Posts Tagged ‘fraudulent PIP claim’

Suspicious accidents, PIP claims soar in Florida, National Insurance Crime Bureau says

Tuesday, June 29th, 2010

The number of suspicious auto accidents that were staged or deliberately caused by criminals in Florida has increased dramatically in the past year, according to the National Insurance Crime Bureau (NICB). The independent organization said on June 29, 2010, the number of questionable claims submitted to its insurance company members shows a 58 percent jump from 2008 to 2009.

This comes to no surprise to those of us at United Automobile Insurance Co. (UAIC) who fight insurance fraud every day. We see fake accidents and fake injuries all the time.

The report, shows the following trends in Florida:

  • Tampa had 487 questionable claims related to staged or caused accidents in 2009, a 290 percent increase over the previous year.
  • Miami had 258 questionable claims, an 11 percent increase year to year.
  • Orlando had 240 questionable claims, a 24 percent increase.

South Florida was the hotbed of staged crashes, according to the bureau. While the Miami and Hialeah areas continue to show increased activity, criminals have moved north and Tampa Bay is now the center of this crime trend.

The number of questionable claims for all insurance fraud increased 15 percent from 2008 to 2009 in Florida. But the 58 percent jump in the staged accident category shows that criminals are taking advantage of the state’s no-fault auto accident coverage, the bureau said. Florida had the highest rates of fraud in both bodily injury and personal injury protection among states with no-fault insurance.

We have been telling legislators, regulators and law enforcement officials for years that Florida is the epicenter of PIP fraud. Now we have the numbers to back that up.

To combat the problem, the bureau created a task force in South Florida in 2002. The success of the program pushed criminals to Tampa and Orlando areas. Staying in pursuit, the bureau will soon open another major medical fraud task force in Tampa.

The bureau has launched a public awareness campaign in the Tampa Bay area, using billboard and bus shelter ads, as well as radio spots to urge people who suspect a staged accident scheme to call 1-800-TEL-NICB or text their information to TIP411, keyword “fraud.”

We urge every driver in the Tampa Bay area and around the state to report fraud when you see it. You will be bringing criminals to justice and could see your insurance premiums drop if we all do enough to stamp out fake claims.

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Attorney tries to dodge fees when PIP lawsuit goes bad

Tuesday, June 29th, 2010

When it comes to money that plaintiffs or their attorneys have to pay out of their pockets, some lawsuits never come to an end. And that’s what happened with a claim that started seven years ago.

Plaintiff attorneys are paid as much as $500 an hour for filing paperwork at the courthouse and filling in forms, United Automobile Insurance Co. (UAIC) uncovered in its research of court records.

But when those attorneys lose, they want the other side to receive less than $100 an hour. How surprising.

UAIC fought a 2003 accident claim in Broward County, Florida. The claimant, who was not insured by UAIC, sought Personal Injury Protection (PIP) coverage relating to an alleged accident. UAIC denied payment of PIP benefits after discovering the claimant herself owned two vehicles for which insurance was required. That led to a lawsuit in Broward County Court.

During litigation, plaintiff attorney William C. Ruggiero argued that one of the vehicles the claimant owned had been stolen and the other was inoperable, and as such, United was responsible for PIP coverage. Ruggeiro, whose law offices are in Fort Lauderdale,  even filed an affidavit of the claimant’s daughter alleging the vehicle was inoperable.

UAIC discovered from the claimant herself that she did in fact own two vehicles, that neither had ever been stolen, and that both vehicles were in fine working condition. In fact, one of the vehicles was actively driven by her daughter, the person who signed the affidavit alleging the vehicle was inoperable.

After two long hearings on UAIC’s motion to dismiss the case, Broward County Court Judge Martin Dishowitz finally ruled in our favor.

UAIC then asked for payment of the attorney’s fees incurred while litigating the bogus claim. Ruggiero and his client once again made every argument possible to deny UAIC’s request. Judge Dishowitz ultimately dismissed the plaintiff’s arguments and granted entitlement to fees but challenged just how much UAIC’s defense attorney should be paid per hour.

A fee expert hired by Ruggeiro said that insurance defense attorneys usually get paid $85 to $150 per hour, with the average being $100 to $135 per hour.

