Arrests for December 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!
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SENTENCED!
A Buffalo resident pled guilty to insurance fraud in the 4th degree on 10/15/01 and on 12/13/01, she was sentenced to five years’ probation, 500 hours of community service and $14,470 in restitution to her insurer. The facts in the case are as follows: On 4/18/01, this woman purchased a 2000 Ford Van. She signed an agreement to put down $15,000 and finance the rest. She managed to talk her way into taking possession of the Van with a promise to send the $15,000 check "in a day or two." She obtained insurance coverage and on 5/2/01 reported the Van stolen. The insurer issued a check in the amount of $27,246 to the Ford dealership. She subsequently admitted that she had placed the Van in storage and falsely reported it stolen. In fact, she twice tried to trade it in while it was in storage. The Frauds Bureau conducted the investigation.
- A MAN, HIS WIFE, THEIR FRIEND
AND A FRAUD
Arrested on 12/27/01
Charged with workers’ compensation fraud, fraudulent practices and perjury
A Fort Plain, NY, resident, his wife and a friend were arrested and accused of defrauding the workers’ compensation insurance system. An investigation was conducted into a workers’ compensation claim filed by the first defendant in 1995. Over a period of time, he submitted statements to the State Insurance Fund indicating that he was not working. However, an investigation and surveillance conducted by the State Insurance Fund revealed that he was working at a farm and was also affiliated with Starlight Power Corporation, a company started by the defendant’s wife and the friend. The wife and the friend were accused of perjury relating to testimony they offered to the Workers’ Compensation Board to conceal the defendant’s affiliation with Starlight Power. They were also charged with a fraudulent practice relating to this testimony. The Frauds Bureau, the District Attorneys’ Offices of Montgomery and Schenectady Counties, the Fort Plain and Schenectady City Police Departments and the Montgomery County Sheriff’s Office also participated in the investigation.
- I DECLARE
Arrested on 12/20/01
Charged with criminal possession of a forged instrument
An investigation conducted by the Frauds Bureau and the Brighton Police Department led to the arrest of a self-employed painter accused of submitting a forged insurance policy declarations page to a contractor. The declarations page indicated that the defendant had workers’ compensation and general liability insurance when in fact no coverage existed. However, the coverage was necessary in order for the defendant to be paid for work he had performed.
- BARN FIRE
Arrested on 12/17/01
Charged with insurance fraud in the 3rd degree and attempted grand larceny in the 3rd degree
Following a fire that destroyed a cattle barn/storage building and its contents owned by the defendant in this case, he allegedly submitted an inflated insurance claim stating that certain property was destroyed in the fire. An investigation by the Frauds Bureau, the Cayuga County Sheriff’s Department and the insurer involved uncovered evidence indicating the property never existed.
- STOP AND CHOP I
Arrested on 12/17/01
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree, offering a false instrument for filing, false reporting of an incident and conspiracy in the 5th degree
A Brooklyn man reported to the NYPD and his insurer that his car was stolen. However, an investigation by the Frauds Bureau and the NYPD Auto Crime Division revealed that the car had been taken to a "chop shop" which had been the subject of a long-term investigation. A number of arrests have previously been made in connection with this chop shop.
- A MILLION HERE, A MILLION
THERE
Arrested 12/13/01
Charged with falsifying business records in the 1st degree and scheme to defraud in the 2nd degree
An investigation by the Frauds Bureau, the Westchester County District Attorney’s Office and the North Castle Police Department led to the arrest of an Armonk resident and a licensed insurance agent for their involvement in a life insurance scam. The Armonk man allegedly filed applications with numerous insurers seeking whole life and/or universal life insurance for a relative who was 70 years old at the time. In all but one of the applications, the defendant was named beneficiary of a total of $20 million in life insurance benefits on the life of his elderly relative. He presented false documentation in support of his claim of insurable interest and allegedly provided false net worth and income information about the relative. He received the assistance of the insurance agent in filing the fraudulent applications. The agent was also arrested and charged as an accomplice. The indictment also accused the defendant, working alone, of filing similarly false applications with similarly false supporting documents to insure the life of an acquaintance for $7 million.
