Arrests for June 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
Charles D. Zonneville, a former licensed insurance agent, was sentenced in Ontario County Court on 6/21/05 to five years’ probation and restitution of $2,285. He was also required to stipulate to the revocation of his insurance licenses by the New York Insurance Department. Zonneville issued fraudulent auto insurance identification cards and failed to forward the premiums to any insurance companies. Subsequently, his clients discovered, sometimes after being involved in an accident, that the ID cards did not represent valid insurance coverage. On 9/13/04, investigators executed a search warrant at his place of business and removed customer files, computers and other documents that would be used as evidence in the case. A joint investigation by the Insurance Department’s Frauds and Consumer Services Bureaus, the State Police and the Department of Motor Vehicles led to his arrest.
Garifalia Christea, an attorney with more than 25 years’ experience in the insurance industry, was convicted of attempted falsification of business records and given a conditional discharge. She was arrested on 11/25/02 for defrauding two insurance companies of $133,571. At various times during a ten-year period that began in 1992, she collected long-term disability benefits while she was working; while she was also collecting short-term disability benefits; and she collected benefits from the two insurers simultaneously. Her arrest was the result of an investigation by the Frauds Bureau, the FBI and the U.S. Attorney’s Office.
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GUILTY
A former insurance agent and broker from Brockport, NY, Lon T. Horton, pled guilty on 6/24/05 to criminal possession of a forged instrument. Horton was arrested on 1/27/04 for issuing fraudulent certificates of workers’ compensation insurance to self-employed persons to be used as evidence of coverage for potential employers. As a result, businesses employing these individuals were improperly charged workers’ compensation rates based on fraudulent information contained in the certificates. In other cases, Horton collected workers’ compensation premiums from prospective insureds but never placed the coverage. An investigation by the Frauds Bureau, the State Insurance Fund, the Workers’ Compensation Fraud Inspector General’s Office and the Monroe County DA’s Office resulted in his arrest. Horton is scheduled to be sentenced on 8/12/05 to six months in jail, and ordered to pay restitution of $195,000 to 35 of his victims. In reaching the plea agreement, it was noted that Horton had no prior criminal record and has agreed to surrender $99,000 to the court at the time of his sentencing. That amounts to more than half of the total restitution. His license has been revoked by the New York Insurance Department.
David Lippa, a self-employed insurance/investment advisor, was arrested on 6/6/05 and pled guilty to two violations of Title 18 of the U.S. Code: money laundering and committing a securities violation. Based on a notice of suspected investment fraud received by the Frauds Bureau from New York State Senator James Seward (R-Milford), an investigation was initiated. Evidence revealed that Lippa defrauded about 10 or 12 investors of nearly $1 million. Investigators believe there may be other victims of the fraud who have not come forward. Lippa took sums in the amounts of $10,000, $20,000 and sometimes as much as $200,000. He allegedly produced a certificate for one share in LFG Financial Group, a company he owned, for each $10,000 and told his clients that the money would be invested. In order to maintain the confidence of the investors, he sent letters to "valued customers" telling them that the Group was expanding business and doing well. However, as the investigation would uncover, he spent the money for personal items, such as a house, cars and a houseboat, all of which have since been repossessed. Lippa faces a maximum sentence of 30 years in federal prison and a $750,000 fine. He will also be ordered to pay restitution.
- NO COVERAGE
Arrested on 6/29/05
Charged with criminal possession of a forged instrument in the 2nd degree
A self-employed landscaper was charged with supplying a customer with a fraudulent Certificate of Insurance as proof of liability insurance coverage. Based on the Certificate, the customer hired the suspect who subsequently damaged property and did not return to complete the job. An investigation by the Frauds Bureau revealed that the insurer named on the Certificate had not insured the suspect since 2001. In addition, another prior policy purchased from a second insurer had been cancelled in 2001 for nonpayment of premiums.
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14 SWEPT UP
Arrested on 6/28-29/05
Charged with various violations of the Workers’ Compensation Law
An investigation by the Frauds Bureau led to an arrest sweep in Queens that netted 14 individuals charged with various violations of the Workers’ Compensation Law. Sixteen other suspects are still being sought, including one who may be extradited from Texas if he does not return to New York and voluntarily surrender himself.
- ARSON
Arrested on 6/13/05
Charged with arson, grand larceny, insurance fraud, falsely reporting an incident, and false written statement
A Westchester County man reported to the Yonkers Police Department that he had parked his 2003 Ford Expedition in the parking lot of a shopping mall at 3:30 p.m. on 6/4/05. He further stated that when he returned at 5:10 p.m. he discovered that the car had been stolen. However, the New York City Fire Department had responded to a vehicle fire in the Bronx at 12:51 a.m. that same day. Due to the suspicious nature of the fire, the incident was referred to the Fire Marshal’s Office which, upon investigation, classified the fire as incendiary. The FDNY and the Frauds Bureau pooled resources in the investigation that led to the arrest.
