Arrests for June 2007
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
An investigation by the Frauds Bureau and the State Police led to the arrest on 3/21/07 of Robert J. Loucks, accused of seven counts of criminal possession of a forged instrument. Investigators turned up evidence that on many occasions between May 2005 and March 2007, Loucks presented forged prescriptions at a number of pharmacies in Wayne and Monroe Counties. The prescriptions were written on a prescription pad stolen from a local medical facility. At the time of his arrest, he had one forged prescription for Oxycodone in his possession. However, over the course of the investigation, a total of 54 forged prescriptions were discovered. Subsequently, on 6/20/07 with an attorney present, Loucks admitted to all 54 forgeries. He is currently in Monroe County Jail without bail and will undergo substance abuse treatment as part of a plea agreement with the Wayne and Monroe County DAs’ Offices.
- GUILTY
Amanda Cox, a former deputy with the Sullivan County Sheriff’s Office, pleaded guilty on 6/7/07 to charges that she participated in an insurance fraud scheme. Cox admitted that she paid someone to crash her 1999 Jeep Cherokee because she could not keep up the payments. She submitted a claim for the loss in order to collect money from her insurer, State Farm Mutual Insurance Company. Before her sentencing in August, she will repay the insurer the $13,000 she collected on the claim. She was suspended from her job with the Sheriff’s Office when she was arrested in February.
Ian Stuart-Smith pleaded guilty on 6/3/07 to selling more than $8 million in bogus insurance policies to hard-to-insure bars and restaurants. Stuart-Smith was extradited from Canada to the U.S. in March and was held in New York’s Metropolitan Correctional Center till his trial. He posed as a New York wholesale insurance broker authorized to sell insurance for various underwriters such as Lloyd’s of London and operated several purported brokerages in New York and Ontario, Canada. A San Francisco man with ties to Stuart-Smith was sentenced early in March to ten years in prison and ordered to pay more than $13 million in restitution and forfeitures. Stuart-Smith faces eight-to-ten years in prison when he is sentenced in September. The Frauds Bureau and the U.S. Postal Inspection Service conducted the investigation that led to his arrest.
- GIVE-UP
Arrested on 6/28/07
Charged with insurance fraud in the 3rd degree, attempted grand larceny in the 3rd degree and perjury in the 1st degree
On 9/30/06, the defendant in this case reported to the Rochester Police Department that his 1998 Ford Expedition had been stolen from his home. He filed a claim with Liberty Mutual Insurance Company stating that about $20,000 in electronic/video accessories was installed in the vehicle at the time of the theft. However, an investigation by the Frauds Bureau, the Rochester Police Department’s Investigative Services Unit and Liberty Mutual’s SIU revealed that the defendant had given up his vehicle in order to collect an insurance payment to pay outstanding gambling debts. When confronted with the evidence, he confessed to the fraud.
- THREE CAUGHT
Arrested on 6/26/07
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree, falsifying business records in the 1st degree and conspiracy in the 5th degree
Three suspects were arrested and accused of conspiring in a scheme to report to the State Police and Progressive Insurance Company that a 2004 Chevy Blazer owned by two of the suspects had been stolen. The owners, a husband and wife, had purchased the car two weeks prior to the accident. However, an investigation by the Frauds Bureau with the assistance of the State Police revealed that the car was totaled in a roll-over accident. The driver, believed to be the husband, fled the scene.
- GROUP RATES
Arrested on 6/19/07
Charged with mail fraud under Title 18 of the U.S. Code 1341
The defendant in this case was charged with creating a fictitious group and presenting its members to MVP Health Plan in order to take advantage of lower group rates for which he received more than $13,200 in brokerage fees. In addition, he overcharged the insureds by $76,748 and failed to forward $60,645 in premiums to MVP. His arrest was the result of an investigation by the Insurance Department’s Frauds and Consumer Services Bureaus and the U.S. Postal Inspection Service.
- OH, DEER
Arrested on 6/19/07
Charged with insurance fraud in the 5th degree
A Saranac Lake resident submitted a claim to Progressive Insurance Company for damage to his windshield that he said had occurred when he hit a deer. However, an investigation by the Frauds Bureau and the State Police uncovered evidence that the windshield was actually damaged when the car struck a pedestrian in a hit-and-run accident. This is an ongoing investigation with additional charges possibly being brought against this defendant.
- SOME FRIENDS
Arrested on 6/15/07
Charged with insurance fraud in the 4th degree and grand larceny in the 4th degree
A couple reported to the City of Tonawanda Police Department that jewelry valued at $2,644 was stolen by friends who were visiting their home on 2/12/07. After an investigation, all of the jewelry was recovered and the “friends” were arrested. The couple repeatedly requested return of the jewelry and were assured by the Police Department that it would be returned once the criminal case against the thieves was closed. In the meantime, however, the couple filed a claim with New York Central Mutual Insurance Company for the theft of the jewelry and were issued a check for $1,500 which they cashed.