UAIC argued that because its defense attorney had five years of experience defending PIP cases, the rate should be $250 to $350 per hour. Judge Dishowitz regularly awards plaintiff PIP attorneys with similar experience $250 to $350 per hour.

Judge Dishowitz made UAIC argue twice for why it should be paid and in the end only awarded $145 per hour. Was that a reasonable amount? It would be if the plaintiff attorneys were not asking for and being awarded $300 to $500 an hour. Somehow, those lawyers believe their time is more valuable than ours and the judges seem to believe that too. It is such a biased system.

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Staged accidents put Florida at top of scammer list

Friday, June 25th, 2010

It comes to no surprise to us that Florida leads the nation in phony accident claims. The National Insurance Crime Bureau says that these types of rip-offs increased 46 percent between 2007 and 2009.

Florida was the leader with 3,006 staged accidents over the two-year period. Tampa was the worst city for fraud, followed by Miami and Orlando.

The Miami CBS affiliate reports that the problem is huge in South Florida. The video report shows how unsuspecting drivers can become victims of fraud.

And the South Florida Sun-Sentinel quoted the NICB report as saying, “Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected.”

We have long been suspicious of these type of accidents, and of the claims filed by medical service providers. As we previously reported, people will recruit insured drivers to fake accidents so that bogus Personal Injury Protection (PIP) claims can be filed. In these cases, the people involved never suffer any injury and never see a doctor or receive medical treatment.

The rise in staged accidents means insurance premiums are also going up. Insurance companies like ours must pass along the costs to safe, honest drivers. Part of the solution is stronger law enforcement. This year, the Florida Department of Financial Services worked with NICB and local police to arrest 27 people who were charged in faking accidents and medical claims.

The other step that’s needed: legal reform. The Florida legislature must make it harder for drivers and medical clinics to set up phony schemes. And the state must eliminate the financial incentives for plaintiff attorneys to sue when claims are not paid. Right now, the clinics and attorneys have all to gain and little to lose when an insurance company challenges their claims. Until there are strong deterrents to fraud, Florida drivers will continue to pay for drivers, clinics and lawyers who cheat.

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Tampa arrests inside look at PIP fraud

Wednesday, April 28th, 2010

Thank you to the Hillsborough Sheriff’s department for telling the public what automobile insurers know: Staged accidents are a huge source of insurance fraud.

Undercover agents broke up a ring of at least 55 people on April 21, 2010, with arrests relating to staged accidents, insurance fraud and racketeering. Based on what we have heard about widespread fraud in the Tampa Bay area, more investigations and arrests are needed.

Personal Injury Protection (PIP) fraud is a huge problem, not just in Tampa Bay, but across the state. Drivers pay hundreds of dollars more in insurance premiums to cover medical claims that either overstated or outright fraudulent. State legislators need to take action to protect drivers, the courts and insurers from fraudulent PIP claims and baseless lawsuits. There should be funding for investigations that uncover phony medical clinics, recruiters for faked auto accidents, and the attorneys who file unfounded lawsuits on behalf of the clinics.

In announcing the arrests, the Sheriff’s office gave the media an inside look at how these rings operate, complete with a video of a staged accident.  Here is a summary from the Tampa Bay Tribune’s article:

“Deputies released the video, showing an SUV and a car pulling into a parking lot at night. The SUV parks; the car stops behind it. The driver gets out of the SUV and walks to the driver’s side of the car.

After a short conversation, the driver returns to the SUV. The car then positions itself and the SUV drives away. Three people get out of the car. The car parks and the driver turns off the headlights and gets out.

Almost immediately, the SUV drives toward the car at a high speed, and strikes it on the driver’s side. The SUV drives away and the four people get back in the car.”

The arrests follow another crackdown by federal, state and local authorities that involved a Tampa Bay treatment clinic. Our company and every other auto insurer in Florida can document that almost identical criminal activity takes place across the state. It’s time to stamp out PIP fraud with more arrests and fewer economic incentives to try to rip off Florida insurers.

