Posts Tagged ‘Ontario’

PIP fraud knows no boundaries: Thieves prosper north of U.S. border

Tuesday, January 4th, 2011

Personal Injury Protection (PIP) thieves have taken their act to Canada. Using techniques developed in Florida to rip-off insurance companies, a ring of PIP fraudsters have staged accidents and bilked insurance companies in Canada for more than $10 million.

No matter the country, it shows that unscrupulous individuals are abusing no-fault auto insurance systems.

Here’s how one group of thieves stole $1.2 million from State Farm in Ontario: They staged accidents using older-model luxury cars that they bought from salvage shops and later claimed were in top condition. They then organized more than 40 fake accidents and sent the so-called injured to medical clinics that were in on the fraud. 

Taking advantage of Ontario’s no-fault system, the clinics submitted PIP-related bills that averaged more than $250,000 per accident.

Sound familiar, Florida?

In its lawsuit claiming PIP fraud, State Farm claimed Vishnukanthan Sabapathy of Scarborough, Ont., was the de facto owner or manager of three clinics that had presented false treatment plans, disability certificates and invoices to the insurer since 2008.

Why is it so easy to rip off Canadian insurance companies? According to a news report, a fraudster caught in New York told investigators that it was easy to set up X-ray facilities in Ontario and charge insurance companies $1,500 a scan. Lax business regulation of clinics make it easy for crooks to set up shop, according to the article.

For just $500, anyone can register with the province as a clinic operator and start billing insurance companies. The claims need billing information and the signature of a doctor or registered practitioner, but all of that can be forged.

Sound familiar, Florida?

Canada and Florida can solve the PIP problem by cracking down on the attorneys and clinics that make fraud so profitable. Tough investigators supported by even tougher laws can save drivers tens of millions of dollars. Once the profits from PIP fraud disappear, so will the thieves.