Arrests for October 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
Akiva Abraham, a former physician whose license was revoked in 2005, was sentenced on 10/15/10 to 4-to-12 years in prison following his 8/25/10 conviction on a charge of insurance fraud. At trial, he was acquitted on charges of arson and reckless endangerment. The case revolved around a fire at The Saratoga Winners nightclub, a commercial property he owned in Colonie, NY. The property was closed at the time of the fire and had been vacant for three years prior to Abraham’s purchase. He over-valued the property in order to obtain a $475,000 mortgage and insured the property based on the bogus mortgage. After the fire, he filed a property loss notice with his insurer in an attempt to collect more than $380,000 in insurance proceeds. The case was investigated by the Frauds Bureau, the Town of Colony Police and Fire Departments, the State Police, the Albany County DA’s Office, the State Office of Fire Prevention and Control and the Albany County fire coordinator.
Edward Panus was sentenced on 10/4/10 in the Chenango County Court to 60 days in jail and was ordered to pay $4,500 in restitution to the State Insurance Fund. While collecting workers’ compensation benefits following a job-related back injury in 1988, he submitted 13 Work Activity Reports to the State Fund stating that he was not working in any capacity. However, an investigation by the Frauds Bureau with the assistance of the State Fund’s Division of Confidential Investigations and the State Police revealed that he owned and operated a fish hatchery in the upstate area. He was arrested on 2/4/09 and on 6/23/10 he was convicted at trial of three counts each of offering a false instrument for filing and workers’ compensation fraud.
- BUS - TED!
Arrested on 10/22/10
Charged with insurance fraud, attempted petit larceny and filing a false statement
An upstate resident was the fourth defendant arrested for allegedly faking injuries after minor accidents involving Niagara Frontier Transportation Authority (NFTA) buses. The other three were arrested in July 2010. This most recent defendant reported that she was injured when she was thrown about the inside of the bus. The arrests were the result of an investigation into the accidents by the Frauds Bureau, the NFTA, the Erie and Niagara County DA’s Offices and the Niagara Falls Police Department. Video images showing each of the four behaving casually during and after three separate low-speed accidents contrasted with insurance claims they later filed reporting that they suffered severe head, neck and back injuries.
- MAILING MISTAKE
Arrested on 10/21/10
Charged with grand larceny in the 4th degree
An investigation conducted by the Frauds Bureau and the State Insurance Fund led to the arrest of the suspect in this case. Evidence indicated that two checks issued to a State Fund beneficiary were erroneously mailed to the suspect. He allegedly forged the beneficiary’s name, cashed the checks and deposited the money into his personal checking account.
- NO PAYOUT
Arrested on 10/21/10
Charged with insurance fraud in the 4th degree
The defendant in this case reported to GEICO Insurance Company that his 2006 Acura had been stolen and filed a $16,041 claim for the loss. However, when he was interviewed during an investigation by the Frauds Bureau, he admitted that the car had not been stolen and that he submitted the fraudulent claim in order to collect the insurance payout.
- STAGED SLIP AND FALL
Arrested on 10/20/10
Charged with falsifying business records in the 1st degree and insurance fraud in the 5th degree
Video surveillance images led to the arrest of an Auburn, NY, man accused of staging a slip-and-fall accident. The video showed the suspect deliberately pouring soda onto the floor of a convenience store and then lying on the floor until customers and store employees came to his aid. He subsequently filed a claim with the store’s insurer, Traveler Property & Casualty Insurance Company for a purported back injury but later withdrew it. The Frauds Bureau and the Auburn Police Department pooled resources in the investigation that led to his arrest.
- NO PROOF
Arrested on 10/19/10
Charged with insurance fraud in the 3rd degree
An allegedly fraudulent homeowners insurance claim filed with Allstate Insurance Company led to the arrest of an upstate woman who was charged with insurance fraud. Her claim stated that several Harley Davidson motorcycle parts had been stolen from a storage shed on her property. In support of the claim, she submitted receipts from a local cycle shop as proof that she had purchased the parts for $18,525. However, investigators from the Frauds Bureau and the Irondequoit Police Department obtained statements from the cycle shop and from a Harley Davidson dealership stating that the receipts were fraudulent. The defendant voluntarily met with investigators and during an interview admitted that she knew the receipts were false when she submitted them.
