Arrests for March 2005
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
Eric Kohler was one of 16 individuals arrested on 1/6/05 for their participation in a motorcycle theft and fencing ring and charged with enterprise corruption, burglary, grand larceny, criminal possession of stolen property, forgery of vehicle identification numbers and conspiracy. He was re-arrested on 3/10/05 on six additional charges in Queens and five felony warrants out of Vermont and sentenced to 1 ½ to 4 ½ years in jail. The investigation was conducted by the Frauds Bureau, the NYPD’s Auto Crime Division and the Queens DA’s Organized Crime and Rackets Bureau.
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CONVICTED
Igor Chanmin, a Brooklyn physician, was convicted on 3/17/05 on one count of conspiracy, four counts of reckless endangerment and four counts of insurance fraud. The jury found that the doctor helped recruit people to drive cars containing several passengers and to stage accidents on the Long Island Expressway and the Southern State Parkway. The accident "victims" then sought treatment at a medical clinic owned and operated by Dr. Chanmin where he and other doctors, chiropractors, acupuncturists and physical therapists associated with the clinic provided months of treatment for nonexistent injuries. The jury held Dr. Chanmin accountable for causing the staged accidents and for the fraudulent no-fault claims that he and the other medical professionals subsequently submitted to insurers.
- ON THE JOB
Arrested on 3/29/05
Charged with insurance fraud in the 5th degree and falsifying business records in the 1st degree
An Armonk, NY, woman was making deliveries for her employer, a local school district, when she encountered a disabled car. When she got out of her car to help, she was struck by a drunk driver. Although she was working at the time of the accident and her lost wages and medical bills were covered by the school district’s workers’ compensation coverage, she and her husband decided that, because he was drunk when he hit her, the driver’s insurance coverage should pay her bills. With a letter that they forged on school district letterhead stating that she was not on the job when the accident occurred, she filed for no-fault benefits rather than workers’ compensation benefits which was the appropriate coverage in this case. Their arrests were the result of an investigation by the Frauds Bureau.
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NO COVERAGE
Arrested on 3/28/05
Charged with falsifying business records and insurance fraud
An upstate tree surgeon was accused of presenting his employer with a fraudulent Certificate of Insurance stating he had adequate liability insurance coverage as required by New York Law. However, an investigation by the Frauds Bureau and the State Police revealed that no such coverage existed.
- FRAUDULENT BILLINGS
Arrested on 3/22/05
Charged with insurance fraud, grand larceny, scheme to defraud and attempted grand larceny
Fifteen suspects – including four doctors, a dentist, a psychologist and an acupuncturist – and six companies – including a medical billing firm, a psychologist’s office, an acupuncture clinic and three medical clinics – were indicted for participating in a no-fault insurance scam that fraudulently billed New York City Transit, which is self-insured, and a number of private insurance companies for medical services that were never rendered. An investigation conducted by the Frauds Bureau, the Manhattan and Brooklyn DAs’ Offices, the NYPD’s Fraudulent Accident Investigation Squad and its Transit Bureau, New York City Transit’s Special Investigations Unit, the National Insurance Crime Bureau, the New York State Department of Education’s Office of the Professions, Chase Manhattan Bank and the Special Investigations Units of both GEICO and St. Paul’s Travelers Insurance Companies led to the indictments. Investigators who worked undercover on this 18-month-long investigation discovered that the defendants submitted three types of fraudulent claims – billings for services that were not provided, billings that were upcoded in order to obtain a higher reimbursement rate and billings for services for dates on which the undercover investigators had not been seen or treated. More than 60 insurers were defrauded of millions of dollars in those fraudulent billings over a ten-year period and the Manhattan DA’s Office initiated a forfeiture action in which the court has frozen more than $3 million in assets.
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SHE CLEANED UP
Arrestedon 3/18/05
Charged with falsifying business records, offering a false instrument for filing, grand larceny, insurance fraud, petit larceny and violation of the Workers’ Compensation Law
A joint investigation by the Frauds Bureau and the State Police led to the arrest of an upstate woman charged with collecting workers’ compensation benefits while employed as a cleaner at three different locations.
