Arrests for September 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
Michael Puzan of Warsaw, New York, was sentenced in Genesee County Court to a term of three-to-nine years in prison for arson. In addition, he was ordered to pay $33,158 in restitution to United Frontier and Country Way Insurance Companies. In an effort to cash in on a renters insurance policy, Puzan and his girlfriend, Victoria Walczak, set fire to a duplex home they shared while five occupants slept in the other half of the home. The five occupants escaped the house unharmed. Walczak is currently serving a two-to-six year prison term for her part in the scheme. The arrests of both Puzan and Walczak were the result of an investigation conducted jointly by the Frauds Bureau, the Genesee County DA’s Office and the Genesee County Sheriff’s Office.
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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.
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AUTO ARSON
Arrested on 9/30/03
Charged with arson in the 3rd degree, insurance fraud in the 3rd and 4th degrees and grand larceny in the 4th degree
A Lake George woman was accused of intentionally setting her car on fire and subsequently filing claims totaling more than $20,000 with Progressive and North Country Insurance Companies. Her arrest followed an investigation by the Frauds Bureau, the State Police and the Warren County DA’s Office.
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BUSTED!
Arrested on 9/30/03
Charged with criminal possession of a forged instrument in the 2nd degree, falsifying business records in the 1st degree, offering a false instrument for filing in the 1st degree and petit larceny
An investigation by the Frauds Bureau and the Workers’ Compensation Inspector General’s Office resulted in the arrest of a licensed insurance agent/broker on charges of collecting premiums for workers’ compensation coverage but failing to remit them to the insurer. During the investigation, the defendant provided investigators with documents that indicated he had submitted the application and the premiums to the insurer. However, evidence revealed that the insurer had stopped accepting new workers’ compensation business in New York State in June 2002. The defendant also allegedly provided a fraudulent certificate of workers’ compensation coverage in the name of a prospective policyholder who submitted it to the State Insurance Fund. In addition, he allegedly presented a forged workers’ compensation policy application to Frauds Bureau investigators. The investigation also uncovered an additional fraudulent workers’ compensation application that the defendant had submitted to Princeton Insurance Company. In an effort to reduce the premiums, the application listed the insureds’ business as wholesale building sales, rather than the far riskier grading and landscaping business they were actually engaged in.
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GOTCHA!
Arrested on 9/27-28/03
Charged with insurance fraud
In the first phase of an undercover investigation known as "Operation Gateway," 51 people, including one doctor, were arrested for their roles in a no-fault insurance fraud ring that defrauded insurers of tens of millions of dollars. The investigation began in August 2002 when the NYPD received a tip about a fraud ring operating in New York City. In November 2002, the NYPD requested the Frauds Bureau’s assistance in the investigation. In this scheme, runners were paid up to $2,500 for each person they recruited to pose as a victim of an auto accident. Most of those arrested were recruits, each of whom was paid several hundred dollars to claim they were injured in an accident. The "victims" were then steered to medical facilities that were part of the scheme where unscrupulous doctors billed insurance companies for unnecessary treatment and lawyers filed bogus lawsuits. In this case, NYPD detectives, posing as insurance company representatives, contacted the suspects and told them they had been awarded an insurance settlement. But they had to go to a location in Queens to pick up the check in person. When they arrived, they were arrested and charged with fraud. The investigation was conducted by the Frauds Bureau, the NYPD, and the Brooklyn DA’s Office. Also assisting in the investigation were Liberty Mutual Insurance Company, Kemper Insurance Company, MetLife Insurance Company, Allstate Insurance Company, Progressive Insurance Company, Clarendon Insurance Company, Continental Insurance Company, The Robert Plan, Eagle Insurance Company, GEICO Insurance Company, The Hartford Insurance Company, State Farm Insurance Company, Lancer Insurance Company, the Motor Vehicle Accident Indemnification Corporation, Nationwide Insurance Company, New York Central Mutual Fire Insurance Company, Statewide Insurance Company and Travelers Insurance Company. This is an ongoing investigation and more arrests are anticipated.
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BAR NONE
Arrested on 9/19/03
Charged with forgery in the 2nd and 3rd degrees and criminal possession of a forged instrument in the 2nd and 3rd degrees
In 2001, the Department of Motor Vehicles initiated the Insurance Information & Enforcement System (IIES), an insured-vehicle database to identify uninsured vehicles on the road. An important component of IIES is the cryptographic bar-coded insurance identification card. A joint investigation by the Frauds Bureau and the NYPD’s Auto Larceny Unit resulted in the arrest of a Queens man who allegedly sold fraudulent bar-coded ID cards to an undercover investigator on two separate occasions. While the cards could not be used to register a vehicle, they could be presented as "proof" of insurance if the driver was stopped by the police. If convicted, the suspect faces up to 14 years in prison.
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CAUGHT!
Arrested on 9/18/03
Charged with insurance fraud under U.S. Code Title 18
An investigation by the Frauds Bureau, the U.S. Postal Inspector’s Office and the FBI led to the arrest of a licensed insurance agent charged with diverting commercial insurance premiums to his personal use. Evidence revealed that between January 2000 and April 2002 he allegedly collected insurance premiums but failed to remit them to the appropriate insurance companies, instead using the money to make auto loan and credit card payments and to pay his property taxes.
- WHAT’S A TRUCK AMONG FRIENDS
Arrested on 9/10/03
Charged with insurance fraud in the 3rd degree
A laborer from the Capital District reported that his 1996 Ford pick-up was stolen in New York City. He subsequently filed a claim for the loss with Allstate Insurance Company using fraudulent supporting documents. An investigation by the Frauds Bureau and the Albany County Sheriff’s Office uncovered evidence that the defendant had stored the truck with friends. During the execution of a search warrant by the Sheriff’s Office in a separate investigation, the truck was recovered where the defendant had hidden it.
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NO FREE ALTERATIONS
Arrested on 9/3/03
Charged with insurance fraud and grand larceny
The suspect in this case was accused of altering a police accident report and submitting it to a medical facility for the purpose of collecting benefits under his no fault insurance coverage. His arrest was the result of the combined efforts of the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad.
PRIOR SUPPLEMENTS
August 2003
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PRESCRIPTION FOR FRAUD
Arrested on 8/20/03
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
A doctor from Effort, PA, was arrested for his part in the no-fault insurance fraud scheme that led to the arrest of 51 people on 9/27-28/03 in an undercover operation known as Operation Gateway.
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EXTENDED BENEFITS
Arrested on 8/7/03
Charged with insurance fraud in the 3rd degree and perjury in the 1st degree
A New York City woman was charged with presenting false testimony at a workers’ compensation hearing in order to extend her benefits. While working in a photography studio that she owned, she stated that she had no income other than her workers’ compensation benefits. Her arrest was brought about by the efforts of the Frauds Bureau and the Manhattan DA’s Office.
