Arrests for June 2010
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
James E. Papas, of Gilboa, NY, was sentenced on 6/23/10 to time served in jail, five years’ probation and ordered to pay $3,480 in restitution after pleading guilty to insurance fraud. An arson charge against him was dropped in exchange for his guilty plea. Papas was arrested on 3/9/10 after an investigation by the Frauds Bureau, the State Office of Fire Prevention and Control and the State Police in connection with a fire that destroyed his mobile home. Papas initially claimed he was blasted out of a window and thrown 35 feet when a propane explosion occurred inside the home. He later gave authorities conflicting accounts of the event. Investigators eliminated a propane furnace as the cause of the fire and determined that several fires had been ignited in outbuildings on Papas’s property. The investigation also revealed that his homeowners insurance policy was schedule to expire on the day after the fire.
On 6/21/10, Jennifer Crowley, a licensed broker for State Farm Insurance Company, was sentenced to five years’ probation and court-ordered restitution of $11,600 to State Farm Insurance Company. Crowley had pleaded guilty on 3/1/10 to grand larceny in the 4th degree in connection with the charge. When her employer learned that in 2008 Crowley had forged her estranged husband’s name on a State Farm Bank home equity loan and received $30,000, an investigation was initiated. Investigators discovered that Crowley forged her employer’s signature to create five checks drawn on the agency that employed her, thereby defrauding the agency and its clients of $11,600. (The matter of the $30,000 home equity loan was subsequently resolved in the Crowleys’ divorce decree.)
Lester Mancuso and two of his sons, Steven and Paul, were sentenced on 6/9/10 to federal prison after pleading guilty to conspiracy and mail fraud-related charges. They pleaded guilty on 10/28/09 to conspiring to cover up an illegal asbestos removal operation throughout the Mohawk Valley region. The father was sentenced to a term of 3 years, Steven Mancuso to 3 2/3 years and attorney Paul Mancuso, the mastermind behind the operation, to 6 ½ years and a fine of $20,000. The fine was levied for allowing asbestos to be dumped in a field and washed down a drain at a Utica School. The three Mancuso’s were also sentenced to three years of supervision once released from prison. Additionally, a hearing is scheduled for 9/8/10 to determine the amount of restitution they should be responsible for as a result of their shoddy work. A third son, Ronald, who testified against the other family members, is awaiting sentencing. The investigation that led to the arrests was conducted jointly by the Frauds Bureau, the Environmental Protection Agency and the Workers’ Compensation Board’s Office of the Fraud Inspector General.
Niagara Falls resident Michael Boyd pleaded guilty on 6/9/10 to petit larceny and was sentenced to a one-year conditional discharge and ordered to pay $6,350 in restitution. He was arrested on 12/9/09 after an investigation by the Frauds Bureau, the Niagara Falls Police Department and the State Insurance Fund revealed that he had collected $9,688 in workers’ compensation benefits between 10/9/08 and 7/30/09 while working as a bartender at a local establishment.
- CONVICTED
Edward Panus was convicted on 6/23/10 of offering a false instrument for filing and workers’ compensation fraud. He was found guilty of submitting numerous Work Activity Reports stating that he was not able to work in any capacity after reporting a job-related injury in 1988. However, evidence showed that he earned $66,000 in benefits while operating a fish stocking business near his upstate home. The Frauds Bureau, the State Insurance Fund and the State Police pooled resources in the investigation that led to his arrest.
Dr. Anthony LaTona, a Queens chiropractor, was convicted on 6/3/10 of insurance fraud in the 3rd degree. Investigators found evidence that he convinced a “patient” to fabricate injuries and then billed Empire Blue Cross and Blue Shield more than $26,000 for medical treatments over a three-month period. He allegedly paid a $1,000 kickback to the “patient” who was actually an undercover investigator. According to the charges, LaTona met with the undercover at his office on 9/16/08 where he instructed the undercover to fake back and knee injuries in order to obtain insurance payments. He allegedly offered the undercover the kickback at that meeting.
