIP) money: Have a friend perform medical treatments.

Blessings Rehab Center in Orlando put Ibenick Paul on the payroll as a medical professional even though he didn’t have a license, police say. He treated patients from 2009 until he and others at the clinic were caught. During that time, Blessings Rehab illegally billed insurance companies more than $67,000 for PIP benefits.

Frederick Freeman, the clinic’s chiropractor, and office manager Diana Merice, who allegedly hired Paul, were arrested with Paul on charges of insurance fraud. It’s not clear what recourse the patients, who never received proper treatment, can do about the situation.

The scheme is done and, apparently, so is the clinic. When a WFTV news crew went to the clinic in late February, it found a vacant storefront.

 

‘Ambulance-chasing’ attorneys run from spotlight

Monday, March 4th, 2013

If you’re wondering why personal injury lawyers are often called ambulance chasers, an open-and-shut civil suit among seven South Florida law firms provides an answer. Four firms that often represent people injured in accidents such as car crashes sued three competing firms, claiming that they illegally solicited clients.

The lawsuit alleged that the three firms used non-employees, known in the legal trade as “runners,” to direct injured people to those law firms. You see, it’s illegal for attorneys to chase an ambulance up the street, down the hill and over to a hospital in order to sign the banged-up occupant as a client. It’s also against the law for attorneys to pay other people to knock on the doors of patients’ rooms and homes to do the same.

However, some law firms bend or break the solicitation rules. Almost every personal injury attorney knows of at least one firm that’s engaged in the practice. It’s a dirty, little not-that secret which the Florida Bar does little about.

When the situation gets out of control, the offended firms do what they know best: go to court. After all, top attorneys at firms like these regularly make $400 or more an hour suing insurance companies like ours for Personal Injury Protection (PIP) claims. One PIP case can produce upwards of $50,000 in fees, even if the client collects only a few bucks.

That makes runners a source of irritation to the firms that are losing out on the sprint to sign clients. Along with some language about how integrity and the reputation of lawyers are being damaged, the lawsuit says that people working indirectly for the defendants put injured people in touch with their lawyers. For example, an employee of Broward Health Medical Center arranged a meeting between an injured patient and an attorney, according to the lawsuit.

The defendants responded with threats and indignation.

“The true headline, if any, ought to be that these attorneys have abused the judicial process and are maliciously prosecuting false and unsustainable legal claims to serve their own personal and political interests,” one attorney told the Daily Business Review.

The news article may have also prompted the two sides to figure out that publicity helped no one. According to the Broward County Clerk of Court, the lawsuit is done. No details were available, but you can guess that if seven law firms shut down a case in less than two months, they have decided it is better to settle their differences in private.

We’re not going to publicize the names of the law firms here. They neither need nor deserve the attention. But if you want look them up, here’s the case number: CACE13-00031.