Arrests for April 2004
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
Matthew Duncan of Johnson City, NY, was arrested for presenting Work Activity Reports to the State Insurance Fund that he knew contained materially false information in order to further his claim of being unable to work. He was, in fact, gainfully employed as an apartment-complex manager while collecting $4,000 to which he was not entitled. At the time of his arrest, he pled guilty and was given a one-year suspended sentence.
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GUILTY
- On the eve of a trial set to begin on 4/20/04, Frank J. Palermo pled guilty to insurance fraud in Monroe County Court. Palermo was arrested on 12/3/02 for submitting a fraudulent claim in the amount of $9,546 to Safeco Insurance Company. In May 2001, Palermo's garage was damaged in an accidental fire and the claim was for contents he said were damaged or destroyed by the fire. However, an investigation by the Frauds Bureau, the Monroe County DA's Office Fire Investigation Unit and Safeco's SIU revealed that Palermo deliberately inflated the claim in an attempt to defraud the insurer.
- On April 23, 2004, David and Suzanne Lanzatella pled guilty to insurance fraud in Monroe County Court. The Webster Police Department contacted the Frauds Bureau on 1/31/03 when they became suspicious of a burglary the couple reported having occurred at their home on 1/19/03 while they were out of town. They subsequently filed a $35,000 claim with Allstate Insurance Company for items they said were stolen. A joint investigation by the Frauds Bureau, the Webster Police Department and Allstate's SIU uncovered evidence that the receipts the Lanzatellas submitted in support of their claim were fraudulent. David Lanzatella is a licensed life insurance agent and financial planner. The couple was arrested on April 2, 2004 and they are scheduled to reappear on 6/22/04 for sentencing.
- WORKERS' COMP FRAUD
Arrested on 4/30/04
Charged with perjury in the 1st degree and workers' compensation fraud
The defendant in this case was accused of collecting workers' compensation benefits from 11/03 through 1/04 at the same time that he had returned to work. During that time, he also testified under oath that he was not working in any capacity. The Frauds Bureau conducted the investigation that brought about his arrest.
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LET'S GO TO THE VIDEO TAPE
Arrested on 4/28/04
Charged with violation of the Workers' Compensation Law
An investigation by the Frauds Bureau and Zurich Insurance Company led to the arrest of a Buffalo fitness service technician on charges that between July 2002 and January 2003 he collected workers' compensation benefits while fully employed as an independent contractor. During that time, he denied at several workers' compensation hearings that he was working. Payroll records and surveillance tapes were used as evidence in his arrest.
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OUT OF SIGHT
Arrested on 4/26/04
Charged with insurance fraud in the 3rd degree, attempted grand larceny in the 3rd degree and falsely reporting an incident in the 3rd degree
The defendant in this case reported his 1995 Mitsubishi stolen on 11/15/03 and he filed a claim totaling $5,500 with Progressive Insurance Company for the theft of the car, including stereo equipment and other items he claimed were in the car at the time. However, an investigation by the Frauds Bureau, the Niagara Falls Police Department and Progressive revealed that the defendant was renting a garage where he stored the car.
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STAGED ACCIDENT
Arrested on 4/22/04
Charged with insurance fraud
An investigation by the Frauds Bureau and the NYPD's Fraudulent Accident Investigation Squad led to the arrest of a Bronx man who was accused of staging an accident and receiving unnecessary medical treatment under the no-fault portion of his auto insurance.
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ATTORNEY AND 12 OTHERS
Arrested on 4/21/04
Charged with insurance fraud, grand larceny, falsifying business records, perjury, workers' compensation fraud, offering a false instrument for filing and criminal possession of a forged instrument
The Frauds Bureau and the Nassau County DA's Office arrested 13 individuals and one corporation in a fraud sweep conducted on April 21. Most of the defendants were charged with collecting benefits while they were working. Among the 13 was an attorney who collected $46,000 in benefits after he was injured in an auto accident. However, the investigation uncovered evidence that he continued to work out of his home.
