Arrests for December 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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PROFESSIONAL MISCONDUCT
A licensed clinical social worker, Madge Flynn, turned in her license in mid-December after being charged by the State Education Department with professional misconduct. The Education Department initiated the action following Flynn’s conviction on a 4th degree insurance fraud charge in September 2004. At the time, she was sentenced to three years of conditional discharge and 50 hours of community service. During 2000 and 2001, Flynn billed Excellus Blue Cross/Blue Shield for $44,000 for patient visits that never took place. She made restitution to Excellus prior to her sentencing. The Frauds Bureau, the Oneida County DA’s Office and Excellus pooled resources in this investigation.
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SENTENCED
On 12/15/05, Mark Caldwell was sentenced to 5-to-15 years in state custody after pleading to four felony counts of arson in the 3rd degree. He was also ordered to pay $15,000 each for nine arson fires he was charged with setting. Caldwell was described as a serial arsonist who made a career of torching buildings. While no one was injured in any of the fires, the lives of the firefighters who fought the blazes were jeopardized. The case was initiated following a report of suspected fraud submitted by The Hartford Insurance Company. An investigation by the Frauds Bureau and the Town of Clay Police Department led to Caldwell’s arrest on 2/27/04.
- GUILTY
After a three-day trial, Yusuf Al Hassem, a retiree from Buffalo, was found guilty on 12/8/05 of insurance fraud, attempted grand larceny and falsely reporting an incident. Al Hassem 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, the Niagara County DA’s Office, the Town of Niagara Police Department and Progressive’s SIU turned up evidence that Al Hassem had submitted a claim to Safeco Insurance Company in July 2003 for similar damage and theft of property for which he was paid $4,210. The investigation also revealed that he is currently on parole on a robbery conviction. Based on his prior criminal record and the recent conviction, he faces up to 11 years in prison when he is sentenced.
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"STOLEN" JEWELRY
Arrested on 12/27/05
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
The defendant in this case reported to the Syracuse Police Department on 7/2/05 that nearly $4,700 worth of jewelry he owned was stolen from the home of his then girlfriend. He subsequently filed a claim with Travelers Insurance Company for the loss. However, an investigation by the Frauds Bureau and the Syracuse Police Department revealed that the claim was fraudulent. In fact, at the time of his arrest the "stolen" jewelry was found on his person.
- UNDERCOVER
Arrested on 12/27/05
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
The defendant in this case reported to the Syracuse Police Department on 7/2/05 that nearly $4,700 worth of jewelry he owned was stolen from the home of his then girlfriend. He subsequently filed a claim with Travelers Insurance Company for the loss. However, an investigation by the Frauds Bureau and the Syracuse Police Department revealed that the claim was fraudulent. In fact, at the time of his arrest the "stolen" jewelry was found on his person.
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UNDERCOVER
Arrested on 12/21/05
Charged with insurance fraud, grand larceny and falsifying business records
As a result of an undercover operation conducted by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad at a Long Island medical clinic, a doctor was arrested and accused of billing for services that he never provided.
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TRIP TO ATLANTA
Arrested on 12/20/05
Charged with insurance fraud in the 3rd degree and falsely reporting an incident in the 3rd degree
The Rochester Police Department received information on 11/23/05 from the Sheriff’s Department in Montgomery, Alabama, that a woman was at the Alabama Department of Motor Vehicles attempting to register a 1998 Lexus that had been reported stolen in Rochester on 4/3/05. The Sheriff’s Department took possession of the car which the woman said she had purchased from a car dealer in Alabama. A joint investigation by the Frauds Bureau, the Rochester PD, the Montgomery County Sheriff’s Department and GEICO Insurance Company’s SIU uncovered the following information. On 4/3/05, the defendant in this case reported to the Rochester PD and subsequently to GEICO that snow-covered roads had forced her to park and leave her car on a street in Rochester on 3/11/05. She stated that when she returned to retrieve the car 2 ½ weeks later, it was gone. During the course of the claim process, the defendant submitted a number of documents to GEICO in support of her claim. However, the investigation further revealed that sometime in March 2005, the defendant and another woman (not charged) drove the car to Atlanta, Georgia, and gave it to the defendant’s boyfriend. The boyfriend sold the car to a dealer who sold it to the woman attempting to register it in Alabama. Neither the seller nor the buyer was aware that the car had been reported stolen. The defendant eventually admitted to investigators that she had falsely reported the car stolen.
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CORRECTION OFFICER NABBED
Arrested on 12/15/05
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
An investigation by the Frauds Bureau and the Jefferson County Sheriff’s Department led to the arrest of an upstate correction officer accused of filing a fraudulent claim with Erie Insurance Company. On 9/24/04, this suspect reported to the Jefferson County Sheriff’s Department that a golf cart, a trailer and a Honda outboard motor with a total value of $5,100 were stolen from his property. When he contacted Erie to inform them of the theft, he was told that not all of the stolen items were covered by his insurance policy. Evidence uncovered during the investigation indicated that the suspect added to the claim items that were not stolen, submitted fraudulent supporting documents and inflated the claim to a total of $17,000. The fraud was discovered before Erie paid the claim.
