Arrests for August 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 dentist from the Rochester area, Richard A. Levin, was sentenced on 8/25/03 to 15 months in prison followed by three years of supervised release for practicing without a license. Levin pled guilty to health care fraud in May 2002 for defrauding Blue Cross/Blue Shield of the Rochester Area (BCBSRA) by submitting fraudulent reimbursement claims over a three-year period. He was sentenced in January 2003 to five years’ probation, a $3,000 fine and restitution of $138,515 to Excellus Health Plan, Inc., BCBSRA’s parent organization. At the time, he was ordered to serve the first six months in home confinement, to perform 200 hours of community service and to place and pay for ads in two professional publications, recommended by the U.S. Attorney’s Office, that acknowledged his guilt and detailed the consequences of health care fraud. Levin also voluntarily surrendered his license to practice dentistry in any jurisdiction in which he was licensed at that time and his Drug Enforcement Administration controlled-substance registration for a period of not less than two years and was placed on federal probation. However, he continued to practice even after surrendering his license, in violation of his probation. The investigation was conducted jointly by the Frauds Bureau, the U.S. Attorney’s Office, the FBI and the New York State Health Department.
- Christopher Dean, a Buffalo laborer, was sentenced on 8/25/03 in Erie County Court to three years’ probation for attempted workers’ compensation fraud. In January 2001, he began collecting benefits from CNA Insurance Company following a job-related back injury. However, evidence revealed that in August 2001, while still collecting benefits, Dean filed a claim with Great American Insurance Company, again claiming a back injury. On numerous occasions thereafter he denied any history of workers’ compensation claims or previous back injuries. His arrest was the result of an investigation by the Frauds Bureau and the Buffalo Police Department.
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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 more than 75 suspected fraudulent September 11-related claims thus far and a number of arrests have been made, including the following:
A mother-daughter team from Milwaukee, WI, were arrested and charged with insurance fraud and attempted theft by fraud for submitting fraudulent claims to both Conseco Direct Life and Peoples Benefit Life Insurance Companies claiming the mother had died in the attack on the World Trade Center on September 11. The mother, arrested on 8/15, was the insured and the daughter, arrested on 8/18, was the beneficiary on the two policies. The benefits totaled $135,000. An investigation by the Frauds Bureau and the Manhattan DA’s Office revealed that the mother is still alive and, in fact, her fingerprints were on the claim filed with Conseco for the death benefits. In addition, the mother submitted an auto claim to a third insurer 12 days after her purported death. The matter was turned over to the Milwaukee County DA’s Office for prosecution because both defendants live in Milwaukee and filed the claims there. -
BUSTED!
Arrested on 8/29/03
Charged with grand larceny, criminal possession of stolen property and insurance fraud
The ringleader and four participants in a Queens-based fraud scheme were arrested for their involvement in the theft of luxury vehicles. Some vehicles were stolen off the street. Some were given up by their owners to collect the insurance settlements. Still others – in a scheme known as a "bust out" – were leased or financed on credit using the personal identification of persons who were leaving the country. Working undercover, members of the NYPD’s Auto Crime Division acted as buyers of the stolen vehicles and were instructed by the ringleader to ship the vehicles out of the country labeled as household goods or to change the vehicle identification numbers and return the vehicles to the street. Three members of the ring were charged with giving up their vehicles – a 1999 Mercedes Benz, a 2001 BMW and a 1998 Montero – and subsequently filing fraudulent insurance claims. Vehicles valued at $500,000 were recovered, including a 2003 Hummer and a 2003 Mercedes Benz, each valued at $100,000. The investigation began as a stolen auto case for the NYPD about 18 months ago and was conducted jointly with the Frauds Bureau. The U.S. Customs Service assisted in the investigation and the AG’s Office is prosecuting the case.
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NOT IN THE LESSON PLAN
Arrested on 8/23/03
Charged with insurance fraud, attempted grand larceny and arson
A student from Buffalo reported to Progressive Insurance Company that his car ran out of gas on the road and that he attempted to fill up the tank using gasoline he had stored in the car. However, he used a cigarette lighter to search for a pour spout under the seat and the car exploded into flames. The suspect was treated for burns at a local hospital and subsequently filed a claim for $12,798 in damages. An investigation by the Frauds Bureau, the Buffalo Fire Investigation Unit and Progressive revealed that gasoline had been poured both on the inside and the outside of the car.
