Arrests for July 2003
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 former insurance broker was sentenced on 7/28/03 to a year and a day in federal prison and restitution of $65,000 to Blue Cross/Blue Shield. Frank J. Vandenbush pled guilty in September 2002 to collecting health insurance premiums but failing to remit them to the insurer. The premiums were collected between 1997 and 1998 from ten businesses with a total of 123 employees. Although the fraud left many subscribers without health insurance, Blue Cross/Blue Shield honored coverage for those who could show they had paid premiums to Vandenbush. He was arrested on 7/29/98 following an investigation by the Frauds Bureau.
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GUILTY
- Robert Fonzi, a former New York State Department of Health narcotics investigator, pled guilty in Onondaga County Court to a misdemeanor count of insurance fraud in the 5th degree. Fonzi was arrested on 5/28/03 on charges that he submitted a fraudulent property claim to Madison Mutual Insurance Company. He claimed he had paid a contractor to repair windstorm damage to a property he owned in Syracuse. Madison Mutual issued an emergency payment of $3,601.64. However, an investigation by the Frauds Bureau, the Onondaga Sheriff’s Department and the Onondaga County DA’s Office revealed that all damage to the property existed prior to the storm. According to Onondaga County ADA Bridget Scholl, at sentencing Fonzi will be given a one-year conditional discharge and required to make restitution. In addition, he will be required to submit a letter of resignation from his job as a drug investigator.
- Dr. Marvin Galler of Williamsville, NY, was arrested on 7/11/03 and pled guilty as charged to one count of adulteration of a drug. Dr. Galler had been under investigation since 2002 by the Frauds Bureau and the Western New York Medical Task Force on suspicion of fraudulent billing practices. In November 2002, members of the Task Force received information from several of Dr. Galler’s employees that he was diluting flu vaccine being given to elderly patients. Vials of the vaccine were confiscated and tests confirmed the employees ’ allegations. Dr. Galler voluntarily surrendered his medical license. He faces up to three years in prison when he is sentenced on October 6, 2003.
- 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 Insurance Department has actively coordinated with other law enforcement agencies to make certain that a strong line of communication exists among all agencies involved in this issue. That link has proven to be invaluable because in some instances, there is a crossover between charity fraud and insurance fraud. The Bureau has tracked 75 suspected fraudulent September 11-related claims thus far and a number of arrests have been made, including the following:
A Brooklyn construction worker was charged with insurance fraud and grand larceny for allegedly filing a fraudulent claim with MetLife Home & Auto Insurance Company. The defendant reported that his leased 2001 Ford Explorer was destroyed in the collapse of the World Trade Center. However, an investigation by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad revealed that he had his car garaged in Brooklyn. He stopped paying parking fees in January 2002 and when the garage filed a lien in May 2003, the scheme was discovered. MetLife Home & Auto paid out $28,000 to the leasing company.
- NURSE NASTY
Arrested on 7/28/03
Charged with grand larceny in the 3 rd degree, offering a false instrument for filing in the 1st degree, insurance fraud in the 3rd degree, committing fraudulent practices and workers ’ compensation fraud
An investigation by the Frauds Bureau, the State Insurance Fund and the Colonie Police Department led to the arrest of a registered nurse for defrauding the State Fund. From October 2001 to July 2003, the defendant collected more than $28,800 in worker’s compensation benefits while working as a private duty nurse earning between $250 – $350 a week. During that time, she submitted statements to the State Fund that misrepresented the seriousness of her disability and her employment status.
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NO JOB, NO LOST WAGES
Arrested on 7/27/03
Charged with insurance fraud in the 3 rd degree and grand larceny
The defendant in this case was injured in an auto accident on 7/19/01. He submitted a letter from an air conditioning/heating company stating he was due to start a job with the company on 7/23/01. However, during an investigation by the Frauds Bureau and Progressive Insurance Company, the company owner admitted that he wrote the letter "as a favor to a friend," and that the defendant was not offered a job nor was he hired. As a result of the fraudulent document, the defendant collected $6,912 in lost-wage benefits to which he was not entitled.
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NO-FAULT
Arrested on 7/23/03
Charged with insurance fraud in the 3 rd degree, grand larceny in the 3rd degree and falsifying business records in the 1st degree
A Brooklyn man was charged with submitting a fraudulent police accident report to a medical facility for the purpose of receiving benefits from GEICO Insurance Company under his no-fault coverage. His arrest was the result of the combined efforts of the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad.
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TOO LATE
Arrested on 7/23/03
Charged with insurance fraud in the 4 th degree
On 4/11/03, this suspect secured liability coverage for her 2002 Buell motorcycle from Progressive Insurance Company. On 5/20/03, she was involved in an accident that caused more than $3,000 in damages to the motorcycle. Ten days later, she contacted the insurer and added comprehensive and collision coverage to the policy, after which she filed a claim for the damage, falsely stating the date of the accident. A joint investigation by the Frauds Bureau, the New York State Police and the Saratoga County DA’s Office led to her arrest.
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NO SECURITY
Arrested on 7/21/03
Charged with insurance fraud in the 4 th degree, grand larceny in the 4th degree and workers’ compensation fraud
Following a work-related injury in July 2002, the defendant in this case filed for workers’ compensation benefits from First Cardinal Corporation. Between July and September 2002, he collected more than $2,770 in lost wage benefits based on fraudulent documents he submitted stating he was not working, when in fact he was employed as a security guard. The Frauds Bureau, the New York State Police and the Workers’ Compensation Inspector General’s Office pooled resources in this investigation.