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Latest PIP fraud crackdown leads to arrests in Tampa, Miami

Thursday, April 22nd, 2010

The Florida Division of Insurance Fraud is fighting rampant Personal Injury Protection (PIP) fraud in the state with investigations of diagnostic and treatment clinics. The latest effort resulted in eight arrests on April 20, 2010, of owners and workers at clinics in the Tampa Bay area and Miami.

PIP fraud continues to be a widespread problem in Florida. Reports say that many PIP insurance claims are padded and some are totally fraudulent. Those unjustified overcharges are a large reason that Florida drivers pay some of the highest auto insurance premiums in the country.

PIP-related lawsuits cost taxpayers and drivers money, as plaintiff attorneys file court claims seeking as little as $1.19 for their clients and tens of thousands of dollars for themselves in legal fees. Abuses of the court system have been reported in this blog.

As a public service, we are reprinting below the news release from the office of Florida Chief Financial Officer Alex Sink, who initiated the sweeps in January.

CFO Sink Announces Arrest of Eight PIP Scammers in Continued PIP Sweep Arrests

TALLAHASSEE — Florida CFO Alex Sink’s Division of Insurance Fraud (DIF) today joined the Hillsborough County Sheriff’s Office and the National Insurance Crime Bureau (NICB) to announce a staged vehicle accident Personal Injury Protection (PIP) sweep, including clinic owners and workers involved in PIP fraud scams around the state.

“Staged accidents put every Floridian at risk, both physically and financially,” said CFO Alex Sink. “I am taking aggressive action every day to get these scammers off our streets and behind bars where they belong.”

CFO Sink investigators arrested Miguel Costillo Rivero, 47, outside of his Tampa residence this morning after an investigation showed that Rivero was soliciting people to be part of staged accidents, offering money in return for participation. Superior Injury Care, Inc., a Tampa, clinic received false PIP claims that provided the clinic with reimbursement funds from insurance companies on services never rendered. Rivero is being charged with patient brokering and false fraudulent insurance claims, both third-degree felonies.

Superior Injury Care clinic therapist Courtney Braden and receptionist Blanca Luz Villalobos were also arrested in the Rivero case, charged with Patient Brokering and False/Fraudulent Insurance Claims, both 3rd degree felonies.

CFO Sink’s detectives were initially introduced to Miguel Castillo Rivero by David Vazquez Perez. Perez was interviewed in Pasco County with assistance by the Pasco County Sheriff’s office, regarding a staged accident. Perez admitted taking participants to Rivero’s house, where they received payments and reminders to return to the clinic once a week to fill out insurance paperwork. Perez has been booked into the Pasco County Jail. Perez was charged with one count of false/fraudulent insurance claim.

Tampa Pain Rehab, LLC Director Livan Diaz Acosta, 34, and therapist Jonathan Alfonso Rosero, 23, were also arrested this morning on the same PIP-related charges — patient brokering and false/fraudulent insurance claims which are both third-degree felonies. Acosta and Rosero have been booked into the Hillsborough County Jail.

CFO Sink’s investigators arrested Joel Bauta Lopez, 37, and Claudia Valdes Diaz, 21, owners of Ganesha Medical Center Corporation in Miami, yesterday [April 20] on charges of insurance fraud, grand theft and operating an unlicensed clinic while attempting to collect more than $40,000.00 in fraudulent insurance claims.

The charges stem from a previous arrest of both suspects in May 2009 for participating in a staged accident ring under a former business name, E&B Rehabilitation Center. After their first arrest, they posted bond and reopened a clinic under a new name, Ganesha Medical Center Corp., continuing to work without a business license.

Since Lopez and Diaz committed this new crime while out on bond for their 2009 arrest, they could be held without bond until their trial. Both suspects were booked into the Miami-Dade County Jail yesterday afternoon and each charged with one count of operating without a license, eight counts of Insurance Fraud and eight counts of Grand Theft.

These arrests are part of an ongoing PIP sweep by DIF that began earlier this year through partnership with the New Port Richey Police Department, Pasco County Sheriff’s Office, Hillsborough County Sheriff’s Office, Direct Insurance., Met Life Insurance and NICB. Further arrests are pending around the State.

For more information on PIP fraud in Florida, visit DIF’s website at http://www.myfloridacfo.com/fraud/.