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NO-FAULT FRAUD
Arrested on 8/20/03
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd and 4th degrees, falsifying business records and scheme to defraud
The arrest of this suspect was the result of a joint investigation by the Frauds Bureau and the AG’s Office and followed the receipt of several IFBs and information from other sources regarding a no-fault insurance scheme. Other arrests have been made and this investigation is ongoing.
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PERMANENT IS FOREVER
Arrested on 8/19/03
Charged with insurance fraud in the 3rd degree, falsifying business records in the 1st degree and violation of the Workers’ Compensation Law
Following an injury on the job, a Syracuse laborer was given a classification of Permanent Partial Disability on 3/14/90 and began to collect workers’ compensation benefits on the condition that he was unable to work in any capacity. However, he returned to full-time employment in 1998 and from then until the time of his arrest, he submitted documentation to the State Insurance Fund stating that he was not working. During the five-year period, he continued to collect benefits totaling $44,000 although he was employed. An investigation by the Frauds Bureau and the State Insurance Fund led to his arrest.
- ACTORS
Arrested on 8/14/02
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree and falsifying business records in the 1st degree
The defendant in this case, along with four others arrested on 7/31/03, was charged with staging an auto accident and submitting a fraudulent claim to the Robert Plan in an effort to collect no-fault insurance benefits.
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ALL IN THE FAMILY
Arrested on 8/13/03
Charged with insurance fraud in the 3rd and 4th degrees, grand larceny in the 3rd and 4th degrees, falsifying business records in the 1st degree and scheme to defraud in the 1st degree
The owner, manager and employees of a Queens auto body shop and garage were indicted on charges that they defrauded Progressive and Liberty Mutual Insurance Companies. An undercover sting operation conducted by the Frauds Bureau, the NYPD’s Auto Crime Division, the DA’s Economic Crimes Bureau and the two insurance companies’ SIUs shut down an elaborate racket in which false claims of auto damage led to settlements of thousands of dollars each. The ten-count indictment charged that the defendants devised a scheme in which procurers solicited owners to "give up" their autos which were then stripped of air bags, seats, stereos and other expensive parts. The owners were induced to falsely report to the police that their cars had been vandalized. The insurance settlements were shared among the defendants, procurers and vehicle owners and the original parts were reinstalled in the cars. The owner of the body shop is the widow of the previous owner who was tried, convicted and sentenced to 1 1/3 to 3 years in prison in 1992 for running an auto insurance fraud scam out of the same shop. These indictments are the result of the latest in a series of undercover investigations that began in 1991 targeting auto insurance fraud in Queens.
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BIG TIME NO-FAULT FRAUD
Announced on 8/12/03
Charged with insurance fraud, grand larceny and falsifying business records
An eight-month investigation led to the indictment of 85 physicians, psychologists, chiropractors, attorneys, medical clinic owners and others in the first stage of what may be the largest no-fault insurance fraud scheme ever prosecuted in New York State. As many as 500 additional indictments are still to be unsealed in this case. In the alleged scheme, owners and managers of medical clinics paid "runners," or recruiters, to arrange automobile accidents. The runners recruited drivers to cause the accidents and passengers to ride in the cars. Usually, multiple passengers were recruited in order to maximize the profit per accident. Then potentially vulnerable drivers were targeted for the caused accidents. The runners directed the "victims" of the accidents to clinics owned by the ringleaders for bogus medical treatment. No-fault insurance claims were subsequently submitted for unnecessary treatment or services never provided. Medical bills can go as high as $50,000 per passenger under New York law. In addition, these "victims" often filed fraudulent lawsuits against insurance companies alleging bodily injury. Based on evidence reviewed thus far, losses in this case are in the millions of dollars. The investigation was conducted by the Suffolk County DA’s Insurance Crime Unit which comprises detectives and prosecutors, the Frauds Bureau, the NICB, the AG’s Office, the Suffolk County Police Department and the State Police.