- TEN-YEAR FRAUD
Arrested on 6/30/10
Charged with grand larceny in the 2nd and 4th degrees, falsifying business records in the 1st degree and criminal possession of a forged instrument in the 2nd degree
The three defendants in this case were charged with stealing $474,000 from Progressive and Mercury Insurance Companies over a ten-year period. The scheme was carried out between 2000 and 2006 while defendant #1 was employed as a claims examiner by Progressive and later when she worked for Mercury. (She was fired last December.) She allegedly issued insurance company checks for supplemental payments to policyholders to whom legitimate claims had already been paid. She used fake claim numbers, or in some cases, no claim numbers on the checks. She then forged claimants’ signatures and countersigned the checks, making them payable to herself, or gave the checks to her two co-defendants to do the same. The scheme was uncovered when a bank clerk noticed an unusual number of checks bearing different claimants’ names being countersigned and cashed by defendant #1 for deposit into her personal account. An investigation by the Frauds Bureau and the Colonie Police Department led to the arrests.
- FRAUDULENT DOCUMENTS
Arrested on 6/30/10
Charged with insurance fraud in the 3rd degree and falsifying business records in the 2nd degree
After being involved in an auto accident, a Schenectady man filed a claim for wage-replacement benefits with Nationwide Insurance Company. However, an investigation by the State Police, with the assistance of the Frauds Bureau, revealed that the documents he submitted in support of his claim were fraudulent. As a result, he collected $5,300 in benefits to which he was not entitled.
- SNOW REMOVAL IS WORK
Arrested on 6/29/10
Charged with offering a false instrument for filing in the 1st degree and violation of the Workers’ Compensation Law
Following a work-related injury, a general contractor from upstate New York began collecting workers’ compensation benefits. On a number of occasions during the benefit period, he submitted Work Activity Reports to the State Insurance Fund stating that he was unable to work as a result of his injury. However, an investigation by the Frauds Bureau, the Fund and the State Police revealed that he was conducting a snow-removal operation for various local businesses. As a result, he fraudulently collected $3,888 in benefits.
- SUSPICIOUS POSTMARKS
Arrested on 6/28/10
Charged with insurance fraud in the 3rd degree, offering a false instrument for filing in the 1st degree and violation of Section 114.01 of the Workers’ Compensation Law
A former New York State resident began collecting wage-replacement benefits after he reported a back injury while employed as a truck driver in 1990. During the benefit period, he submitted 13 Work Activity reports stating that he was unable to work as a result of his injury. Many of these reports bore Florida postmarks, arousing suspicion that resulted in an investigation by the Frauds Bureau, the State Insurance Fund and the State Police. Through surveillance, investigators found that the suspect was living and working full-time as a mechanic in Florida. Between 2005 and 2010, he collected $39,000 in benefits to which he was not entitled.
- STOLEN CHECKS
Arrested on 6/21/10
Charged with grand larceny in the 3rd degree, forgery in the 2nd degree, insurance fraud in the 3rd degree and falsifying business records in the 1st degree
Between October 2009 and January 2010, the defendant in this case allegedly forged her father’s signature on seven workers’ compensation benefit checks totaling $3,776. The checks, which she subsequently cashed, were issued after her father’s death. When interviewed during an investigation by the Frauds Bureau and the State Insurance Fund, she confessed to the fraud.
- 2007 MURDER LEADS TO ARREST
Arrested on 6/17/10
Charged with perjury in the 1st degree and violation of Section 114.02 of the Workers’ Compensation Law
An investigation by the Frauds Bureau and the Workers’ Compensation Board’s Office of the Fraud Inspector General resulted in the arrest of a Norwich, NY, property owner for failing to obtain workers’ compensation insurance coverage for an employee who managed several of his apartment buildings. The employee was raped and murdered inside an apartment in one of the buildings in 2007. The tenant of that apartment was sentenced to life in prison for the crime. Authorities learned of the defendant’s failure to secure the coverage when the employee’s estate filed a death benefit claim with the Workers’ Compensation Board. The defendant reimbursed the Board $50,000 that it had paid the employee’s estate, $5,000 in funeral expenses and another $6,000 in penalties. He also has an outstanding $30,000 penalty for operating without insurance in 2010. He is disputing that penalty, claiming he has no employees.