- ALL WASHED UP
Arrested 12/12/01
Charged with grand larceny, insurance fraud, perjury, falsifying business records, offering a false instrument for filing and violation of Section 114 of the Workers’ Compensation Law
Nine persons and a laundry were charged with defrauding the State workers’ compensation system of nearly $250,000 over a nine-year period that extended from 1991 to 2000. The arrests came as a result of a nine-month investigation by the Frauds Bureau, the Queens District Attorney’s Office, the State Insurance Fund and the Workers’ Compensation Inspector General’s Office. Those arrested included both employers who allegedly defrauded the system and their own employees by under-reporting the number of persons they employed or by claiming that they had workers’ compensation insurance when in fact no coverage existed. The two owners of the now-defunct laundry allegedly claimed they had four employees when they actually employed at least 15. They were accused of stealing nearly $40,000. Three other defendants in this case were charged with collecting workers’ compensation benefits as a result of injuries sustained on the job, while at the same time they were employed elsewhere. They were accused of stealing more than $83,000.
- SELF-EMPLOYED IS STILL EMPLOYED
Arrested on 12/10/01
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree and fraudulent practices
While claiming to be unable to work as a result of an on-the-job injury sustained in 1989, a Waterloo, NY, resident was allegedly discovered in September 2000 to be self employed repairing farm machinery. As a result, he collected more than $8,100 to which he was not entitled. An investigation by the Frauds Bureau and the State Police led to his arrest.
- DOCTORS, LAWYERS, MEDICAL
CLINICS, ALL SWEPT UP
Arrested on 12/5/01
Charges include Enterprise Corruption under New York State’s Organized Crime Control Act, various counts of insurance fraud, larceny, conspiracy, and illegal client solicitation under New York State’s Judiciary Law
Superintendent Serio joined Queens District Attorney Richard A. Brown, New York City Police Commissioner Bernard Kerik and State Police Superintendent James McMahon on 12/5/01 to announce the conclusion of an investigation into the operation of a multi-million dollar automobile insurance fraud ring in the New York metropolitan area. The investigation led to charges against 112 individuals and four corporations for their involvement in the scheme. Seven individuals and one corporation were charged under the State’s Organized Crime Control Act with operating one of the largest no-fault fraud rings every uncovered in the State. Among those charged were three medical doctors, two medical clinics, two chiropractors, a physical therapist, an acupuncturist, two lawyers, and an NYPD Administrative Aide. The 14-month investigation, dubbed "Operation Whiplash," uncovered an organized network of individuals and corporations engaged in a systematic scheme to defraud insurers by filing false accident reports and fictitious claims of physical injury. In many instances, fraudulent accident reports, doctors’ records, prescriptions and affidavits were created as part of the scheme. The scheme involved staged accidents, bogus accident reports allegedly generated by the NYPD Administrative Aide, and the use of runners to steer "victims" to medical providers and facilities that were part of the scheme. Thus far, 92 persons have been arrested and the investigation is ongoing.
- STOP AND CHOP II
Arrested on 12/4/01
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree and conspiracy in the 5th degree
In separate cases, three defendants were arrested and charged with fraudulently reporting to the NYPD and their respective insurers that their cars were stolen when in fact they had taken the autos to a "chop shop." The chop shop has been the target of a long-term NYPD investigation in which the Frauds Bureau has been involved and numerous arrests have previously been made.
- EQUIPMENT UNREPAIRED
Arrested on 12/3/01
Charged with wire fraud
The defendant in this case was accused of submitting a fraudulent claim for $175,249 to his insurer alleging that a fire occurred at his place of business, damaging three compressors and an incinerator. He further stated that a repair company performed repairs to the equipment totaling $144,000. However an inspection requested by the insurer involved determined that no repairs had been made. The Frauds Bureau and the U.S. Postal Inspection Service conducted the investigation.