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INSTANT FAMILY
Arrested on 7/14/03
Charged with insurance fraud in the 3 rd degree and grand larceny in the 3rd degree
As a result of an on-the-job injury on September 9, 2002, a former customer service representative with Excellus Blue Cross Blue Shield of Rochester filed for disability benefits. In an effort to take advantage of the higher level of benefits in a family policy as opposed to an individual policy, she stated in her application that she had a spouse and one dependent child. However, an investigation by the Frauds Bureau, the Rochester Police Department and the insurer uncovered evidence that not only was she not married, but she was working full time. As a result, from September 2002 to January 2003, she collected nearly $4,300 to which she was not entitled.
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FALSE REPORT
Arrested on 7/9/03
Charged with insurance fraud in the 3 rd degree, grand larceny in the 4th degree, criminal possession of stolen property in the 4th degree, making a punishable false written statement and perjury and related offenses
An investigation conducted by the Frauds Bureau and the NYPD’s Auto Crime Division resulted in the arrest of a Staten Island woman accused of fraudulently reporting her car stolen in an effort to collect $18,000 from Progressive Insurance Company.
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FORGERY
Arrested on 7/9/03
Charged with insurance fraud, grand larceny in the 4th degree and forgery in the 3rd degree
The defendant in this case forged the signature of his deceased father on 34 disability checks totaling $9,100. His arrest was the result of an investigation by the Frauds Bureau and the Bronx DA’s Office.
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DRUG MONEY
Arrested on 7/2/03
Charged with insurance fraud in the 3 rd degree, grand larceny in the 3rd degree and falsifying business records in the 1st degree
An investigation by the Frauds Bureau based on a report of suspected fraud submitted by Progressive Insurance Company led to the arrest of a Middletown, NY, woman who was accused of filing duplicate claims for prescription drug reimbursement. She was insured through Progressive when she was involved in an auto accident. The insurer reimbursed her for the prescription drugs she was taking as a result of the injuries sustained in the accident. She subsequently switched coverage to State Farm, was involved in another accident, and was again taking prescription drugs. She submitted reimbursement claims to State Farm for the drugs prescribed as a result of the second accident. However, she also included receipts for the drugs for which she had already been reimbursed by Progressive in an effort to fraudulently maximize her reimbursement. Based on the duplicate receipts, State Farm paid her monies to which she was not entitled.
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HOME FIRES BURNING
Arrested on 7/2/03
Charged with insurance fraud in the 2 nd degree, arson in the 3rd degree and attempted grand larceny in the 2nd degree
This suspect’s home was destroyed by fire on July 28, 2002. He had been at his home with his two sons just prior to the fire. An investigation by the Frauds Bureau, the Orleans County Fire Investigation Team and the New York State Office of Fire Prevention and Control uncovered evidence that at least ten separate fires had been set inside the house. Before leaving the area, the suspect placed his children and their personal belongings into his car and re-entered the home to retrieve his cell phone. The investigation further revealed that his claim totaling $120,000 filed with United Frontier Mutual Insurance Company contained a list of property allegedly lost in the fire that included the children’s personal belongings. The claim was denied by the insurer.
- WORKERS’ COMP FRAUD
Arrested on 7/1/03
Charged with insurance fraud in the 3 rd degree and committing a fraudulent practice under the Workers’ Compensation Law
The Frauds Bureau, the New York State Police and the Schenectady County DA’s Office joined forces in an investigation that led to the arrest of an upstate man accused of fraudulently collecting nearly $5,300 in workers’ compensation benefits from ITT Hartford Insurance Company. Evidence showed that while he was collecting benefits from February 2001 through December 2001, he was working full time.
PRIOR SUPPLEMENTS
June 2003
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SENTENCED
Timothy Walters, a former New York State-licensed insurance agent for Combined Life Insurance Company, was sentenced on 6/2/03 to a conditional discharge, a $1,000 fine and 100 hours of community service resulting from his conviction in March 2003 of criminal possession of a forged instrument. Walters conspired with a Watkins Glen couple, Paul and Catherine Lodge, to backdate an application for a sickness income policy in order to cover a loss that occurred before the application was submitted. The Lodges have also pled guilty and were sentenced to pay a fine of $250 and a court surcharge of $65. An investigation by the Frauds Bureau and Combined Life’s Special Investigations Unit led to the three arrests.
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BAIL BOND FRAUD
Arrested on 6/19/03
Charged with offering a false instrument for filing in the 1st degree
A licensed bail bond agent was charged with knowingly submitting an application for bail that contained false information in order to secure the release of a defendant. His arrest was the result of an investigation by the Frauds Bureau, the Genesee County DA’s Office and the New York State Police.
May 2003
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THIS WAS NO ACCIDENT
Arrested on 5/13/03
Charged with grand larceny and insurance fraud in the 1st degree
Two suspects were arrested for allegedly cashing a reimbursement check issued by St. Paul Insurance Company in the amount of $5,176 for injuries allegedly sustained in an accident. However, an investigation by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad revealed that neither defendant was involved in the accident.