- NAME ADDED
Arrested on 3/16/05
Charged with grand larceny and insurance fraud
The defendant in this case was accused of allowing her name to be placed on a fraudulent Police Accident Report in order to receive more than $5,000 in medical treatment under the no-fault portion of her auto insurance coverage. The Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad pooled resources in this investigation.
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NO HELP
Arrested on 3/15/05
Charged with insurance fraud in the 4th degree and falsifying business records in the 1st degree
A Highland, NY, woman submitted claims to Nationwide Mutual Insurance Company seeking reimbursement for a household helper who was allegedly caring for her husband while he recuperated from an accident. However, an investigation by the Frauds Bureau and the State Police uncovered evidence that the person whose name was listed as the helper on the claim provided no home care.
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WORKERS' COMP FRAUD
Arrested on 3/11/05
Charged with criminal possession of a forged instrument
The owner of a construction business submitted a Certificate of Insurance to the Town of Irondequoit’s Building Department as proof that he had the required general liability and workers’ compensation insurance coverage. However, during an investigation, it was discovered that no such coverage existed. The arrest was the result of the efforts of the Frauds Bureau and the Irondequoit Police Department.
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FORGED RECEIPTS
Arrested on 3/10/05
Charged with insurance fraud in the 5th degree and falsifying business records in the 2nd degree
An investigation by the Frauds Bureau and the Schodack Police Department resulted in the arrest of an upstate clerk. Following a burglary in her home, the defendant submitted receipts purportedly from a local electronics store for items she claimed had been stolen. However, the investigation revealed that the receipts were fraudulent.
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SEVEN FRAUDSTERS
Arrested on 3/10/05
Charged with grand larceny, insurance fraud, falsifying business records and offering a false instrument for filing
An investigation by the Frauds Bureau, the Brooklyn DA’s Office, the Workers’ Compensation Board, New York City Transit, the U.S. Department of Labor and the U.S. Postal Inspector’s Office led to the takedown of seven suspects who collected workers’ compensation benefits for work-related injuries while taking on jobs, or in one case, performing extensive physical activity on house repairs. Six defendants were arrested and an arrest warrant was issued for the seventh. Among those charged in this case were two New York City bus drivers and a detective assigned to New York City Transit.
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CO-PAYS ONLY
Arrested on 3/10/05
Charged with insurance fraud in the 5th degree and petit larceny in the 4th degree
This suspect was injured in an auto accident in September 2003 and filed for no-fault benefits. He altered receipts for prescription drugs to indicate that he had paid the retail price when in fact he had paid only the co-payments. As a result of his fraud, he received more than $750 in reimbursements to which he was not entitled. The Frauds Bureau and the State Police worked together in the investigation that led to his arrest.
- SECOND TIME AROUND
Arrested on 3/8/05
Charged with insurance fraud, attempted grand larceny and falsely reporting an incident
A retiree from Buffalo, NY, purchased an auto insurance policy on 1/28/05 to cover his 1991 Mercedes-Benz. On 2/5/05, he reported to the Town of Niagara Police Department that the car had been damaged and a factory-installed CD changer stolen from the trunk at a shopping-mall parking lot. He then filed a claim with Progressive Insurance Company for the loss. However, an investigation by the Frauds Bureau and Progressive’s SIU turned up evidence that the defendant had submitted a claim to Safeco Insurance Company in July 2003 for similar damage and theft of property.
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FLORIDA BY WAY OF BROOKLYN
Arrested on 3/7/05
Charged with violation of the Workers’ Compensation Law
On 3/2/92, a New York man was injured on the job and was classified by the Workers’ Compensation Board as partially permanently disabled. In the interim, he notified the Board that he had moved to Florida and continued to collect his benefits. However, surveillance by the Frauds Bureau showed him to be living in Brooklyn in an apartment building where he was the superintendent. Further evidence was found in his employment records which were obtained from the building’s management company through a subpoena.
