Arrests for December 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
Steven Blackman of Poughkeepsie, NY, pleaded guilty on 12/23/10 to insurance fraud in the 5th degree in full satisfaction of all charges. He was ordered to pay $23,432 in restitution within six months of sentencing and a fine of $750. He was arrested on 12/1/09 and charged with insurance fraud in the 3rd degree for collecting more than $10,000 in lost wage benefits to which he was not entitled. After being injured in an auto accident, he filed for benefits under the no-fault portion of his auto insurance. He reported to New York Central Mutual Insurance Company that he was unable to work as a result of his injuries. However, an investigation by the Frauds Bureau found evidence that Blackman was working as a dance instructor at several local dance studios while fraudulently collecting benefits.
- GUILTY PLEAS
Brian Madden, the president and co-founder of Liberty Title Agency, pleaded guilty on 12/14/10 in Manhattan federal court to one count of wire fraud and one count of insurance fraud. He also controlled and operated two other title insurance agencies. Madden misappropriated millions of dollars of escrow and other client funds and embezzled a part of those funds for his personal use. In particular, between January 2008 and April 2009, he withdrew more than $2 million in cash from Liberty, one of the largest independently-owned title insurance agencies in New York State. The withdrawals at times totaled more than $300,000 in a single month. To sustain Liberty’s operations, Madden essentially used new funds from clients to pay off the debts to older clients. In addition, he failed to record dozens of real estate transactions in a timely fashion in spite of the fact that he had already been paid to record those transactions. He faces a statutory maximum sentence of 20 years in prison on the wire fraud charge and ten years on the insurance fraud charge. Sentencing is scheduled for 3/29/11. The investigation was conducted by the Frauds Bureau, the Office of the U.S. Attorney for the Southern District and the FBI.
Heidi Laviolette of Troy, NY, pleaded guilty to insurance fraud in Rensselaer County Court on 12/6/10. As part of her plea, she agreed to pay GEICO $33,000 in restitution, receive drug rehabilitation treatment and obtain employment. Laviolette was seriously injured when she crashed her car into an unoccupied house late on the night of 11/13/08. She managed to get to her home about 800 yards away where she called the police and the ambulance. She was admitted to Albany Medical Center with a broken ankle, a fractured rib and a collapsed lung and was ticketed by the police for DUI. In order to pay for medical expenses and lost wages, she filed for and received no-fault benefits from GEICO Insurance Company after claiming that she was not the driver but a passenger in the car when the accident occurred. She faces up to seven years in prison if she fails to satisfy the conditions imposed by the court. An investigation by the Frauds Bureau and the State Police led to her arrest on 9/8/10.
- SECRET STORAGE SPOT
Arrested on 12/23/10
Charged with falsifying business records
A Florida resident filed an allegedly fraudulent claim in the amount of $5,700 with Progressive Insurance Company, reporting that his motorcycle had been stolen. However, he was arrested when investigators discovered that the cycle was secretly stored on property owned by his mother and grandparents. When interviewed, the defendant submitted a written confession to filing the false theft report. The investigation was conducted by the Frauds Bureau with the assistance of the Florida Department of Financial Services’ Fraud Division.
- GAINFULLY EMPLOYED
Arrested on 12/23/10
Charged with violation of the Workers’ Compensation Law
While receiving benefits following a job-related injury on 4/27/90, the suspect in this case submitted numerous Work Activity Reports to the State Insurance Fund stating that she was not working nor had she sought employment since the time of her accident. However, an investigation by the Frauds Bureau turned up evidence indicating that she was gainfully employed as a waitress at a local restaurant in upstate New York while fraudulently collecting $7,183 in benefits.
- HEALTH CARE FRAUD
Arrested on 12/21/10
Charged with health care fraud
An Ulster County woman was charged with health care fraud when an investigation by the Frauds Bureau revealed that she listed as her husband a man who was not her husband on a family health insurance plan. As a result, MVP Health Care was fraudulently billed for $10,427 in medical treatment.
- CLEANING HOUSES WHILE COLLECTING
Arrested on 12/21/10
Charged with violation of Section 114 of the Workers’ Compensation Law
An investigation by the Frauds Bureau and the State Insurance Fund resulted in the arrest of an upstate resident for workers’ compensation fraud. The suspect submitted a Work Activity Report as part of her claim for benefits, stating that she was not engaged in any work activity since she sustained her injury. However, investigators learned that she had returned to her former occupation as a house cleaner. As a result of the fraud, she collected $2,630 in benefits to which she was not entitled.