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Florida’s CFO steps up fight against PIP fraud, staged accidents

Monday, March 22nd, 2010

Just how prevalent are phony car wrecks? Just ask Alex Sink, Florida’s CFO, who caught 19 suspects in Florida in just one week. Her Division of Insurance Fraud has found staged accidents in every corner of the state.

If Sink could conduct a sweep every week, she would probably have 1,000 suspects or more in custody. Staged accidents are just the first step in an illegal scheme that starts on the streets and ends in the courtroom. The people paid to fake car crashes are sent to health clinics that in turn send phony medical bills to car insurance companies for personal injury protection (PIP) benefits.

When insurance companies fight back against fraud, the health clinics and their attorneys go to court. The plaintiff lawyers charge as much as $500 an hour for filing paperwork in claims that can be for less than $2.

Since July 2009, state investigators have arrested 259 people for PIP fraud, culminating in 156 convictions, Sink says. Insurance fraud is a third degree felony, punishable by up to five years in prison.

According to Sink’s Division of Insurance Fraud, PIP fraud is the most reported type of fraud, accounting for 30 percent of all referrals received in fiscal year 2008-09. The division made over 830 insurance fraud-related arrests in the same fiscal year.

The division has seven fraud squads dedicated solely to investigating PIP fraud across the state. These squads are in the division’s central and South Florida regional offices where PIP fraud is most prevalent. Each squad works in cooperation with local law enforcement and consumer groups.

In the latest sweep, Sink’s squads nabbed suspects across the state:

  • Fort Myers (4 arrests)

  • Orlando (3)

  • Pensacola (1)

  • South Florida (8)

“Staged accidents put every Floridian at risk, both physically and financially,” Sink said in a press release. “I am taking aggressive action every day to get these scammers off our streets and behind bars where they belong.”

You can do your part to fight PIP fraud and protect law-abiding drivers, some of whom are victims in staged accidents. If you suspect insurance fraud, call CFO Sink’s Fraud Fighters Hotline at 800-378-0445 or visit www.MyFloridaCFO.com/fraud.

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Florida investigators find evidence of PIP fraud at health clinic

Monday, March 22nd, 2010

For an inside look as to how a health clinic can rip off car insurance companies and drivers, look to Orlando. There, detectives from the Florida Department of Financial Services conducted an undercover operation to expose a pattern of phony medical bills and patient recruitment.

The investigation uncovered the type of seamy operations that defraud insurance companies and boost drivers’ premiums. United Automobile Insurance Company (UAIC) commends the state investigators for their good work.

According to affidavits from state investigators who posed as accident victims, All Family Medical Center in Orlando, Florida, billed for medical treatments and evaluations never received. A person connected with the clinic paid for patient referrals and offered one detective money to stage an accident.

Florida’s Office of the Department of Insurance Regulation has stated that more than 80 percent of all automobile accident injury claims are in fact falsified or overstated in some way.

The problem of personal injury protection (PIP) fraud is becoming greater, says the Florida’s Division of Insurance Fraud. It reported last August that PIP fraud jumped 41 percent in the fiscal year that ended June 2009.

State investigators suspected All Family Medical Center was defrauding insurance companies when a patient told them in April 2009 that the clinic was dirty, equipment did not work and that her insurance company had been billed for treatment she never received.

In late May 2009, a detective from the department’s fraud division posed as a potential patient using a fictitious traffic accident report and a driver’s policy supplied by an insurance company that helped in the undercover operation. A clinic employee told the detective to sign blank medical and insurance forms before receiving any treatment. The same person told the detective to mark one form with a high pain-level indicator.

About two weeks later, the detective brought in another investigator who was also posing as an accident victim, according to an affidavit. That person was also told to sign blank forms.

And a few weeks after that, Jeff Toussaint, a person associated with the clinic, paid the first detective $500 for referring the second detective to the clinic, according to an affidavit. Toussaint told the first detective that she would receive more money if she brought in more patients.

During the summer of 2009, the clinic and its physician, Dr. Emmanuel Eloi, submitted insurance bills for treatment and evaluation on dates when neither undercover officer went to the clinic, according to an affidavit.