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TWO NO-FAULT FRAUD RINGS
Arrested on 4/21/04
Charged with grand larceny, insurance fraud, falsifying business records and conspiracy
An investigation by the Frauds Bureau, the Attorney General's Office and the New York City Department of Investigations led to the indictment of 12 individuals charged with operating two separate auto insurance fraud rings in Brooklyn and Queens. They were accused of submitting more than $350,000 in fraudulent personal injury claims to insurance carriers. The charges against the two insurance fraud rings were contained in four separate indictments brought by a Brooklyn grand jury. The defendants were alleged to have engaged in schemes in which they staged accidents and received months of medical treatment for their supposed injuries. Defendants were paid for participating in the accidents and many received thousands of dollars in injury settlements paid out by insurers. Three indictments charged six defendants, including two New York City Correction Officers, of engaging in a fraud ring that staged accidents in 1999 and 2000. They allegedly submitted more than $214,000 in bills to various insurers, of which about $163,000 was paid. The fourth indictment charged the remaining six defendants for billing five insurers a total of $140,000 for unnecessary medical treatments. More than $42,000 of that total was paid out to medical providers during 1999 and 2000.
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LANDSCAPER CHEATS
Arrested on 4/21/04
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
Based on a report received from The Hartford Insurance Company, the Frauds Bureau conducted an investigation that led to the arrest of an upstate landscaper who was charged with fraudulently collecting over $32,000 in workers' compensation benefits while he was employed at his trade.
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FOUR CHEATERS
Arrested on 4/20/04
Charged with grand larceny, insurance fraud, falsifying business records and conspiracy
One of the defendants in this case, acting in concert with three others who were also arrested, was charged with engaging in a scheme to defraud Hertz Insurance Company of more than $3,000 by staging an auto accident and filing a fraudulent Police Accident Report and no-fault claims.
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UNDERCOVER INVESTIGATION
Arrested on 4/15/04
Charged with enterprise corruption, insurance fraud, forgery, falsifying business records, money laundering, commercial bribery and conspiracy
A 14-month undercover investigation by the Frauds Bureau, the NYPD, the Queens DA's Office and the New York State Taxation & Finance and Banking Departments led to the indictment of 43 individuals and corporations and the arrest of 28 for engaging in a widespread no-fault automobile insurance scheme. The group includes a reputed Bonanno crime family associate, five lawyers, three medical doctors, a dentist, other state-licensed medical professionals and clinic employees posing as medical professionals, that allegedly staged sham auto accidents, submitted false claims and medical reports and provided unnecessary treatment for feigned injuries. Three of the defendants charged with money laundering were also accused of concealing more than $1 million of the alleged ring's criminal proceeds by negotiating insurance company checks at a Manhattan check-cashing outlet.
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FORMER FIRE COMMISSIONER
Arrested on 4/15/04
Charged with committing a fraudulent practice under the Workers' Compensation Law
The Frauds Bureau, the Nassau County DA's Office, the Nassau County Police Department and the Workers' Compensation Board teamed up in an investigation that resulted in the arrest of a former commissioner of the Syosset Fire District for workers' compensation fraud. In 1995, the suspect was injured while attending a Volunteer Firefighters Convention at Disney World on behalf of the Syosset Fire District. His injuries necessitated surgery and because he was considered to be on-duty at the time, he filed a workers' compensation claim. However, he was captured on film in March and September 2003 loading furniture onto his pickup truck and at another time installing a window. He submitted two questionnaires to his insurer denying any work activity.
- NO COVERAGE
Arrested on 4/14/04
Charged with criminal possession of a forged instrument in the 2nd degree and committing a fraudulent practice under the Workers' Compensation Law
A Syracuse contractor agreed to replace a homeowner's roof. The contractor provided the homeowner with a fraudulent Certificate of Insurance falsely indicating that he had the proper insurance coverage for the job. An investigation by the Frauds Bureau, the Workers' Compensation Fraud Inspector General's Office and the Syracuse Police Department revealed that the defendant had forged the signature of a State Farm insurance agent and a fictitious policy number on the Certificate.
- CORRECTION OFFICER ARRESTED
Arrested on 4/12/04
Charged with insurance fraud in the 3rd degree and committing a fraudulent practice under the Workers' Compensation Law
The Frauds Bureau pooled resources with the New York State Correction Department to investigate charges that a Correction Officer was collecting workers' compensation benefits while working at his home-improvement business. Surveillance tapes and written statements from his customers obtained during the investigation were used to substantiate his work activity.
- NO-FAULT FRAUD
Arrested on 4/8/04
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
The suspect in this case signed a no-fault insurance application for an auto accident that did not occur. As a result, her insurance company was fraudulently billed for more than $3,000 in unnecessary medical treatments or treatments that were never provided.
