Arrests for May 2011
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
Buffalo podiatrist William Holley was sentenced on 5/26/11 to six months in federal prison, one year of supervised release and ordered to pay restitution of $36,070 to Medicare and $799 to Univera Healthcare. He was charged on 1/4/09 with 28 counts of health care fraud and pleaded guilty to one misdemeanor count of theft in connection with health care fraud on 1/5/11. He admitted that in April 2005, he submitted a claim to Medicare stating that he had performed a procedure called a “wedge excision” when, in fact, he had not. He was originally charged with repeatedly billing Medicare and private insurers for expensive treatments when he was actually providing only routine foot care. The investigation that led to his arrest was conducted by the Western New York Health Care Fraud Task Force of which the Frauds Bureau is a member.
Upstate resident Anthony Constantino was sentenced on 5/26/11 to one year in prison after pleading guilty to insurance fraud in the 5th degree. On 6/16/10, he reported to Allstate Insurance Company that his 2003 Ford Ranger had been vandalized, causing damage to the radiator, condenser and tires. He filed a claim for the damage and faxed a $1,220 receipt from Genesee Valley Ford dealership for allegedly completed repairs. Allstate contacted the dealer who reported that the repairs were not done in his shop. When confronted with this information, Constantino changed his story and said that another body shop, Pelican Motors, had done the repair work. Pelican also had no record of repairing the car. When Constantino was interviewed during an investigation by the Frauds Bureau, the Livingston County Sheriff’s Office and Allstate’s SIU, he admitted that he submitted the fraudulent receipt in an attempt to collect the insurance payout.
Robert M. Moore of Rochester, NY, was sentenced on 5/24/11 to five years’ probation and ordered to pay $10,073 in restitution to Excellus Health Plan following his conviction on a charge of insurance fraud in the 5th degree. An investigation by the Frauds Bureau revealed that he had falsely named his live-in girlfriend as his wife on the Excellus plan he received through his employer. As a result, the girlfriend received $13,791 in medical/dental/prescription drug benefits to which she was not entitled.
Donald Kropp, the owner of a home heavily damaged in a 7/23/09 fire, was sentenced on 5/16/11 to a year in jail and five years’ probation for intentionally setting the fire. He was also ordered to pay New York Central Mutual Insurance Company $80,081 in restitution. He had pleaded guilty on 3/15/11 to attempted arson and insurance fraud. Kropp lived in the two-story structure with his wife and three children. However, no one was at home when the fire was discovered by a neighbor who called the fire department. About 75 firefighters from Oneonta and surrounding departments fought the blaze, two of whom were injured at the scene. The Oneonta Police and Fire Departments, the Frauds Bureau and New York Central Mutual conducted the investigation that determined the fire was deliberately set.
- GUILTY PLEAS
On 5/11/11, chiropractor Christopher Fronczak surrendered himself to the FBI and was charged with violation of Title 18 of the U.S. Code. He pleaded guilty to one count of federal health care fraud and will be sentenced on 9/7/11. From 2005 through 2009, he submitted more than $200,000 in fraudulent claims to Excellus Health Plan. In numerous cases, he provided routine services but submitted claims for more expensive treatments. In other instances, he billed for services that were not provided and for visits that never took place. An investigation by the Frauds Bureau and the FBI led to his arrest.
Frank C. Ricca Jr. of Lake Carmel, NY, pleaded guilty to insurance fraud and arson on 5/3/11. He originally reported that his liquor store was set on fire by four persons unknown to him who assaulted and robbed him, tied him up and left him in the burning building. He escaped through a basement door and was found standing outside the building with his hands bound behind him. However, a two-year investigation conducted by the Frauds Bureau, the Town of Kent Police Department and the Putnam County DA’s Office led to his arrest on 4/19/10. Investigators learned that he had set the fire himself because his business was in financial ruin, the bank had begun foreclosure proceedings on a $365,000 mortgage for the business and the State Tax Commission had three judgments against the store for more than $39,000 in unpaid taxes. Sentencing is scheduled for 7/5/11.