- NOT DISABLED
Arrested on 12/17/10
Charged with offering a false instrument for filing and violation of Section 114 of the Workers’ Compensation Law
The defendant in this case began collecting workers’ compensation wage-replacement benefits after being classified with a permanent partial disability resulting from a work-related back injury on 10/5/88. In January 1989, he advised the State Insurance Fund that he had returned to work for a roofing company earning $400 a week. During the benefit period, he submitted 19 documents stating that his salary was $400 a week. During the same period, his employer submitted 16 reports confirming the $400 salary. However, W-2 forms and other documents revealed that he was earning substantially more than $400 a week, thus allowing him to collect $83,400 to which he was not entitled. Both he and the roofing company were charged in this case. The Frauds Bureau, the State Police and the Workers’ Compensation Board’s Office of the Fraud Inspector General pooled resources in the investigation.
- IN CAHOOTS
Arrested on 12/17/10
Charged with insurance fraud in the 3rd degree
An investigation by the Frauds Bureau revealed that one of the suspects in this case had a commercial insurance policy on his work truck cancelled as of 9/21/09 for nonpayment of premiums. On that same day at 8:26 a.m., he was involved in an accident with two other vehicles while driving the truck. He called his wife, suspect #2, who picked him up at the scene and drove him to a local insurance agency. They filed a no-loss statement that the truck had not been involved in any accidents or had any claims since the cancellation and the coverage was reinstated. He subsequently filed a no-fault claim, reporting that the accident had occurred on 9/21 at 10:00 a.m. when the reinstated coverage had become effective. As a result of the fraud, National Continental Insurance Company paid out $10,243 on the fraudulent claim.
- OWNER GIVE-UP
Arrested on 12/17/10
Charged with falsely reporting an incident in the 2nd degree and making a false statement in the 2nd degree
In a case involving an owner give-up, a Dutchess County man reported to the Poughkeepsie Police Department that his truck had been stolen from in front of a convenience store and he filed a $32,000 claim with Progressive Insurance Company for the loss. The truck was recovered three days later destroyed by fire. An investigation by the Frauds Bureau and the Poughkeepsie PD revealed that the suspect had given the truck to another person to dispose of. This investigation is continuing with additional charges possible, as well as the arrest of the person suspected of burning the vehicle.
- STILL WORKING
Arrested on 12/16/10
Charged with insurance fraud in the 3rd degree, offering a false instrument for filing in the 1st degree and violation of Section 114.1 of the Workers’ Compensation Law
An investigation conducted jointly by the Frauds Bureau, the State Insurance Fund and the Workers’ Compensation Board’s Office of the Fraud Inspector General resulted in the arrest of an Onondaga County man for scamming the workers’ compensation system. The suspect was injured at work in 1990 and while he collected $8,190 claiming he could not work, he was in fact employed at a local sports shop.
- FRAUDULENT CERTIFICATE
Arrested on 12/15/10
Charged with forgery in the 3rd degree
The Fulton County DA requested the assistance of the Frauds Bureau in the investigation of a contractor who submitted a certificate of workers’ compensation and general liability insurance coverage to a homeowner. However, during the investigation, the defendant admitted to creating the fraudulent certificate in order to obtain a roofing job.
- SCAMMING THE SYSTEM
Arrested on 12/14/10
Charged with perjury in the 1st degree, falsifying business records in the 2nd degree, insurance fraud in the 5th degree and violation of Section 114.1 of the Workers’ Compensation Law
Following a work-related injury on 10/2/09, the defendant in this case began collecting workers’ compensation benefits. On a number of occasions during the benefit period, he filed reports with Chartis Insurance Company stating his injury prevented him from working in any capacity. However, evidence uncovered during an investigation by the Frauds Bureau and the Workers’ Compensation Board’s Office of the Fraud Inspector General indicated that he was being paid as a truck driver while defrauding the workers’ compensation system of $9,642.
- LOANED CAR IN ACCIDENT
Arrested on 12/14/10
Charged with insurance fraud in the 3rd degree and falsely reporting an incident in the 3rd degree
The suspect in this case reported to the Albany Police Department that his 2002 Ford Taurus had been stolen and he filed a claim with Progressive Insurance Company for the loss. The car was recovered by the suspect two days later after having been involved in an accident. Progressive paid out $5,270 on the claim. However, an investigation by Albany PD with the assistance of the Frauds Bureau uncovered evidence that indicated the defendant had lent his car to another person who was driving the car when the accident occurred.