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ALTERED REPORT
Arrested on 6/6/05
Charged with falsifying business records and insurance fraud
A Long Island woman altered a Police Accident Report to falsely state that a number of people were in her car at the time of an accident when in fact they were not. The report was used for those individuals to receive treatment at a medical facility for nonexistent injuries for which New York Central Mutual Insurance Company paid no-fault benefits. Her arrest was the result of an investigation by the Frauds Bureau and the Nassau County DA’s Office.
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ARSON 2
Arrested 6/6/05
Charged with arson in the 3rd degree, insurance fraud in the 3rd degree, grand larceny in the 4th degree and falsely reporting an incident in the 3rd degree
This suspect reported that his 1999 Saturn Station Wagon had been stolen some time between 10:00 a.m. and 4:30 p.m. on 4/27/05. However, many hours earlier, at 11:08 p.m. on 4/26/05, the New York City Fire Department responded to a vehicle fire in Brooklyn where fire officers determined that the car was a 1999 Saturn Station Wagon with the same license and registration numbers as the suspect’s vehicle. Fire Marshals discovered an ignitable liquid and a partially burned plastic gasoline container inside the vehicle and classified the fire as incendiary, leading to the arrest of the suspect. The investigation by the Frauds Bureau and the FDNY further disclosed that the suspect had filed an insurance claim and was paid $6,022 for the loss of his car.
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CRASH COURSE
Arrested on 6/6/05
Charged with insurance fraud and attempted grand larceny
During a meeting with a confidential informant in January 2005, the Frauds Bureau and the Niagara County DA’s Office learned that the owner of a used car parking lot, defendant #1 in this case, was planning to have someone cause an accident at his parking lot and intentionally damage a 1998 Chevrolet Lumina with a bad transmission. About a week after the meeting, investigators were notified by Erie Insurance Company’s Special Investigations Unit that a suspicious accident had occurred at the parking lot in question. An investigation by the Frauds Bureau and the Niagara County DA’s Office turned up evidence that at the request of the parking lot owner, a second defendant intentionally caused damages to the Lumina and also to a 1997 Plymouth Voyager. The damages were then enhanced and a repair estimate of $6,070 was submitted to Erie Insurance Company. The defendants planned to repair the two vehicles at a cost that was less than the amount of the repair estimate and pocket the difference.
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STAGED ACCIDENT
Arrested on 6/2/05
Charged with insurance fraud
The defendant in this case was accused of taking part in a staged accident in order to collect benefits under the no-fault portion of his auto insurance coverage. Six other suspects have previously been arrested in this ongoing investigation being conducted jointly by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad.
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AGENT FRAUD
Arrested on 6/1/05
Charged with grand larceny in the 2nd degree
An investigation by the Frauds Bureau, the State Police and the Herkimer County DA’s Office led to the arrest of a former independent life insurance agent who was charged with stealing $340,000 from an elderly woman over a period of more than two years from March 2001 through May 2003. The victim wrote personal checks payable to the suspect for what she believed was an annuity. However, rather than investing the money, the defendant put the cash to personal use. The investigation into the activities of other insurance agents suspected of targeting the elderly is continuing and more arrests are expected.
PRIOR SUPPLEMENTS
MAY 2005
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NO-FAULT FRAUD
Arrested on 5/31/05
Charged with insurance fraud and conspiracy
The defendant in this case filed a fraudulent Police Accident Report stating he was involved in an auto accident when in fact he was not. As a result of the information contained in the Report, he received more than $3,000 in no-fault benefits for nonexistent injuries. His arrest was the result of the joint efforts of the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad.
- $87,000 IN FRAUDULENT BILLING
Arrested on 5/31/05
Charged with insurance fraud
An investigation by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad resulted in the arrest of a Bronx man who, while acting in concert with others not apprehended as of this writing, allegedly staged an auto accident. As a result, $87,000 in bills was submitted to GEICO Insurance Company for unnecessary medical treatment.
- BROTHERLY LOVE
Arrested on 5/20/05
Charged with insurance fraud in the 3rd and 4th degrees, grand larceny in the 3rd and 4th degrees and scheme to defraud in the 1st degree
A Lockport, NY, resident reported to the Buffalo Police Department on 1/27/03 that his 2001 Ford Excursion had been stolen from the Buffalo General Hospital parking lot. He filed a claim with State Farm Insurance Company for the theft and a second claim with Northern County Insurance Company under his homeowners policy for items he said were in the car at the time of the theft. On 4/16/05, the Niagara County Sheriff’s Department was called to the residence of this suspect in response to a report of a domestic dispute. At the defendant’s home, his brother informed the investigators that the car the defendant had reported stolen in Buffalo in 2003 was actually parked at the side of the defendant’s garage. An investigation by the Frauds Bureau and the Niagara County Sheriff’s Department led to his arrest.
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IDENTITY THEFT
Arrested on 5/3/05
Charged with insurance fraud and conspiracy
The identification of a woman whose pocketbook was stolen in Manhattan was used to insure and register vehicles that were then used in staged accidents. A Bronx woman and eight others were arrested in this case which was investigated jointly by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad.
