Posts Tagged ‘IRS’

South Florida drivers should thank PIP prosecutor Ann Marie Villafana

Monday, February 24th, 2014

One of the biggest Personal Injury Protection (PIP) fraud rings is no more, thanks to the hard work of a person who does a great job without making headlines.

Ann Marie Villafana, assistant U.S. attorney for the Southern District of Florida, has been the lead prosecutor in Operation Sledgehammer, a multi-year effort to break up a criminal ring that staged auto accidents and then worked with others to collect fraudulent PIP claims.

Villafana has charged 101 suspects and obtained convictions that have resulted in 714 years in prison for the defendants and the repayment of more than $18 million. And she is not yet done going after the bad guys.

Her tireless effort has won her the Prosecutor of the Year award from the Coalition Against Insurance Fraud.

“Drivers in South Florida should be relieved. Breaking up a significant no-fault crash ring has made the roads of Palm Beach County safer. Villafana has stemmed a large-scale insurance theft that helped make no-fault premiums among the highest in America,” Dennis Jay, executive director of the Coalition, said in a statement.

Villafana received her award in a ceremony at the coalition’s annual member meeting in Washington. She collaborated with the FBI, IRS, Secret Service, Florida’s Division of Insurance Fraud and Palm Beach County state attorney’s office in building cases that led to 92 people being charged in federal and state court.

Villafana was a newcomer to fighting PIP fraud. She had to learn about no-fault and insurance fraud; she prepared so well that dozens of defendants plead guilty rather than go to trial.

They were part of a group that staged low-speed auto crashes in which no one was injured. Sometimes, the accident organizers made the damage look worse by striking cars with sledgehammers, which is the how the investigation got its name.

Accident participants filed false police reports and injury claims. Criminal organizers directed the individuals to medical providers that were part of the PIP fraud conspiracy. Chiropractors and other medical providers filed millions of dollars worth of PIP claims for treatments that were either not needed or not given. Attorneys who were part of the criminal ring sued auto insurers to ensure payment.

Feds put Florida chiropractor behind bars for staged-accident scheme

Wednesday, November 21st, 2012

The case was so strong it didn’t go to trial. Jennifer Adams of Boca Raton has pleaded guilty to a federal charge that she worked with others to rip off insurance companies through staged auto accidents. The chiropractor could go to jail for up to 20 years, pay a $250,000 fine and return $1.9 million stolen from the insurance companies.

Cases like hers are among the reasons why the Florida legislature pushed through Personal Injury Protection (PIP) reform in the 2012 session. Under a law that took effect in July, people injured in a car accident can receive the full $10,000 in PIP benefits if they to go to a doctor, but no more than $2,500 if they see a chiropractor or visit a non-medical care outlet.

Why? PIP fraud stems in part from medical clinics and chiropractors that predominantly treat auto accident-related injuries. The 39-year-old Adams is one example. Federal prosecutors say recruiters found people who would fake car collisions. The participants in both vehicles were coached on what to tell police when they arrived at the scene of the staged accident, and organizers would then file false injury claims with insurance companies.

The organizers sent the participants to two chiropractic clinics to which Adams loaned her license and she claimed she owned, prosecutors said. They were Ovy Rehabilitation Medical Center, Inc. in West Palm Beach and Chiropractic Office of South Florida in Palm Springs.

However, the organizers ran the clinics and filed falsified paperwork for PIP claims even though the participants were not injured and received little or no treatment. Prosecutors say Adams knew what was going on and collected a salary from the organizers; they kept most of the $1.9 million collected from 10 insurance companies.

The fraud was uncovered through the hard work of the FBI, IRS and Florida Department of Insurance Fraud. Prosecutors gave a special thanks to the National Insurance Crime Bureau for its assistance. The NICB is a nonprofit organization funded by insurance companies that works with law enforcement agencies to find and prosecute insurance criminals.

PIP fraudster sentenced to 8 years in prison, $4.4 million in restitution

Monday, June 4th, 2012

Congratulations to the investigators and prosecutors who put a major criminal behind bars for committing staged accidents and seeking to profit from false Personal Injury Protection (PIP) claims.

Oscar Luis Franco Padron was sentenced on May 29 in federal court in West Palm Beach on multiple charges including conspiracy to structure financial transactions for his role in a staged-accident fraud scheme. He was ordered to serve eight years in prison and pay $4.35 million in restitution. He was the latest and highest-ranking member of the scheme to be sentenced, the U.S. Attorney’s office said.

Padron managed chiropractic clinics and recruited patients to stage accidents. Other defendants have admitted in their guilty pleas that they would find people who had auto insurance from particular companies and recruit them to stage accidents.

“This massive ring orchestrated phony automobile accidents and made a living by defrauding insurance companies of millions of dollars,” U.S. Attorney Wifredo A. Ferrer said in a statement. “Auto insurance fraud is not a victimless crime. Not only were the insurance companies defrauded, but this scheme also hurt consumers as our insurance costs continue to soar because of fraud.”

The defendants “coached the participants on how to perform the staged accident, what to say to the police officer who responded to the scene, and how to claim that they have been injured,” according to the U.S. Attorney’s office.

After the staged accident, the drivers in both vehicles would file false injury reports with their insurance companies, claiming that they and their passengers, often family members, were injured.

The staged accident participants then supposedly went to chiropractic clinics for treatment. Instead, they completed claims for treatment partially or never received and were told what to say if an insurance investigator interviewed them about their injuries or treatment.

Three Palm Beach County clinics were involved in the PIP fraud scheme: Chiropractic Office of South Florida, Healthcare R Us, and New York Medical and Rehab Center.

The PIP fraud scheme was uncovered and arrests made through a joint effort of the IRS, FBI, Florida Department of Financial Services, and Florida Department of Insurance Fraud. The U.S. Attorney thanked the National Insurance Crime Bureau for its assistance.

“Fraudsters and criminal enterprises have learned how to game Florida’s auto insurance system and every honest Floridian with a car on the road ends up paying,” Florida CFO Jeff Atwater said in the statement.

“Through partnerships with law enforcement and state attorneys, we will go after these criminals, put them in handcuffs, and deliver them to justice,” he said.