Arrests for March 2008
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
GUILTY PLEA IN WORKERS’ COMP CASE
A correction officer at the Mohawk Correctional Facility in Rome, NY, pleaded guilty on 3/24/08 to attempted offering a false instrument for filing. He had been under suspension since his 1/21/08 arrest. On 3/20/07 and 3/29/07, he submitted medical forms claiming that he had sustained an injury on the job. The forms contained a doctor’s report stating that he was unable to work and was medically excused from 2/16/07 to 3/5/07. However, an investigation conducted by the Frauds Bureau, the Workers’ Compensation Board’s Office of the Inspector General and the Department of Corrections turned up evidence that the doctor in question had never examined the suspect nor did he provide a report excusing the suspect from work. As part of his plea, the suspect resigned from his position with the Correction Department and agreed not to seek employment with any law enforcement agency in New York State.
- NO LOSS
Arrested on 3/27/07
Chargedwith grand larceny in the 3rd degree
The owner of a recently closed restaurant in Troy, NY, filed a claim with Selective Insurance Company and National Grid Power Company stating that he lost $7,000 worth of food because of a power outage that occurred in the area in July of 2007. He was paid $5,000 by National Grid for the loss. However, an investigation by the Frauds Bureau, the Rensselaer County DA’s Office and the State Police revealed that the suspect did not loose any food at the restaurant and the claim was fraudulent.
Arrested on 3/26/08
Chargedwith violation of Section 114-1 of the Workers’ Compensation Law
A joint investigation by the Frauds Bureau, the North Tonawanda Police Department and AIG Insurance Company led to the arrest of a suspect accused of filing a fraudulent workers’ compensation claim. On 2/12/07, following an injury on the job, the suspect began collecting workers’ compensation benefits. However, information developed by AIG indicated that he was delivering pizzas for a local pizzeria. In an interview, the owner of the business stated that the suspect had worked for him for about six months prior to the pizzeria’s closing on 12/31/07. Moreover, investigators observed his car parked outside another pizzeria on a number of occasions after that date and suspected that he was working there. A Frauds Bureau investigator confronted the suspect at the pizzeria on 3/17/08. At that time, the suspect admitted that he had worked at the first pizzeria until it closed and was currently working at the pizzeria where the investigator found him. He also confessed that he had lied when he stated at a workers’ compensation hearing that he was not working while he collected benefits to which he was not entitled.
- A COUPLE OF FRAUDSTERS
Arrested on 3/26/08
Chargedwith offering a false instrument for filing in the 1st degree and falsifying business records in the 1st degree
The Frauds Bureau assisted the Otsego County DA’s and Sheriff’s Offices in a 13-month joint investigation that led to the arrest of an upstate couple for causing false entries to be made in the financial records of the Town of Pittsfield. The husband was a part-time employee at the Town’s transfer station. However, his wife was the employee of record and his paychecks were made out to his wife and mailed to her. The husband allegedly falsified the payroll records to cover the fact that he was collecting disability benefits while he was working.
- STATE WORKER CAUGHT
Arrested on 3/25/08
Chargedwith insurance fraud and falsely reporting an incident
A project manager for the New York State Comptroller’s Office was charged with filing a fraudulent insurance claim with New York Central Mutual Insurance Company. The suspect reported to the insurer that a fur coat valued at $3,500 was stolen from her car. The insurer became suspicious because the claim was one of a series of claims she had filed over the course of a year. Investigators subsequently discovered the coat at her home and she confessed to the fraud. The Frauds Bureau, with the assistance of the Albany Police Department, conducted the investigation that led to her arrest.
- THREE STRIKES, YOU’RE OUT
Arrested on 3/21/08
Chargedwith insurance fraud in the 4th degree and attempted grand larceny in the 4th degree
On 12/10/07, the defendant in this case filed a claim with GEICO Insurance Company stating the her 2000 Dodge Caravan had been vandalized, leaving deep scratches to the paint on the right side of the car. An estimate was prepared, photos were taken of the damage and the defendant was paid $1,518 for the loss. Several weeks later, on 1/4/08, she submitted another claim to GEICO, reporting that her car had again been vandalized, this time causing deep scratches to the paint on the left side of the car. An estimate was again prepared, photos were taken and GEICO issued a check for $1,523. On 2/4/08, the defendant filed a third claim, this time with AIG Insurance Company, stating that inclement weather had caused damage to the paint on both sides of her car. Photos were taken and the damage was estimated at $1,200. However, a review of the three claims and the photos indicated that the scratches reported with the AIG claim were similar to the scratches reported with the previous two claims submitted to GEICO. Investigators interviewed the defendant and, when confronted with the evidence, she confessed to the fraud. The investigation was conducted jointly by the Frauds Bureau, the Niagara Falls Police Department, and GEICO and AIG Insurance Companies.
