Arrests for November 2002
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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- GUILTY
- Anthony Allen pled guilty on 11/6/02 in Monroe County Court to grand larceny in the 4th degree. Allen was arrested in May 2002 on charges that he filed a claim with State Farm Insurance Company for the theft of a one-carat diamond ring valued at $5,000. To support his claim, Allen submitted a receipt dated 6/3/99 for the purchase of the ring and was paid his policy limit of $2,500. An investigation by the Frauds Bureau and the New York State Police revealed that the jewelry store where he allegedly bought the ring had gone out of business in 1995.
- Clarence Kress Sr., of Hamlin, NY, pled guilty on 11/5/02 in Town of Brighton Court to insurance fraud in the 5th degree. He was sentenced to a one-year conditional discharge, 40 hours of community service and restitution of $1,127.52 to State Farm Insurance Company. Kress was arrested in April 2002 on charges that he filed a fraudulent claim with State Farm for damage to a custom-built computer system that resulted from a lightning strike at his home in April 2001. He submitted false documents to support the purchase, ownership and possession of the computer system and was subsequently paid $1,127.52 for his loss. Several months later, he submitted a second claim to State Farm for damage to another computer system that he said was the result of a second bolt of lightning striking his home. Kress maintained that while he was transporting the second computer system for an independent analysis of the damage as instructed by State Farm, the system was stolen from his car. He again submitted fraudulent documents of ownership. An investigation by the Frauds Bureau and State Farm’s Special Investigations Unit led to his arrest.
- SENTENCED
Lucinda Baines-Travett, a former employee at Blue Cross/Blue Shield of Central New York, was sentenced in Onondaga County Court to five years’ probation and ordered to pay full restitution of $193,652 to her former employer. In September 2002, Baines-Travett pled guilty to charges that between November 2000 and March 2002 she processed fraudulent claims for her own benefit. The Frauds Bureau and the Onondaga County DA’s Office conducted the investigation that led to her arrest. In explaining why no jail time was sought, the prosecutor noted that Baines-Travett had no prior criminal record, she pled guilty to a felony that will mean state prison if she commits a new crime, she lost her job and the company wanted restitution as a condition of probation.
- WORLD TRADE CENTER FRAUD
Since the tragic events of September 11, the Frauds Bureau has been fast-tracking World Trade Center claims to ensure that they receive prompt attention. The Bureau has tracked more than 50 suspected fraudulent September 11-related claims thus far and a number of arrests have been made. The Manhattan DA’s Office anticipates about 20 arrests in benefit fraud cases related to September 11. Among them are the following:
- On 11/13/02, a resident and business owner in lower Manhattan was arrested and charged with insurance fraud in the 2nd and 3rd degrees and grand larceny in the 2nd degree. After being displaced from her apartment by the World Trade Center disaster, this suspect rented space at the Helmsley Carlton which she said was necessary for her to continue to operate her business. She filed a claim with FEMA for reimbursement of one month’s hotel bills and received payment. However, an investigation by the Frauds Bureau, FEMA, the Manhattan DA’s Office and Chubb Insurance Company revealed that she had previously filed a claim with Chubb for living expenses and received payment of $58,000.
- On 11/13/02, a Manhattan man was arrested and charged with grand larceny in the 3rd degree and falsifying business records. He submitted a claim to Travelers Insurance Company for living expenses that he incurred as a result of being dislocated from his apartment in the vicinity of the World Trade Center and received $30,000. However, an investigation uncovered evidence that he also applied to and received payment from FEMA and Safe Horizons (a victims’ assistance group) for his living expenses. The combined efforts of the Frauds Bureau, FEMA, Safe Horizons, the Manhattan DA’s Office and Travelers brought about his arrest.
- BIG BUCKS
Arrested on 11/26/02
Charged with grand larceny in the 2nd degree
A Utica homemaker was accused of defrauding the workers’ compensation system of more than $130,000. According to the charges, the suspect continued to collect and cash workers’ compensation checks following the death of her mother, the intended beneficiary. During the period from 2/9/90 to 3/4/02, she forged her mother’s signature to 315 checks in the amount of $130,694. Her arrest was the result of an investigation conducted jointly by the Frauds Bureau, the State Insurance Fund and the Workers’ Compensation Board.
- MANAGING MONEY
Arrested on 11/26/02
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree and violations of the Workers’ Compensation Law
An investigation by the Frauds Bureau, the State Insurance Fund and the Workers’ Compensation Board led to the arrest of a retail store manager from Utica on charges that, following the death of her husband on 11/2/00, she forged his signature on 47 workers’ compensation benefits checks totaling more than $24,600.
- IT DOESN’T WORK
Arrested on 11/25/02
Charged with insurance fraud in the 3rd degree, falsifying business records in the 1st degree and falsely reporting an incident in the 3rd degree
The defendant in this case was charged with fraudulently reporting his 1990 Nisson stolen from his apartment parking lot and filing a claim for the theft with Nationwide Insurance Company. He maintained that the car was in good working condition prior to the theft and that he drove it regularly. However, an investigation by the Frauds Bureau and the Oneida County DA’s Office uncovered evidence that the car was inoperable because of a transmission problem, that it had been stored in a garage for 13 months prior to the alleged theft and that the defendant had it towed from the garage to the parking lot from which he later claimed it had been stolen. The Utica Police Department discovered the car heavily damaged several blocks away.
- NO SUPPORT
Arrested on 11/25/02
Charged with insurance fraud in the 3rd degree and attempted grand larceny in the 3rd degree
When this suspect was notified by the Rochester Fire Department that his van was found on fire on a Rochester street, he claimed that the van contained electronic equipment and had been stolen from his driveway. He subsequently filed a claim for the loss with State Farm Insurance Company, including allegedly fraudulent receipts in support of his claim totaling $13,020. A joint investigation by the Frauds Bureau and State Farm’s Special Investigations Unit led to his arrest. The Rochester Fire Department’s Fire Investigation Unit and the DMV’s Criminal Investigation Division also assisted in the investigation.
