Arrests for August 2001
These arrests were made possible through the cooperation of the Frauds Bureau, law enforcement, the insurance industry and the public.
To report suspected incidents of insurance fraud, call 1-888-FRAUDNY
CAUGHT!
*********************************************
- SENTENCING IN TWO FRAUDS BUREAU
CASES
- A Lewiston, NY, resident was sentenced to eight weekends of forced labor, five years’ probation, 500 hours of community service and an undetermined amount of restitution following his conviction on 7/9/01 of insurance fraud in the 3rd degree and scheming to defraud in the 1st degree. He filed false or inflated claims for damage to his home from winter storms over a four-year period that stretched from January 1996 to November 1999. As a result, he fraudulently collected nearly $200,000 in homeowners insurance benefits. A joint 18-month investigation by the Frauds Bureau and the Niagara County District Attorney’s Office led to the arrest.
- The owners of an upstate auto-glass shop were sentenced in Saratoga County Court on 8/9/01 for defrauding 11 insurance companies and one individual by submitting fraudulent work orders to replace damaged vehicle windows. The husband was sentenced to five years’ probation and $6,492 in restitution. His wife was fined $750 for her part in the scam. The arrest of the couple was the result of an investigation by the Frauds Bureau and the Saratoga County District Attorney’s Office.
- ABANDONED CAR REPORTED STOLEN
Arrested on 8/30/01
Charged with insurance fraud in the 3rd degree and grand larceny in the 3rd degree
A Buffalo auto salesman reported his car stolen on 2/1/01 from his father’s driveway. He provided a detailed explanation of the circumstances related to the theft. However, a joint investigation by the Frauds Bureau, the State Police and the Buffalo Police Department revealed that he had abandoned his car weeks prior to the date of the reported theft and that the car had 100,000 more miles on it than he had stated. The investigation also produced other evidence that led to his arrest.
- IN POLICE CUSTODY
Arrested on 8/28/01
Charged with falsifying business records, grand larceny and offering a false written statement
The Frauds Bureau and the NYPD joined forces in an investigation that led to the arrest of this defendant on charges that he fraudulently reported to the NYPD and his insurer that his Mercedes-Benz had been stolen. However, he was unaware that his car had already been recovered and was in police custody before he made the fraudulent report.
- DATELINE
Arrested on 8/26/01
Charged with criminal possession of a forged instrument in the 2nd degree
The defendant in this case produced a fraudulent certificate of insurance in order to obtain work as a subcontractor. He was accused of changing the date on a certificate that was no longer valid. He was arrested by the Hamburg, NY, Police Department on a warrant obtained by the Frauds Bureau.
- NO COVERAGE
Arrested on 8/24/01
Charged with criminal possession of a forged instrument
A self-employed floor specialist was arrested on charges that on three occasions from 1997 to 2000 he submitted fraudulent certificates of workers’ compensation and general liability insurance when in fact no coverage existed. The Frauds Bureau and the Town of Brighton Police Department conducted the investigation.
- A COUPLE OF CHEATERS
Arrested on 8/23/01
Charged with various violations of the New York State Penal Law
- SHE – A Rochester woman was accused of supplying information to a friend so that he could present himself as her husband in order to have dental work performed under her insurance coverage. She was charged with insurance fraud in the 5th degree, conspiracy in the 5th degree and criminal facilitation in the 4th degree.
- HE – Acting as the husband who was covered under his wife’s policy, this defendant filed fraudulent claims for four dental visits and was reimbursed $411. When he questioned the dentist about the co-pay, the dentist became suspicious and reported the incident. The defendant was charged with forgery in the 2nd degree, criminal impersonation in the 2nd degree and insurance fraud in the 5th degree. The investigation was conducted by the Frauds Bureau and the Town of Greece Police Department.
- NO-FAULT FRAUD
Arrested on 8/17/01
Charged with medical fraud
An investigation by the Frauds Bureau and the FBI led to the arrest of a Brooklyn office manager charged with paying the victims of auto accidents to use the medical facility at which he worked for treatment under their no-fault coverage. He also allegedly arranged with an individual to stage accidents and have the occupants of the vehicles treated at his facility.
- ALTERED ACCIDENT REPORT
Arrested on 8/16/01
Charged with insurance fraud in the 5th degree, offering a false written statement and falsifying a police report
A Brooklyn man, along with others, allegedly altered a police accident report for the purpose of gaining monetary benefits through his no-fault insurance coverage. The Frauds Bureau and the NYPD conducted the investigation that led to his arrest.