- $525 SALARY PLUS BENEFITS
Arrested on 6/17/10
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree, falsifying business records in the 1st degree, offering a false instrument for filing in the 1st degree and violation of Section 114 of the Workers’ Compensation Law
Following a work-related back injury in 1994, this suspect was awarded $215 a week in workers’ compensation benefits. However, an investigation by the Frauds Bureau, the Nassau County DA’s Office and the State Insurance Fund uncovered evidence that she applied for work as a babysitter in 2006. At the time, she listed several babysitting jobs dating back to 1999 and she was hired as a babysitter earning $525 a week. As a result of the fraud, she collected $33,755 in benefits to which she was not entitled.
- EMPLOYS 98, REPORTS 1
Arrested on 6/16/10
Charged with grand larceny, insurance fraud, falsifying business records and violation of Sections 96 and 114 of the Workers’ Compensation Law
The owner of an asbestos removal company provided materially false information on an application for workers’ compensation insurance coverage in an effort to avoid paying the appropriate premium rate. He stated that he was the only employee of the business and that his payroll totaled $50,000. However, an investigation revealed that he employed 98 workers at a payroll of $1,150,000. As a result, he defrauded the State Insurance Fund of $75,221 in premiums due.
- AUDIT REVEALS FRAUD
Arrested on 6/16/10
Charged with possession of a forged instrument, falsifying business records and violation of Section 114.01 of the Workers’ Compensation Law
An investigator by the Frauds Bureau, the Nassau County DA’s Office and the State Insurance Fund led to the arrest of a Long Island sub-contractor who submitted two allegedly fraudulent Certificates of Insurance to a contractor as proof that he had workers’ compensation insurance coverage as required by New York State law. However, an audit of his company conducted by the Fund found evidence that no such coverage existed.
- MAJOR HEALTH CARE FRAUD/MONEY LAUNDERING SCHEME
Arrested on 6/15/10
Charged with health care fraud and money laundering
An investigation by the Frauds Bureau, the Office of the U.S. Attorney for the Eastern District and the NYPD led to the arrest of 18 defendants (including one who had fled to Florida and was arrested on 6/17) for their participation in health care fraud and money laundering schemes. Agents from Immigration and Customs Enforcement, the IRS and the FBI executed search warrants at the offices of 12 durable medical equipment retail companies that were operated by the defendants in Brooklyn and seized bank account assets. The defendants allegedly used their companies to submit fraudulent invoices to private no-fault insurers for reimbursable expenses for durable medical equipment at prices much higher than the price paid by the defendants, as well as for durable medical equipment that was never obtained. They laundered the proceeds by issuing checks to their companies which were cashed at various check cashing facilities and the cash was delivered back to the defendants.
- JOB CLASSIFICATION AND PAYROLL CONCEALED
Arrested on 6/15/10
Charged with falsifying business records in the 1st degree and violation of Section 96.01 of the Workers’ Compensation Law
A husband and wife were charged with submitting allegedly false information on an application for workers’ compensation insurance coverage. They concealed the fact that their business, which purportedly was a construction site clean-up operation, also performed roofing work with an additional payroll of $104,671. The fraud cost the State Insurance Fund more than $30,900 in premiums. The Frauds Bureau conducted the investigation that led to the arrest.
- OWNER GIVE-UP
Arrested on 6/11/10
Charged with arson in the 3rd degree
A Chemung County woman filed a claim with MetLife Insurance Company stating that her car caught fire and burned. However, when she was interviewed during an investigation conducted by the Frauds Bureau, she admitted that she had deliberately set the fire that destroyed her car, as well as setting several other fires near her home.
- WRONG ANSWER
Arrested on 6/10/10
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree, falsifying business records in the 1st degree and violation of Sections 96.01 and 114.01 of the Workers’ Compensation Law
In this case, two suspects acting in concert filed an application for workers’ compensation insurance coverage on which they answered “No” to the question, “Have you ever been in business with the New York State Insurance Fund under a different name?” However, an investigation by the Frauds Bureau uncovered evidence that there was a prior policy for a trucking company of which one of the suspects was president and on which there was a $4,614 premium balance due. The trucking company was also charged in this case.