- WORKERS’ COMP FRAUD
Arrested on 8/8/03
Charged with offering a false instrument for filing
The defendant in this case was listed as the principal on several workers’ compensation policies with the State Insurance Fund which were cancelled with $260,929 in premiums owed. On another application for workers’ compensation coverage submitted in October 2002, he denied that he had ever been insured by the Fund. An investigation by the Frauds Bureau and the Suffolk County DA’s Office brought about his arrest.
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BACK ON THE JOB
Arrested on 8/7/03
Charged with insurance fraud in the 4th degree, grand larceny in the 4th degree and violation of the Workers’ Compensation Law
Following a back injury sustained on the job on July 2000, a Buffalo laborer filed for workers’ compensation benefits from Oriska Insurance Company. Between December 2001 and April 2002, he collected $1,400 in benefits. However, an investigation by the Frauds Bureau, the Workers’ Compensation Inspector General’s Office, the Erie County DA’s Office and the New York State Police revealed that he had in fact returned to work.
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FOILED IN FLORIDA
Arrested on 8/5/03
Charged with violation of the New York Workers’ Compensation Law and grand theft under the Florida statute
The defendant in this case moved to Florida while collecting workers’ compensation benefits in connection with two claims filed with the New York State Insurance Fund for injuries he sustained while working as a licensed practical nurse in Buffalo. While residing in Florida, he continued to submit documents attesting to his ongoing inability to return to gainful employment. However, a routine surveillance initiated by the State Insurance Fund prompted an investigation by the Frauds Bureau, the Fund, the Erie County DA’s Office and the Florida Insurance Frauds Bureau that uncovered evidence that the defendant was in fact working and had therefore collected $4,770 in benefits to which he was not entitled.
- FIRE BY APPOINTMENT
Arrested on 8/5/03
Charged with insurance fraud in the 3rd degree and attempted grand larceny in the 3rd degree
An investigation by the Frauds Bureau, the Cheektowaga Police Department and the Erie County DA’s Office resulted in the arrest of an upstate woman who allegedly reported to the Cheektowaga Police Department that her car had been stolen from her driveway. The car was recovered the following day in Buffalo totally destroyed by fire. Evidence uncovered during the investigation revealed that the suspect arranged to have the car burned in order to collect $3,000 in insurance money.
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FINANCIAL SHENANIGANS
Arrested on 8/4/03
Charged with grand larceny in the 2nd degree
The allegations in this case charge that the suspect, while acting in the capacity of a financial consultant, took $76,400 from a client with the understanding that it would be placed in an annuity with National Life Insurance Company of Vermont. However, an investigation by the Frauds Bureau and the City of Rome Police Department revealed that the defendant put the money to his personal use and presented the client with false documents pertaining to the account. He made restitution of the full amount plus interest once the investigation began.
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FALSE PRETENSE
Arrested on 8/4/03
Charged with insurance fraud in the 3rd degree and violations of the Workers’ Compensation Law
This suspect was charged with knowingly presenting to the State Insurance Fund written statements claiming he was not working when in fact he was. From October 1998 to July 2003, he collected more than $27,500 in benefits. His arrest was the result of an investigation by the Frauds Bureau, the State Insurance Fund and the Westchester County DA’s Office.
PRIOR SUPPLEMENTS
July 2003
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STAGED ACCIDENT
Arrested on 7/31/03
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree and falsifying business records in the 1st degree
Three Brooklyn residents were accused of staging an auto accident and filing fraudulent claims in order to collect no-fault benefits from the Robert Plan. The Frauds Bureau, the NYPD’s Fraudulent Accident Investigation Squad, the Attorney General’s Office and the New York City Department of Investigations pooled resources in this investigation.
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FRAUD RING UNDONE
Arrested 7/22/03
Charged with enterprise corruption, insurance fraud in the 1st and 2nd degrees, grand larceny in the 2nd, 3rd and 4th degrees, commercial bribing in the 1st degree and coercion in the 1st degree
An investigation by the Frauds Bureau, the Manhattan DA’s Office and the National Insurance Crime Bureau led to the arrest of 11 suspects for running an insurance fraud ring. They were accused of staging accidents, bribing hospital employees to disclose confidential patient information, referring patients to medical clinics to file fraudulent no-fault claims and making referrals to lawyers to bring phony lawsuits. A 12th suspect was also charged with reckless endangerment and insurance fraud in a separate indictment for his role in staging accidents.