- 67 INDICTED; 55 ARRESTED
Arrested on 8/15/01
Charged with insurance fraud, bribery and various other criminal activities
Charges were brought against 67 individuals involved in the largest no-fault fraud ring ever to operate in New York; 55 have been arrested thus far and the investigation is continuing. The ringleader, by his own admission, has been staging accidents for more than 20 years. Other participants indicted were two New York City police officers, the manager of a medical clinic, a police officer with the Health and Hospitals Corporation and an NYPD school safety officer. The fraud scheme worked in two ways. In the first scenario, two cars generally driven by knowing participants in the scheme deliberately collided. The drivers called the police who filed accident reports based on the false information provided to them. The indictment charged seven of these staged accidents; several others are under investigation. In one such accident, one of the indicted New York City police officers allowed his car to be used to deliberately collide with a second car, causing little damage. After inspecting the damage, the two drivers decided to collide again, causing further damage. Only then did they notify the police. In the second scenario, this same New York City police officer accepted bribes to fabricate accident reports. The indictment charged that seven accidents where the police officer filed an accident report, involving 37 people claiming to have been in the cars, were fabricated for the purpose of fraud. Another four accidents mentioned in the indictment are currently under investigation. Integral to the success of the scheme was the participation of the supposed occupants of the cars, 58 of whom were charged in the indictment. In all but one case, these occupants refused medical attention at the scene, but later claimed to have been injured in order to allow fraudulent billing to no-fault insurers. After the alleged accidents – whether staged or fabricated – the defendants went to one of several medical clinics, which paid the ringleader a cash fee per patient. The manager of one such clinic was charged with complicity. Many of the defendants were accused of seeking "treatment" – ranging from chiropractic to acupuncture to psychiatry – at that one clinic. The passenger-defendants would claim soft-tissue injury, which produces pain but no objective evidence. The clinics would prescribe additional forms of therapy including large amounts of durable medical equipment and would bill the insurance carriers for the services and equipment. The multiple visits allowed the clinics to bill as much as possible, typically between $5,000 and $25,000 per patient up to a maximum of $50,000 allowed under New York State no-fault insurance law. In addition, these multiple visits gave the defendants a better chance to obtain a fraudulent personal-injury settlement after they retained lawyers. Some were paid hundreds of dollars per accident, while others were promised the prospect of an insurance settlement at a later time for fraudulent pain and suffering. This major, multi-agency investigation was conducted by the Frauds Bureau, the U.S. Attorney’s Office, the FBI, the NYPD and the New York City Department of Investigations. Five search warrants were executed during the sweep.
- ABLE TO WORK
Arrested on 8/14/01
Charged with grand theft and scheme to defraud under Florida State statutes
An investigation by the Frauds Bureau and the Orange County Sheriff’s Office brought about the arrest of a New York State man now living in Florida. The man suffered a work-related injury in 1992 and in 1994 was determined to have a partial permanent disability. However, after moving to Florida he took a job at Disney World in 1998 and subsequently collected nearly $8,000 in disability benefits to which he was not entitled. The information uncovered during the investigation was forwarded to the Florida Department of Insurance, leading to his arrest under Florida State Statutes.
- INSURANCE FRAUD
Arrested on 8/14/01
Charged with insurance fraud in the 5th degree
Two Brooklyn residents, along with others, allegedly altered police accident reports for the purpose of gaining monetary benefits through their no-fault auto insurance coverage. The Frauds Bureau and the NYPD conducted the investigations.
- STUDENT CHARGED WITH FORGERY
Arrested on 8/2/01
Charged with forgery in the 2nd degree
The president of a student association was accused of changing the amount of a certified check from $5,000 to $50,000 and delivering the check to an insurer as payment of premiums past due on a student insurance policy. The arrest followed an investigation by the Frauds Bureau and the Irvington, NY, Police Department.
- "BROKER" WITH NO
LICENSE
Arrested on 8/2/01
Charged with forgery, criminal possession of forged instruments, scheme to defraud, falsifying business records, grand larceny, insurance fraud and violation of Workers’ Compensation Law Section 114-fraudulent practices
An unlicensed insurance broker was accused of selling bogus auto, general liability and workers’ compensation insurance totaling more than $50 million over a 15-month period. The case was initiated when the Insurance Department received complaints from individuals who had paid premiums to the broker, received what they believed to be legitimate insurance cards, then subsequently learned that no policy existed. The Workers’ Compensation Board, in routine checks, also came across companies that had been sold bogus policies. Both agencies immediately teamed up with the NYPD Auto Crime Division and the Queens District Attorney’s Office to investigate the complaints. The broker, whose licensed had been revoked in 1991, allegedly collected $250,000-$500,000 from small businesses and individuals, running a cash only business. A search warrant executed at the broker’s place of business turned up 28 boxes of records and files.