- NO WAGES LOST
Arrested on 3/17/08
Chargedwith insurance fraud in the 3rd degree
The defendant in this case was accused of attempting to collect $9,000 in lost-wage benefits under fraudulent circumstances. He was involved in an auto accident on 4/8/07 and claimed $500 a week for an 18-week period beginning on 4/8. However, an investigation by the Frauds Bureau and the State Police turned up evidence that this defendant was unemployed at the time of the accident. He did find part-time work as a cook in May 2007 but was terminated for job abandonment when he failed to report to the job. Further investigation showed that he was unable to report to work because he was in jail on assault and petit larceny charges at the time. He was accused of assaulting an elderly woman with a shopping cart and attempting to flee the scene with the cart and groceries.
- NOT ENTITLED
Arrested on 3/14/08
Chargedwith perjury in the 1st degree and making a false statement
An Orange County deputy sheriff was arrested for allegedly participating in a scheme to fraudulently collect workers’ compensation benefits. She reported an on-the-job back injury in June 2005 and began collecting benefits. During the three-year benefit period, she was brought back to work several times to perform light duty tasks but she claimed her back pain was so severe that she could not even sit at a desk. She also stated at a workers’ compensation hearing that she was not engaged in any outside employment. However, an investigation by the Frauds Bureau, the Orange County DA’s and Sheriff’s Offices and the Workers’ Compensation Board’s Office of the Inspector General revealed that she was gainfully employed selling real estate and managing her own properties while collecting $75,000 in benefits to which she was not entitled.
- CAR FIRE
Arrested on 3/13/08
Chargedwith insurance fraud and falsely reporting an incident
An investigation by the Frauds Bureau and the Hamburg Police Department resulted in the arrest of a woman who allegedly paid a friend $100 to have her car burned after she was told that “it would never be the same” following an accident. She reported the car stolen to the police and State Farm Insurance Company in October 2006. The car was later recovered on a Buffalo street where it had been burned.
- MEDICAL MILL TAKE-DOWN
Arrested on 3/11/08
Chargedwith enterprise corruption, scheme to defraud in the 1st degree, grand larceny in the 1st degree, money laundering in the 1st and 2nd degrees, insurance fraud in the 3rd, 4th and 5th degrees, falsifying business records in the 1st degree, coercion in the 1st degree, offering a false statement for filing in the 3rd degree and violation of the New York State Tax Law
Eleven persons, including three doctors, a chiropractor and two acupuncturists, and ten corporations were charged in an 84-count indictment with operating a medical mill that cheated insurers of more than $6.2 million over a five-year period. Two other suspects who allegedly assisted in the criminal affairs of the enterprise were charged in separate indictments. The enterprise used “runners” to stage accidents and bring “patients” to the clinic where medical providers prescribed unnecessary treatments, procedures and durable medical equipment, falsified medical records and submitted fraudulent claims to insurers. Four management and realty companies and six professional corporations were used to conceal parts of the operation and to launder the proceeds. The Frauds Bureau, the Manhattan DA’s Office, the NYPD’s Fraudulent Accident Investigation Squad, GEICO and MetLife Insurance Companies and the National Insurance Crime Bureau pooled resources in the investigation that led to the take-down. The DA’s Office has also begun a civil forfeiture action against the 11 individuals and ten corporations to recover the more than $6.2 million stolen from insurers while the medical mill was in operation.
- WORKERS’ COMP FRAUD
Arrested on 3/3/08
Chargedwith offering a false instrument for filing in the 1st degree and committing a fraudulent practice under Section 114.1 of the Workers’ Compensation Law
The defendant in this case reported a work-related injury on 3/21/01 and began collecting workers’ compensation benefits. However, an investigation by the Frauds Bureau, the State Insurance Fund and the State Police uncovered evidence that he returned to work running a snow plow business during the winter months from 12/31/01 until 6/18/07, all the while collecting benefits. During this time, he submitted 19 Work Activity Reports to the Fund stating that he was unable to work.