- UNDER-REPORTING
Arrested on 10/18/10
Charged with violation of the Workers’ Compensation Law
The defendant in this case was accused of under-reporting the payroll of his drywall business from 2/04 through 3/08. As a result of the fraud, he avoided paying the State Insurance Fund $630,373 in premiums over the four-year period. His arrest was the result of an investigation by the Frauds Bureau and the Manhattan DA’s Office, with the cooperation of the State Fund.
- STRIKE FORCE IN ACTION
Arrested on 10/13/10
Charged with violation of Section 1349 of Title 18 of the U.S. Code
An ongoing investigation by the Medicare Fraud Strike Force, of which the Frauds Bureau is a member, led to the arrest of nine suspects. The Strike Force has been investigating a coast-to-coast scheme involving Armenian gangsters operating “phantom” medical clinics in 25 states. One of the defendants is reported to be the East Coast ringleader of the gang. As part of the Strike Force operation, the Frauds Bureau has been involved in the investigation of a medical facility in Brooklyn that allegedly defrauded insurers of more than $25 million. The investigation has resulted in 22 arrests thus far.
- OVER THE LIMIT
Arrested on 10/12/10
Charged with arson in the 3rd degree and insurance fraud in the 3rd degree
An upstate man reported that while driving home from work on 7/6/10, his 2006 Subaru Impreza suddenly caught fire under the driver-side hood. An investigation by the Frauds Bureau and Progressive Insurance Company’s SIU uncovered evidence that the car was leased, was due to be turned in at the end of July and was 35,000 miles over its mileage limit. Further, a forensic examination detected evaporated gas behind the front passenger seat and determined that to be the point of origin of the fire.
- PAIN IN THE NECK
Arrested on 10/10/10
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
An investigation conducted by the Frauds Bureau resulted in the arrest of a former rehabilitation specialist. After claiming that chronic neck pain caused by a job-related injury left her unable to work, she started collecting disability benefits. During the benefit period from March 2005 to 2009, she submitted allegedly fraudulent documents to her insurer stating that her disability prevented her from working. In fact, evidence indicated that she was employed as a family care provider while collecting nearly $46,870 in benefits to which she was not entitled.
- STRIKE FORCE STRIKES AGAIN
Arrested on 10/8/10
Charged with violation of Section 1349 of Title 18 of the U.S. Code
An investigation by the Medicare Fraud Strike Force into a suspect medical facility in Brooklyn led to the arrest of two defendants for their participation in a scheme that defrauded a number of insurers of more than $25 million. One of the defendants was a dispatcher who was accused of over-billing for patient transportation. The second allegedly posed as a doctor on occasion when he was actually the office manager. This investigation is ongoing.
- NONEXISTENT PRESCRIPTIONS
Arrested on 10/8/10
Charged with insurance fraud in the 2nd degree
A Rochester woman was charged with submitting allegedly fraudulent documents to Kemper Insurance Company from 8/7/06 to 5/18/09 in support of her claim for workers’ compensation benefits. She began collecting benefits following a job-related injury and later contacted Kemper stating that she did not realize prescription drugs would be covered. She informed Kemper that she had been paying cash for her prescriptions for several years and the insurer advised her to submit her receipts for payment. At that point, she started faxing paperwork to Kemper documenting prescriptions she claimed to have had filled between 2006 and 2009. An investigation by the Frauds Bureau, the Workers’ Compensation Board’s Office of the Fraud Inspector General and the Monroe County Sheriff’s Office turned up evidence that the defendant was reimbursed more than $245,900 by Kemper for prescriptions she never obtained.
- WHAT’S A BROTHER FOR?