- INTERNAL AUDIT NETS AUDITOR
Arrested on 4/7/04
Charged with grand larceny and falsifying business records
As a result of an internal audit, Public Service Mutual Insurance Company uncovered receipts for electrical engineering work performed in conjunction with several claims that would not generally require such work to be done. An investigation by the Frauds Bureau and the insurer revealed that $23,000 in receipts were allegedly submitted by an in-house adjuster of the insurer who had payments directed to the owner of the electrical engineering company. Further, the adjuster was charged with receiving a kick-back from the business owner.
- VICTIMS
Arrested on 4/3/04
Charged with grand larceny, criminal possession of stolen property and criminal impersonation
The defendant in this case was charged with collecting premiums from clients to secure auto insurance coverage. After securing the money, he contacted the insurer purporting to be the insured. He provided fictitious bank account information and the insurer, unaware, issued bona fide insurance identification cards. The victims also were unaware that they had no coverage until they were in an accident or were cancelled for nonpayment. The suspect was previously arrested for similar activities and was charged with petit larceny. About 12 victims are in the process of being contacted and interviewed. The investigation is ongoing.
- NO ACCIDENT
Arrested on 4/1/04
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
A Bronx woman filed a no-fault insurance application for an auto accident that did not occur. As a result, her insurer was billed for more than $3,000 for medical treatments that were either unnecessary or were never provided.
PRIOR SUPPLEMENTS
MARCH 2004
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SENTENCED
Peter McNally, a Staten Island man, was sentenced on 3/18/04 to six months probation for fraud associated with the September 11 attack on the World Trade Center. He applied for disaster relief through the Federal Emergency Management Agency alleging he had lost his job at HIP as a result of the attack. However, HIP records showed that he was terminated on 4/2/01 after he failed to appear for work. An investigation by the Frauds Bureau and FEMA led to his arrest as part of a sweep that netted a total of 15 people charged with stealing more than $52,000 from charities established to assist legitimate victims of the World Trade Center attack.
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SHAVE AND A HAIRCUT
Arrested on 3/24/04
Charged with grand larceny in the 3rd degree and offering a false instrument for filing
While out of work on Permanent Disability, this suspect continued to work as a barber while collecting $11,000 in benefits to which he was not entitled. He submitted statements that he could never work again but was observed working on three separate occasions.
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HIS BROTHER'S KEEPER?
Arrested on 3/22/04
Charged with criminal impersonation in the 1st degree and insurance fraud in the 2nd degree
The State Insurance Fund reported to the Frauds Bureau that an upstate man was using his brother's name to collect workers' compensation benefits. An investigation showed that while he was gainfully employed, he impersonated his brother in order to collect more than $67,000 in benefits to which he was not entitled.
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UNNECESSARY MEDICAL TREATMENT
Arrested on 3/10/4
Charged with insurance fraud in the 3rd degree
A Brooklyn resident submitted an application for no-fault benefits for an auto accident that did not occur. As a result, his insurer was billed for more than $3,000 for medical treatments that were either unnecessary or were not rendered.
FEBRUARY 2004
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SENTENCED
Kenneth A. Burns, an expired insurance agent from Staten Island, pled guilty to bank fraud on 7/30/03 and was sentenced on 2/25/04 to three years' probation and restitution of $50,295. Burns was charged with diverting 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 Burns transferred a $249,000 annuity from MetLife to Guardian Life without the knowledge or consent of the annuity owner.
- RACKING UP THE MILES
Arrested on 2/25/04
Charged with grand larceny in the 4th degree, petit larceny and unauthorized use of a motor vehicle in the 3rd degree
A body shop owner was charged with billing customers for auto repairs that were never done and using his customers cars for his own use, putting many additional miles on these vehicles. The New York State Police conducted the investigation that led to his arrest, with the assistance of the Frauds Bureau.
JANUARY 2004
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THE BROOKLYN FOUR
Arrested on 1/7/04
Charged with grand larceny, insurance fraud and conspiracy
The arrests of four Brooklyn residents, the latest in a major investigation of staged accidents and phony Police Accident Reports, were the result of an investigation by the Frauds Bureau, the Queens DA's Office and the NYPD's Auto Crime Division. More than 100 individuals have been arrested so far in this ongoing investigation.
NOVEMBER 2003
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FALSE PRETENSES
Arrested on 11/6/03
Charged with insurance fraud in the 3rd degree
This suspect filed an application for no-fault insurance benefits and received medical treatment for an accident that never occurred. As a result, his insurer was billed for more than $3,000.