- PERSISTENT FRAUDSTER
Arrested on 12/14/10
Charged with insurance fraud
A Brooklyn woman and her friend were caught shoplifting. When officials tried to apprehend them, a fistfight ensued and the two women tried to flee in the defendant’s car. They were caught and charged with robbery. The car was impounded and the NYPD gave the defendant a voucher for the vehicle. She subsequently tried to report the car stolen at her local police precinct but the police would not take the report because the car had been impounded. The defendant then went directly to Liberty Mutual Insurance Company and again falsely reported the car stolen. Her arrest was the result of an investigation by the Frauds Bureau and the NYPD’s Auto Crime Unit.
- NONPAYMENT OF PREMIUMS
Arrested on 12/10/10
Charged with criminal possession of a forged instrument in the 2nd degree
A self-employed roofer presented a Certificate of Insurance to a homeowner as proof that he had valid liability insurance coverage. However, an investigation by the Frauds Bureau revealed that the Certificate was fraudulent. In fact, his insurance policy had been cancelled in April 2010 for nonpayment of premiums.
- TAXI DRIVER COLLECTS
Arrested on 12/10/10
Charged with violation of Section 114 of the Workers’ Compensation Law
The defendant in this case began collecting workers’ compensation benefits after sustaining a job-related injury. During the benefit period, he submitted several Work Activity Reports stating that the injury left him unable to work. However, an investigation by the Frauds Bureau found evidence that he was working and being paid as a taxi driver while fraudulently receiving $1,220 in benefits.
- ON THE JOB
Arrested on 12/9/10
Charged with insurance fraud in the 3rd degree, perjury in the 1st degree, falsifying business records in the 1st degree and violation of Section 114 of the Workers’ Compensation Law
An investigation by the Frauds Bureau and the State Police resulted in the arrest of a Syracuse man charged with fraudulently collecting workers’ compensation benefits. The defendant was classified as totally disabled following a work-related back injury on 6/1/04 while employed as a construction worker. He began collecting benefits from Guard Insurance Company and during the benefit period submitted documentation on several occasions stating he was unable to work. However, investigators discovered that from 11/08 to 11/09 while working as a mechanic/driver, he received $13,396 in benefits to which he was not entitled.
- ONLY CO-PAYS PAID
Arrested on 12/9/10
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree and falsifying business records in the 1st degree
After sustaining injuries in an auto accident, the defendant in this case received prescriptions for medication under his no-fault benefits. He submitted receipts to Selective Insurance Company for reimbursement for the prescriptions, together with an altered bill falsely indicating that he had paid the entire cost of the medication – a total of $33,200. In fact, an investigation by the Frauds Bureau revealed that Medicaid had paid for the prescriptions except for co-payments that ranged from $.50 to $6. These co-pays were the only out-of-pocket expense the defendant incurred.
- AT HOME
Arrested on 12/8/10
Charged with criminal possession of a forged instrument in the 2nd degree, insurance fraud in the 3rd degree, falsifying business records in the 1st degree and conspiracy in the 5th degree
The home of a Lewis County couple was damaged after a fire started in a downstairs closet on 9/9/09 while they were out. They filed a claim for living expenses under their homeowners policy with New York Central Mutual Insurance Company. In support of the claim, they submitted a lease agreement showing that they had rented temporary living quarters and included receipts for $2,400 a month in rent from 10/09 to 6/10. The couple was paid $17,360 in rent and additional expenses by the insurer. However, investigators learned that the lease and receipts were fraudulent and the couple was in fact still living in the home that was damaged by the fire while repairs were being made. In addition, the couple submitted to the insurer a $1,125 invoice for 15 cords of firewood that they claimed had been delivered to the “rented” home to supplement the heat. In fact, evidence determined that this premises did not have provisions for burning wood but was heated by propane gas. The arrests were the result of an investigation by the Frauds Bureau.
- TAXES PREPARED
Arrested on 12/8/10
Charged with violation of Section 114 of the Workers’ Compensation Law
A Bronx bookkeeper reported a work-related injury in July 2002 while working as a housekeeper and began collecting $400 a week in workers’ compensation benefits from the State Insurance Fund. However, she was arrested when investigators learned that she owned and operated a tax preparation business out of her home while collecting $135,110 in benefits to which she was not entitled. At the same time, she filed routine reports with the Workers’ Compensation Board stating her physical condition prevented her from working. The Frauds Bureau partnered with the State Fund in this investigation.
