Arrests for September 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
- JOINT EFFORTS
Arrested on 9/30/04
Charged with perjury, falsifying business records in the 1st degree, insurance fraud in the 3rd degree and fraudulent practices under 114-1 of the Workers' Compensation Law
A construction-site inspector for the City of Syracuse was arrested on charges that, while he was collecting workers' compensation benefits, he was employed as a painter. In addition, in both written statements and testimony presented to the Workers' Compensation Board, he lied about his employment status. As a result, during the period from 10/4/02 to 4/9/03, he collected $5,320 in benefits to which he was not entitled. His arrest was the result of the joint efforts of the Frauds Bureau, the State Insurance Fund and the Workers' Compensation Board.
- MEDICAL MILLS SHUT DOWN
Arrested on 9/27/04
Charged with fraud, conspiracy and money-laundering
The Frauds Bureau, together with the Western New York Health Care Fraud Task Force and the FBI, executed search warrants at medical facilities in Rochester and Buffalo in connection with an investigation into suspected fraudulent activities related to no-fault. The owner of the two facilities in question was arrested on an indictment warrant from California charging him with "fraud against the government." This investigation is ongoing and more arrests are expected.
- OPERATION CRASH COURSE
Arrested on 9/21-22/04
Charged with enterprise corruption, insurance fraud, grand larceny, falsifying business records and conspiracy
A three-year undercover operation conducted by the Frauds Bureau, the Queens DA's Organized Crime and Rackets Bureau, the NYPD's Fraudulent Accident Investigation Squad, the State Police and the Department of Motor Vehicles resulted in the arrest of 67 individuals and corporations - including chiropractors, acupuncturists and physical and massage therapists, as well as two medical clinics and their employees - for their participation in a major no-fault fraud ring. Since the initial sweep, more than ten additional arrests have been made in this case and more are expected. According to the charges, the investigation uncovered evidence that the defendants engaged in various schemes to defraud more than $1 million from dozens of insurers between 9/01 and 1/04. The ring allegedly paid runners up to $3,000 for each person they recruited to pose as an injured accident victim. Shadow patients (individuals who signed in for numerous dates of treatment each time they visited the clinic) were paid up to $750 for unnecessary treatment or services never provided at all. Insurers were billed for these "services" and the clinics created fraudulent paperwork to hide the fraud, such as sign-in sheets, progress notes and therapy records. The insurance companies allegedly defrauded include State Farm, American Transit, Liberty Mutual, Allstate, Peerless, AUI, ELCO, GEICO, Travelers, Prudential, Empire Fire & Marine, AIG, General Assurance, New York Central Mutual Fire, National Union Fire, Great American, Clarendon, Kemper, USAA, Lumberman's, Hertz Claim Management, Utica Mutual, Hartford Financial, Farmers New Century, Eagle, Progressive, Newark, ACE USA, Integon, Nationwide and Transit Facilities Claims.
- FALSE REPORT
Arrested on 9/16/04
Charged with insurance fraud in the 3rd degree, attempted grand larceny in the 3rd degree and falsely reporting an incident in the 3rd degree
An investigation by the Frauds Bureau, the Niagara County Sheriff's Department, the Niagara County DA's Office and Merchants Insurance Company's SIU led to the arrest of a Lockport, NY, resident. The suspect reported his 1998 Mercury Grand Marquis, valued at $9,337, stolen from a local street on 4/24/04. In June 2004, he gave a statement to Merchants reiterating his initial report. However, he subsequently recanted his statement and admitted to the insurer that he reported the car stolen in an effort to cover an accident.
Arrested on 9/16/04
Charged with insurance fraud in the 3rd degree and attempted grand larceny in the 3rd degree
The defendant in this case submitted $17,000 in allegedly fraudulent claims to New York Central Mutual Fire Insurance Company for property taken during a burglary he stated had occurred at his home on 5/22/04. An investigation by the Frauds Bureau, the Cheektowaga Police Department and New York Central's SIU revealed that at the time of the purported burglary, the defendant was incarcerated in the Erie County Holding Center on unrelated charges.
- STING RECOVERS "STOLEN" CAR
Arrested on 9/14/04
Charged with insurance fraud, grand larceny, falsifying business records, offering a false instrument for filing and false written statement
On September 3, 2004, a Long Island man reported to the Nassau County Police Department that his 2000 Jeep Cherokee had been stolen. He filed a claim with GEICO Insurance Company and received $12,700 in settlement of the loss. However, his Jeep had been recovered in a sting operation conducted on August 30, 2004 by the Frauds Bureau and the NYPD's Auto Crime Division.
- AGENT FRAUD
Arrested on 9/13/04
Charged with forgery in the 2nd degree
A joint investigation conducted by the Insurance Department's Frauds and Consumer Services Bureaus, the State Police and the Department of Motor Vehicles led to the arrest of a licensed insurance agent accused of issuing fraudulent auto identification cards. The agent failed to forward the premiums to any insurance companies and subsequently his clients discovered, sometimes after being involved in an accident, that the ID cards did not represent valid insurance coverage. On 9/13, investigators executed a search warrant at the suspect's place of business and removed customer files, computers and other documents related to this ongoing investigation.
- MAJOR: WORKERS' COMP FRAUD
Arrested on 9/13/04
Charged with perjury and committing a fraudulent practice under 114-1(i) of the Workers' Compensation Law
A 23-year-old college student was accused of violation of the Workers Compensation Law. Following a report of suspected fraud by the State Insurance Fund, the Frauds Bureau launched an investigation that revealed that the student, who was classified temporarily totally disabled by the Workers Compensation Board, presented sworn testimony at his Board hearing containing information he knew to be materially false. The investigation also found that this suspect was in fact able to perform all activities required for daily living. As a result of his actions, he collected benefits to which he was not entitled.
- DOUBLE DIPPING
Arrested on 9/7/04
Charged with grand larceny in the 4th degree
The defendant in this case contacted Zurich Insurance Company in June 2004 stating that he had not received his $1,600 workers' compensation benefit check. Zurich put a stop payment on the initial check and issued a second one. However, an investigation by the Frauds Bureau and the City of Syracuse Police Department uncovered evidence that the defendant cashed the second check and used the initial check as payment to a local auto repair shop for replacement of the engine in his car.
Following a guilty plea, Mark I. Hodge of Queens, NY, was sentenced on 8/4/04 to community service for submitting $10,000 in fraudulent hotel receipts to CNA Insurance Company in support of a homeowners insurance claim. He was arrested on 6/19/03 following an investigation by the Frauds Bureau and the Suffolk County DA's Office.
In the course of a traffic stop by the NYPD on 5/14/02, Miguel Gonzalez was found to be in possession of narcotics, a gun, and a fraudulent insurance ID card. The defendant was charged with criminal possession of a controlled substance in the 3rd degree, criminal possession of a weapon in the 4th degree and criminal possession of a forged instrument. On 7/21/04, the defendant pled guilty and was sentenced to time served.