- OVERBILLING
Arrested on 11/22/02
Charged with grand larceny in the 3rd degree
An investigation by the Frauds Bureau led to the arrest of a Long Island chiropractor accused of billing several insurance companies for services not rendered. He allegedly used records of past and current patients and then billed their insurers for fictitious visits totaling $13,000.
- READY, WILLING AND ABLE
Arrested on 11/21/02
Charged with various crimes including grand larceny in the 3rd degree, insurance fraud in the 3rd degree, falsely reporting an incident in 3rd degree and conspiracy
The Frauds Bureau, the NYPD’s Auto Crime Division and the Queens DA’s Office collaborated on an investigation that resulted in charges being brought against 71 suspects and the recovery of 43 vehicles valued at more than $1 million. Among the 71 charged were 26 vehicle owners who allegedly falsely reported their cars stolen to obtain insurance settlements. This is the most recent in a series of undercover operations that are part of an investigation that began in July 2001 and is known as "Operation Ready, Willing and Able." Working undercover, NYPD detectives set up a phony towing and wrecking garage called Able Towing and put the word out that owners could get rid of their cars at the shop with "no questions asked." The illegal transactions were audio and video taped by the undercover investigators "working" at Able Towing.
- A FAMILY AFFAIR
Arrested on 11/21/02
Charged with insurance fraud in the 3rd degree and grand larceny in the 3rd degree
An investigation by the Frauds Bureau and the State Insurance Fund ended with the arrest of an upstate woman and her son. Following the 7/9/00 death of a man they both shared living quarters with, the son allegedly forged the man’s signature on workers’ compensation benefit checks and split the proceeds with his mother. From 7/20/00 through 8/2/01, they cashed checks totaling more than $4,400.
- UNDESERVED BENEFITS
Arrested on 11/21/02
Charged with violation of the Workers’ Compensation Law
The defendant in this case was accused of submitting a document in support of a workers’ compensation claim that contained false information. As a result, she collected nearly $5,200 in benefits to which she was not entitled. Her arrest followed an investigation by the Frauds Bureau and the State Insurance Fund.
- REVOKED BROKER
Arrested on 11/19/02
Charged with grand larceny in the 2nd and 3rd degrees and scheme to defraud in the 1st degree
Based on numerous complaints received by both agencies, the Frauds Bureau and the Nassau County DA’s Office joined forces in an investigation that brought about the arrest of a Long Island insurance broker whose license had been revoked on 10/11/01. He was charged with collecting more than $600,000 in premiums from clients and a premium finance company but failing to remit them to the appropriate insurers, i.e., Empire/Allcity, Royal, Allstate, Colonial, CGU and Gulf Insurance Companies. Most of his victims became aware of the fraud only when they received a cancellation notice.
- ON THE JOB
Arrested on 11/19/02
Charged with fraudulent practices under the Workers’ Compensation Law
A Binghamton man was arrested on charges that he collected workers' compensation benefits while he was employed. The Frauds Bureau conducted the investigation.
- TWOFER
Arrested on 11/14/02
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree, falsifying business records in the 1st degree and violation of the Workers’ Compensation Law
An investigation by the Frauds Bureau led to the arrest of a real estate broker for allegedly filing a fraudulent claim and supporting documents for disability benefits while she was in fact working. At the same time that she was collecting the disability benefits under false pretenses, she was involved in an auto accident. She allegedly filed a fraudulent no-fault claim for lost wages. She was paid $48,360 as a result of the two claims.
- A COSTLY DIVERSION
Arrested on 11/7/02
Charged with bank fraud and possession of a forged security
An insurance agent from Staten Island was charged with diverting more than $50,000 of premium money from a MetLife mutual fund account and setting up a checking account for his personal use. A joint investigation by the Frauds Bureau, the FBI and the U.S. Attorney’s Office also revealed that the agent transferred a $249,000 annuity from MetLife to Guardian Life without the knowledge or consent of the annuity owner.
- ARSON
Arrested on 11/7/02
Charged with falsifying business records in the 2nd degree, insurance fraud in the 3rd degree and grand larceny in the 3rd degree
A Warsaw, NY, man was arrested in a continuing investigation into the circumstances surrounding a June 2000 incendiary fire in Elba, NY, in which Victoria Walczak pled guilty on 10/18/02 to arson. This defendant was charged with falsifying business record in connection with that case. In addition, he was charged with insurance fraud and grand larceny in connection with an unrelated property claim he submitted to Travelers Insurance Company in 1998 involving the theft of electronic equipment. In that claim, he allegedly provided fraudulent supporting documents.
- STAGED ACCIDENTS
Arrested on 11/7/02
Charged with insurance fraud and falsifying business records
An investigation by the Frauds Bureau led to the arrest of two Yonkers, NY, residents for their alleged involvement in a staged accident. They subsequently submitted applications for medical treatment under the no-fault portion of their auto insurance for which Hartford Insurance Company and GEICO were billed more than $3,000.
- GIVE UP?
Arrested on 11/1/02
Charged with insurance fraud in the 3rd and 5th degrees, grand larceny in the 3rd degree and offering a false instrument for filing in the 2nd degree
In May 2001, the NYPD obtained this defendant’s 1995 Mercedes Benz in an undercover "give-up" operation. The car was vouchered and held for safekeeping by the NYPD. In June 2001, he fraudulently reported to the police that the car had been stolen and submitted a fraudulent insurance claim to GEICO Insurance Company. His arrest followed an investigation by the Frauds Bureau and the NYPD’s Auto Crime Division.