- 42 AND STILL COUNTING
Arrested on 12/7/10
Charged with Insurance Fraud in the 1st and 3rd degrees, grand larceny in the 3rd degree and falsifying business records in the 2nd degree
An investigation by the Frauds Bureau and the NYPD’s Fraudulent Accident Investigations Squad led to the arrest of a Brooklyn man for his role in a no-fault fraud scheme. He is the 42nd suspect arrested in this long-term investigation. He participated in two staged accidents that were set up by a third party. He falsely reported that he had been injured in both accidents and sought and received medical treatment for nonexistent injuries. As a result, GEICO and All Rental Car Insurance Companies were unjustly billed for more than $11,000 in no-fault benefits.
- ANOTHER TRASH RECYCLING JOB
Arrested on 12/6/10
Charged with insurance fraud in the 3rd degree, falsifying business records in the 1st degree and violation of Section 114.1 of the Workers’ Compensation Law
The defendant in this case was terminated from her job at a trash recycling plant on 9/20/07. She then filed a workers’ compensation claim with Acadia Insurance Company stating that she had fallen on the job on 9/18/07, injuring her wrists, arms, shoulders and knees. However, investigators uncovered evidence that shortly after her injury, she found work in the same type of business performing the same kind of activities for which she was fraudulently collecting nearly $5,547 in benefits. The investigation that led to her arrest was conducted jointly by the Frauds Bureau, the Workers’ Compensation Board’s Office of the Fraud Inspector General and the Geddes Police Department.
- CORRECTION OFFICE CAUGHT
Arrested on 12/6/10
Charged with insurance fraud in the 3rd degree, offering a false instrument for filing in the 1st degree and violation of Section 114.1 of the Workers’ Compensation Law
A Watertown correction officer reported a job-related injury to his left arm on 4/6/09 while he was working at an upstate correctional facility and began collecting wage-replacement benefits. During the benefit period, he submitted several Work Activity Reports to the State Insurance Fund stating that he was unable to work in any capacity since sustaining his injury. However, investigators discovered that he was doing construction work and from 4/9/09 to 7/16/09, he collected $6,270 to which he was not entitled. The Frauds Bureau, the State Fund, the Workers’ Compensation Board’s Office of the Fraud Inspector General and the Department of Correctional Services’ Workers Compensation Fraud Unit joined forces in this investigation.
- THREE FALSE REPORTS
Arrested on 12/2/10
Charged with insurance fraud in the 3rd degree and violation of Section 114.1 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 Saratoga Springs, NY, man charged with workers’ compensation fraud. The defendant reported being injured on the job and was subsequently classified as totally disabled. During the investigation, he denied that he was working when in fact he was fully employed. Based on the denial, three Doctor’s Progress Reports containing false information were submitted to NorGuard Insurance Company between 7/28/10 and 9/29/10. As a result of the fraud, NorGuard paid the defendant nearly $3,500 in benefits to which he was not entitled.
- CORRECTION OFFICER TURNED POLICE OFFICER
Arrested on 12/1/10
Charged with violation of Section 114 of the Workers’ Compensation Law
The defendant in this case, a correction officer from Catskill, NY, reported that he was injured on the job on 10/28/08 and 7/21/09 and each time began collecting workers’ compensation benefits. During the benefit periods, he had three Independent Medical Exams at which he provided documents stating that he had not worked in any capacity. However, investigators discovered that he had worked as a police officer for a local Greene County Police Department while fraudulently collecting $34,000 in benefits. Investigators from the Frauds Bureau, the Department of Correctional Services, the State Insurance Fund and the Workers’ Compensation Board’s Office of the Fraud Inspector General collaborated in this investigation.
- PRIOR SUPPLEMENT
October 2010
- SALES UNDER-REPORTED
Arrested on 10/29/10
Charged with offering a false instrument for filing in the 2nd degree
In a case involving premium fraud, the owner of a construction business reported to the State Insurance Fund that his company’s sales totaled $243,483 for the period 2006 through 2009. However, investigators from the Frauds Bureau and the State Fund retrieved an audit conducted by the Fund that showed other policyholders reported having paid $2,618,681 to the suspect’s company during the same period.