- $2,070 DECEPTION
Arrested on 6/10/10
Charged with insurance fraud in the 4th degree
An Albany woman reported to the Albany Police Department and to Nationwide Insurance Company that her apartment had been burglarized and items valued at $2,070, including a TV and a digital camera, were stolen. However, an investigation by the Frauds Bureau determined that the defendant’s report of the stolen items was false.
- RELEASED FROM PRISON AND ARRESTED
Arrested on 6/8/10
Charged with grand larceny in the 4th degree and forgery in the 3rd degree
A Moravia, NY, contractor submitted a Certificate of Liability Insurance for work at a private residence. When the homeowner was unsatisfied with the work, he filed a claim with Dryden Mutual Insurance Company and discovered that the Certificate was fraudulent and there was no coverage in place. The homeowner contacted the Frauds Bureau and filed a complaint. Investigators requested the assistance of the State Police in locating and interviewing the suspect. Further investigation revealed that the suspect was in state prison. The State Police obtained a warrant and when the defendant was released from prison on 6/8/10, he was arrested.
- WORKERS' COMP FRAUD
Arrested on 6/8/10
Charged with grand larceny, insurance fraud, falsifying business records and offering a false instrument for filing
Following a work-related injury, the defendant in this case began collecting workers’ compensation benefits. During the benefit period, he submitted numerous Work Activity Reports stating that he was unable to work. However, an investigation by the Fraud Bureau and the State Insurance Fund uncovered evidence that indicated he was fully employed while he fraudulently collected nearly $31,900 in benefits.
- HEAVY WORK FOR “DISABLED”
Arrested on 6/7/10
Charged with insurance fraud in the 3rd degree and violation of Section 114 of the Workers’ Compensation Law
A former Poughkeepsie Housing Authority employee was awarded total disability payments after reporting that he could not walk or even get out of the house following a work-related back injury in January 1992. However, during an investigation by the Frauds Bureau, with the assistance of the State Insurance Fund, investigators observed him both carrying and painting on a ladder, replacing window shutters and an outside deck, installing awnings and stair rails and operating a backhoe. The alleged misrepresentation of his work status resulted in an overpayment of $20,546 in benefits.
- FORGED RECEIPTS
Arrested on 6/3/10
Charged with insurance fraud in the 3rd degree
Following a burglary at his home, an Albany man filed a claim with Travelers Insurance Company for the loss. In support of his claim, he submitted receipts as proof of purchase of jewelry, a fur coat, TV sets and stereo components. However, an investigation by the Frauds Bureau found evidence that the receipts were forged and the reported items were not stolen in the burglary.
- MISDATED
Arrested on 6/2/10
Charged with attempted grand larceny in the 3rd degree
The defendant in this case was involved in an auto accident and reported to Infinity Insurance Company that the hood of his car flew up and caused damage to the windshield. However, when he learned that his policy had been cancelled for nonpayment of premium, he purchased insurance through Progressive Insurance Company and filed a $3,800 claim for the damage. An investigation conducted jointly by the Frauds Bureau, the New York Mills Police Department and Progressive’s SIU revealed that the claim falsely stated that the accident had occurred after the coverage became effective.
- SENTENCED
Ronald J. Snyder of Oneida County was sentenced on 5/25/10 to five years’ probation and ordered to make full restitution of $24,570 in wage replacement benefits he fraudulently collected from the State Insurance Fund from 2/20/08 to 4/23/09. During the benefit period, he submitted documents to the Fund on 17 occasions stating that he was unable to work as a result of two separate work-related injuries sustained in 2003 and 2004. However, an investigation by the Frauds Bureau, the State Insurance Fund and the Workers’ Compensation Board’s Office of the Fraud Inspector General revealed that Snyder was working as an auto mechanic while collecting the benefits to which he was not entitled.
PRIOR SUPPLEMENT
May 2010