The investigation continued in September 2009, when the first detective brought in a third undercover detective who was also posing as a patient using fictitious documents, according to an affidavit. For that referral, Toussaint offered to pay the first detective $750 and said that the detective could give the newest patient $250 of that money.

A week later, Toussaint offered the first detective $400 to stage a false accident, according the affidavit. Toussaint also asked the detective to recruit three friends to create the phony wreck. The detective declined the offer.

Using the results of the undercover investigation, the fraud division of Florida’s Department of Financial Services sought warrants for Eloi and Toussaint.

Both men were charged with third-degree felonies on Jan. 28, 2010, according to Orange County court records. Eloi was accused of making a false and fraudulent insurance application. Toussaint was charged with two counts of making a false insurance claim and split-fee patient brokering.

UAIC wants to see justice done for insured drivers, and clinics that commit fraud put out of business.

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CEO Richard Parrillo, Sr., speaks out on PIP fraud in national magazine

Thursday, March 18th, 2010

The continuing exposes of personal injury protection (PIP) fraud by United Auto Courts Report are getting national attention. United Automobile Insurance Company (UAIC) CEO Richard Parrillo, Sr., was interviewed in March 2010 by Claims, a national magazine for the insurance industry.

UAIC’s efforts to fight PIP abuses by drivers, health clinics and attorneys geared up with the launch of this blog in December. Claims interviewed Parrillo about PIP fraud and what needs to be done to stop it. Here are excerpts from Parrillo’s interview. In it, he says:

  • PIP attorneys and clinics have been exploiting the system for as long as PIP has been in place.
  • In recent years, the [accident] runners have been replaced with more blatant solicitation efforts. Now, hotlines and advertisements such as 800-NEED HELP or 800-411-PAIN draw the accident victim in with promises of automatic payments of “$10,000 in benefits and lost wages.
  • Plaintiff PIP attorneys have told us directly that they share the fees with the [health] clinics.
  • The county courts reward plaintiffs’ attorneys for churning fees and performing unnecessary work to prosecute their cases. This phenomenon of inexplicable attorney-fee awards has fueled the fraud and abuse that permeates the PIP system.
  • PIP fraud and abuse is so widespread in Florida, it’s hard to say that the problem can ever be solved. … Of course, attorney-fee reform will have to occur for there ever to be hope of solving this problem.

For more of the interview, read the entire article on the Claims magazine Web site.

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Police investigation exposes staged car crashes

Tuesday, March 16th, 2010

Staged car crashes are big business. Just ask Josue Baez of Tampa. The 23-year-old told investigators he was paid $500 to pretend to be a crash victim and was promised $10,000 when a lawsuit went through.

His faked accident, which led to an arrest and guilty plea, was one of hundreds in Florida in 2009, say authorities trying to crack down on staged car wrecks.

The accidents have only one purpose: to rip off insurance companies. Crime rings see an easy way to make money through Personal Injury Protection (PIP) coverage.

About 30 percent of the roughly 12,000 complaints to Florida’s state insurance fraud division in 2009 were for PIP fraud, Alex Sink, the state’s chief financial officer, told the Tampa Tribune.

Here’s how the fraud works, according to investigators: A person offers cash to individuals to stage a car accident. The same person directs the individuals to a specific health clinic for diagnosis and treatment, even if there are no injuries.

The clinic files PIP insurance claims that can total more than $10,000 per person, the legal limit for PIP coverage. A clinic can make millions of dollars per year filing claims, Captain Steven Smith of the state Division of Insurance Fraud told the Tribune.

In some instances, the supposedly injured individuals sign over their legal claims to the clinic, which then sues the insurance company. Their attorneys earn as much as $500 an hour for filing legal paperwork on these fraudulent claims.

Drivers pay $200 to $300 per year in higher insurance premiums because of fraudulent claims, Amy Moore, a spokesperson for Allstate, told the Tampa Tribune.

UAIC is committed to getting PIP premiums under control. The company cannot do it alone and neither can law enforcement officers at state and local levels. Florida needs court reform and laws that remove the financial incentive for fraud. And those that abuse the legal system need to be punished.

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