- DOCTOR FRAUD
Arrested on 6/11/07
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree and falsifying business records in the 1st degree
A physician at a Queens medical clinic was accused of falsely billing a number of no-fault insurers in the amount of $21,000 for costly tests that were never provided to seven auto accident victims. Among those insurers were GMAC, Kemper Auto and Home, Allstate and GEICO. The Frauds Bureau, the Queens DA’s Office, the NYPD’s Fraudulent Accident Investigation Squad and the National Insurance Crime Bureau pooled resources in the investigation. The matter will also be referred to the Department of Health’s Office of Professional Medical Conduct for review. A second physician who also practiced at the same Queens medical facility was arrested on 5/22/07 on similar charges.
- ARSON
Arrested on 6/11/07
Charged with criminal facilitation in the 4th degree and forgery in the 2nd degree
On 6/11/07, a third suspect was arrested in an arson case in which a father and son were previously arrested – the son on 12/14/06 and the father on 3/2/07 – for their roles in an arson fire at a vacant five-story factory owned by the father. The fire occurred on 11/12/06. This third suspect is the son’s wife who has been charged with criminal facilitation and forgery for her part in the fraud. The son confessed to setting the blaze by pouring gas and kerosene on pallets inside the building and lighting them. These actions created grave risk to emergency services personnel and those residing in close proximity to the factory. Several nearby homes and a high-rise apartment building with several elderly tenants had to be evacuated. The case, which was investigated by the Frauds Bureau, the Oneida City Police and Fire Departments, the Madison County DA’s Office, the Madison County Multi-Agency Task Force, the State Police, the Madison County Sheriff’s Department and the New York State Office of Fire Prevention and Control, received wide media attention. On 5/10/07, the son pleaded guilty to arson in the 3rd degree in Madison County Court. He will be sentenced after he testifies at his father’s trial.
- THE BOYFRIEND
Arrested on 6/5/07
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
On 5/31/06, the owner of a liquor store submitted an application for health insurance to Preferred Care for an employee at the store. The employee had been in a motorcycle accident on 5/9/06 and sustained $20,000 in medical bills. The store owner requested that the insurer back date the policy to 5/1/06, stating that the employee had worked at the shop prior to that date. However, Frauds Bureau investigators obtained payroll and tax records indicating that the person in question was never an employee at that shop. Further, other employees of the business stated during interviews that this person was the store owner’s boyfriend, not an employee. On 6/5/07, the defendant surrendered herself to the State Police in Rochester and was charged.
- NO-FALL FRAUD
Arrested on 6/1/07
Charged with insurance fraud in the 3rd degree and grand larceny in the 3rd degree
A joint investigation conducted by the Frauds Bureau, the Niagara Falls Police Department and Combined Life Insurance Company’s SIU led to the arrest of an upstate woman for submitting an allegedly fraudulent claim for disability benefits to Combined Life on 7/21/05, stating that she injured herself in a fall down her basement stairs. The insurer issued a check for $4,800 in benefits. However, the insurer’s SIU referred the claim to the Frauds Bureau as suspicious. Frauds Bureau investigators reviewed the entire file of documents submitted by the insurer and discovered evidence that the suspect had admitted while undergoing an independent medical examination in connection with another claim that she had presented false information on this claim. During an interview, the suspect confessed that she had not fallen down her basement stairs and the claim was fraudulent. She surrendered to the Niagara Police Department on 6/1/07.
- TAX EVASION
Arrested on 6/1/07
Charged with tax evasion under Title 26 of the U.S. Code 7201
An investigation by the Frauds Bureau and the FBI resulted in the arrest of a Long Island man who was accused of tax evasion. The suspect allegedly received kickbacks for referring victims of auto accidents for MRIs that were not necessary. The kickbacks involved a substantial amount of money that was never reported to the IRS as income.
PRIOR SUPPLEMENT
MAY 2007
- NO-FAULT FRAUD
Arrested on 5/21/07
Charged with insurance fraud in the 3rd degree
A Long Island resident was charged with participating in a staged accident and subsequently filing an allegedly fraudulent claim. MetLife Insurance Company paid out $3,000 in benefits for nonexistent injuries under her no-fault insurance coverage. Her arrest was the result of the joint efforts of the Frauds Bureau, the NYPD’s Fraudulent Accident Investigation Squad and the New York State Attorney General’s Office.