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CAR FIRE
Arrested on 12/14/05
Charged with insurance fraud in the 3rd degree and attempted grand larceny in the 3rd degree
On 8/27/05, a clerk from Amherst, NY, reported to the Amherst Police Department that her 2003 Chevrolet Silverado was stolen from a street near her home. The car was discovered burned the same day in the nearby town of Arkwright. An investigation by the Frauds Bureau, the State Police, the Amherst Police Department and Progressive Insurance Company revealed that the defendant had been having financial difficulties and that she set the car fire in an effort to collect the insurance settlement. If Progressive had paid the fraudulent claim, it would have cost the insurer more than $24,000.
- SLIP AND FALL
Arrested on 12/12/05
Charged with insurance fraud in the 5th degree
While incarcerated in the Yates County Jail in Penn Yan, NY, an inmate fell down a flight of stairs, citing the poor condition of his prison-issue shoes as the cause. On 12/3/04, he filed a Notice of Claim with Selective Insurance Company and the County of Yates stating the circumstances of his fall and his subsequent injuries. However, an investigation by the Frauds Bureau revealed that this suspect told other inmates on 10/28/04 that he was going to arrange a slip-and-fall accident so he could sue the County of Yates. On 12/12/05, he was arrested and charged with insurance fraud.
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OPERATION BROWNSVILLE AUTO
Arrested on 12/8/05
Charged with insurance fraud, auto theft and sale of stolen auto parts
An investigation by the Frauds Bureau, the NYPD and the Brooklyn DA’s Office led to the arrest of 37 individuals, including one known Mafia associate, charged with auto theft, the sale of stolen auto parts and insurance fraud. The base of this operation was an NYPD-run salvage yard in Brooklyn called Brownsville Auto Salvage. The business was leased and operated by the NYPD for 18 months. Within that time, the yard took delivery of more than 100 cars that were either stolen or "given up." Cars were stolen from the five boroughs of New York City, as well as Nassau and Suffolk Counties, Connecticut and New Jersey. In the case of the "give-ups," car owners voluntarily gave their cars to middlemen who took the cars to a chop-shop. When the owners received word that their cars had been dismantled, they reported the theft to their insurers and collected the insurance payment. Car owners who gave up their cars include a U.S. Postal worker, an accountant, an architect, a Verizon employee, a Con Edison employee and individuals from the Departments of Sanitation, Education and Probation. Brownsville Auto Salvage was equipped with cameras and listening devices to document the illegal activity. This investigation is ongoing and more arrests are expected. In fact, an upstate chef was arrested on 12/9/05 as a direct result of Operation Brownsville Auto. This defendant reported to the Brighton Police Department on 6/4/05 that he parked his car and went for a walk. When he returned an hour later, the car was gone. He then filed a claim with GMAC Insurance Company for the loss and included various supporting documents. GMAC paid out more than $15,500 on the claim. In the meantime, however, the Brighton Police Department and the State Police in Rochester were informed by the New York City Detectives involved in the Brownsville Auto Salvage Operation that they had purchased the defendant’s car from a middleman on 5/9/05, more than two weeks before he reported it stolen. The Frauds Bureau and GMAC assisted the Brighton Police Department and the State Police in the investigation that led to his arrest.
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STAGED ACCIDENTS
Arrested on 12/5/05
Charged with enterprise corruption and falsifying business records
A doctor and two other medical professionals were among four defendants arrested following an investigation into staged accidents in Brooklyn. The Frauds Bureau and the NYPD’s Fraudulent Accident Investigation Squad combined efforts in this investigation.
- ALTERED PRESCRIPTION
Arrested on 12/2/05
Charged with criminal possession of a forged instrument in the 2nd degree
The defendant in this case was receiving pain medication for a work-related injury. While his orthopedist was on vacation, he called a doctor associated with the same medical group and asked for a prescription for his medicine. The doctor wrote the prescription on 4/19/05 for a three-day supply to tide him over and the defendant had it filled at a local pharmacy on the same day. However, during an investigation by the Frauds Bureau and the State Insurance Fund, it was discovered that the prescription the doctor wrote was for 15 tablets while the prescription the pharmacy filled was for 150 tablets. The large quantity of tablets raised a red flag at the pharmacy which informed the State Fund and the investigation that led to his arrest was initiated.
PRIOR SUPPLEMENT
January
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FRAUDULENT CLAIMS
Arrested on 1/19/05
Charged with medical fraud under Title 18 of the U.S. Code
A neurologist and three other suspects were arrested on charges of submitting fraudulent claims to various medical facilities. Information on these arrests was withheld until now pending the possible cooperation in this investigation by any of these defendants.