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CONFESSION
Arrested on 3/5/05
Charged with insurance fraud, attempted grand larceny and perjury
On 5/17/04, the Rochester Fire Department responded to a fire in which a 1997 Buick Century Custom belonging to the defendant was destroyed. Awakened by the Rochester City Fire Investigators, the defendant said the car must have been stolen from her driveway while she slept. She submitted written statements to GEICO Insurance Company and provided sworn testimony under oath stating the car had been stolen. However, the Fire Investigators concluded that the fire was intentionally set. During the investigation conducted by the Frauds Bureau, the Rochester Police and Fire Departments and GEICO’s Special Investigations Unit, the defendant confessed that she deliberately set the fire and filed a fraudulent claim in an effort to collect the insurance settlement.
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BURNT COFFEE
Arrested on 3/4/05
Charged with arson in the 3rd degree, attempted arson in the 3rd degree and attempted grand larceny in the 2nd and 3rd degrees
The owner of a coffee shop in Buffalo, NY, was rescued by the Buffalo Fire Department from a fire that completely destroyed his business. An investigation by the City Fire Marshals revealed that gasoline was used to set a fire on the first floor of the restaurant and an additional fire was set in an employee’s car at the rear of the building. An expanded investigation by the Frauds Bureau and the Buffalo Police and Fire Departments revealed that the defendant had purchased three insurance policies within 30 days of the fire – a $15,000 policy on personal property with New York Central Mutual Insurance Company, a $25,000 policy with Selective Insurance on business property and a $250,000 policy with Michigan Millers for the business. The defendant was charged with arson in both fires. However, because he had not yet submitted claims to his insurance carriers, he was not charged with insurance fraud.
PRIOR SUPPLEMENTS
February 2005
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SENTENCED
An upstate business owner, Gary J. Palone, was sentenced on 2/8/05 to serve one month of weekends in the Ontario County jail and five years’ probation. He was also fined $7,500 and ordered to pay $19,511 in restitution to Allstate Insurance Company. Palone was arrested in July 2004 and pled guilty in October of that year to insurance fraud, falsely reporting an incident, polluting the waters of the State in contravention of Water Quality Standards and constructing/operating a solid waste facility without a valid permit. In September 2002, he reported that his Dodge Ram pick-up truck was stolen from a parking lot at the New York State Fair in Syracuse. He filed a claim with Allstate and subsequently received a settlement of $14,500. However, based on information received by the Frauds Bureau that he had actually buried the car somewhere on his property, the State Police were asked to conduct an aerial survey during which a large water-filled pit was discovered on the property. Further investigation revealed that the defendant’s truck had severe mechanical problems and that he had not buried it as was first suspected but had arranged with others to have the truck "stolen." In the meantime, the New York State Department of Environmental Conservation Police were called to inspect the pit on the ground and determined that the defendant was operating a construction and demolition landfill on his property without the permit required by the DEC. During questioning by the Frauds Bureau, the defendant confessed to filing the false claim and fraudulently collecting the insurance settlement. The defendant agreed to cooperate in the investigation and in the clean-up of his property.
- GARAGE SALE
Arrested on 2/18/05
Charged with insurance fraud and falsifying business records
An Oxford, NY, man reported to Sterling Insurance Company that a number of valuable items had been destroyed in a fire at his home on 12/15/04. However, an investigation conducted by the Frauds Bureau led to a search warrant being executed at his garage where many of the items purportedly destroyed were found.
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INTERNATIONAL EFFORT
Arrestedin 2/7/05
Charged with conspiracy, mail fraud, money laundering and making false statements
The defendant in this case was arrested in California following extradition from Canada to face charges that he participated in a fraud scheme that netted more than $20 million. He had been arrested outside Toronto, Canada, on 9/3/04 based on immigration charges and a U.S. arrest warrant. He allegedly sold insurance policies through two companies he operated, claiming that the policies were backed by legitimate, licensed insurers. Brokers, agents and clients were directed to send their premium checks to addresses in Phoenix, Arizona which were actually post office boxes. The checks were forwarded to St. Vincent and the Grenadines and from there were routed to a bank account controlled by the defendant in Washington State. At least eight states had issued cease and desist orders against the defendant and his two companies for selling insurance without a license. In addition, he conducted business under the name of a deceased person whose identity he had stolen. The international investigation was conducted by the Frauds Bureau, the Investigations Division of the California Department of Insurance, the FBI and the IRS.