Arrested on 10/7/10
Charged with violation of Section 114 of the Workers’ Compensation Law
An upstate Correction Officer began collecting workers’ compensation benefits after sustaining a work-related injury. During the benefit period, he submitted documents to the State Insurance Fund stating that he was not working in any capacity. However, surveillance observed him working at his brother’s home improvement business. As a result of the fraud, he collected $16,544 to which he was not entitled. An investigation conducted jointly by the Frauds Bureau and the State Fund’s Division of Confidential Investigations brought about his arrest.
- NO COVERAGE
Arrested on 10/7/10
Charged with offering a false instrument for filing in the 1st degree
The owner of a freight company had a contract with the U.S. Postal Service covering the year 2009 that required him to have workers’ compensation and employers liability coverage in effect for the life of the contract. He submitted a Certificate of Insurance to the USPS as proof that he had obtained the required coverage. However, an investigation by the Frauds Bureau revealed that the Certificate was fraudulent and no coverage existed.
- MORTGAGE FRAUD
Arrested on 10/6-7/10
Charged with grand larceny in the 2nd and 3rd degrees, scheme to defraud and falsifying business records
In February 2008, the AG’s Office requested the Frauds Bureau’s assistance in a mortgage fraud investigation that led to the arrest of five suspects – namely, the owner, manager, mortgage broker, office manager/realtor and attorney affiliated with the same mortgage company in Colonie, NY. They allegedly targeted homeowners who were having financial difficulties. They tricked the victims into executing “leaseback” agreements with the mortgage company which then took possession of the homes and sold them to straw buyers at inflated prices. The company kept the proceeds of the sales and the homeowners usually were evicted because either the mortgage was never paid by the mortgage company, or the leaseback agreement included penalties for late payments that increased the rent owed to an amount typically too costly for the lessees.
- ALTERED VINs
Arrested on 10/5/10
Charged with criminal possession of stolen property in the 3rd and 4th degrees and illegal possession of vehicle identification numbers
The Frauds Bureau worked with the NYPD’s Auto Crime Squad on an investigation the led to the execution of a search warrant at a parking garage in the Bronx. Investigators recovered four stolen vehicles, three of which had altered vehicle identification numbers (VINs). The owner of the garage was arrested and faces up to 21 years in prison if convicted.
- ENHANCED DAMAGES
Arrested on 10/1/10
Charged with Insurance fraud
A Long Island auto body shop owner was arrested following a search warrant executed at his place of business. Investigators placed a sting vehicle in his shop with verified damages of $3,100. After inspecting the car, GEICO Insurance Company estimated the damages at $7,965. The shop owner pleaded not guilty to the charge in Suffolk County Court on 10/2/10. The Frauds Bureau, the Suffolk County DA’s Office and the National Insurance Crime Bureau conducted the investigation, with assistance from GEICO. The defendant had previously been associated with another Long Island body shop that had produced more than 50 consumer complaints to the Frauds Bureau since 2005.
- WORKERS’ COMP FRAUD
Arrested on 10/1/10
Charged with insurance fraud and violation of the Workers’ Compensation Law
An investigation by the Frauds Bureau and the State Insurance Fund resulted in the arrest of an Ossining, NY, man for fraudulently collecting workers’ compensation benefits. He began receiving benefits after an injury on the job in September 2009. In March 2010, he testified at a hearing before the Workers’ Compensation Board that he had not worked since the start of his benefit period. However, investigators found that he allegedly was driving a cab while he collected $5,170 to which he was not entitled.
- PRIOR SUPPLEMENT
September 2010
- NOT NEIGHBORLY
Arrested on 9/29/10
Charged with identity theft in the 1st degree, possession of a forged instrument, grand larceny in the 3rd degree and criminal possession of stolen property in the 4th degree
Two residents of the same Manhattan apartment building were charged with stealing a $15,236 State Insurance Fund benefit check that was issued to a neighbor. They allegedly forged the beneficiary’s signature and cashed the check. An investigation by the Frauds Bureau resulted in the arrests.