- PROOF IN PAYROLL RECORDS
Arrested on 5/27/11
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
Following a work-related injury, an upstate painter began collecting workers’ compensation benefits. During the benefit period, he testified at a Workers’ Compensation Board hearing that he was not working in any capacity. In addition, he filed a Work Activity Report with Erie Insurance Company providing the same information. However, surveillance observed him traveling to numerous locations carrying in paint supplies. Moreover, the payroll records of a local painting company showed that the defendant was employed there from 6/4/10 to 11/12/10. During an interview on 5/23/11, the defendant told investigators that he was not working for the painting company but had instead sold the company’s owner some paint equipment. When confronted with the payroll records, he admitted to fraudulently collecting $8,804 in benefits. The Frauds Bureau and the State Police pooled resources in the investigation that led to his arrest.
- THEFT OF PREMIUMS
Arrested on 5/26/11
Charged with insurance fraud in the 4th degree, grand larceny in the 4th degree and falsifying business records in the 1st degree
On 2/5/09, a former licensed adjuster for Allstate Insurance Company took in $1,198.86 in cash premium payments from five Allstate policyholders and the payments were entered into the business records of the insurer as having been received. However, Bank of America records subsequently indicated a cash deposit of $75.16, a shortage of $1,123.70. When Frauds Bureau investigators brought the shortage to the defendant’s attention, he produced a second deposit slip that showed a deposit of the correct amount of cash taken in on 2/5/09 that he claimed to have deposited to Bank of America. Bank records showed that no second deposit was made by the defendant to Allstate’s account, causing a loss of $1,123.70 to the insurer.
- CAR TORCHED
Arrested on 5/24/11
Charged with insurance fraud in the 3rd degree, attempted grand larceny in the 3rd degree, falsifying business records in the 1st degree, offering a false instrument for filing in the 1st degree and falsely reporting an incident in the 1st degree
An investigation conducted jointly by the Frauds Bureau, the FDNY Fire Marshals and the NYPD’s Internal Affairs Bureau resulted in the arrest of an NYPD detective who reported on 9/7/09 that his car had been stolen. He subsequently filed a claim with GEICO Insurance Company for the loss. However, during the investigation his car was found burned on a date that preceded the date on which he reported having last seen it. The indictment alleged that he acted in concert with one or more other persons.
- OWNER GIVE-UP
Arrested on 5/23/11
Charged with attempted grand larceny in the 3rd degree, insurance fraud in the 3rd degree, falsely reporting an incident in the 3rd degree, criminal facilitation in the 4th degree, conspiracy in the 5th degree and false written statement
The defendant in this case reported to the NYPD that he had last seen his 2004 Cadillac at 5:30 p.m. on 1/29/11. He subsequently filed a claim with GEICO Insurance Company for the loss. However, an investigation by the Frauds Bureau and the FDNY Fire Marshals revealed that he had entered into a contract with an unnamed party to dispose of the car because it was having a series of mechanical problems. The car was found on fire by the FDNY at 6:33 p.m. on 1/29/11.
- FRAUDULENT CERTIFICATE
Arrested on 5/17/11
Charged with insurance fraud in the 3rd degree
An investigation by the Frauds Bureau resulted in the arrest of an upstate carpenter charged with insurance fraud. He submitted a Certificate of Insurance to the State Insurance Fund as proof that he had workers’ compensation insurance coverage as required by New York State law. However, the investigation revealed that the Certificate was fraudulent and no such coverage was in place. The fraud resulted in $8,000 in lost premiums to the Fund.
- SELF-EMPLOYED
Arrested on 5/12/11
Charged with insurance fraud in the 3rd degree
After reporting a work-related injury, the defendant in this case filed for workers’ compensation benefits on 6/27/04. During the benefit period, she submitted two Work Activity Reports to Pennsylvania Manufacturers Association Insurance Company stating that she was not working. However, an investigation by the Frauds Bureau and the Plattsburgh Police Department revealed that she was the owner/operator of a homemade-jewelry business. As a result of the fraud, she collected $16,253 in benefits to which she was not entitled.
- NO REPAIRS
Arrested on 5/12/11
Charged with insurance fraud and grand larceny
A Queens man was involved in an accident with his 2003 Honda CRV and he subsequently filed a $15,000 claim with GEICO Insurance Company for the loss. In support of the claim, he submitted a receipt for repair of the damage the vehicle incurred in the accident. However, evidence indicated that the receipt was fraudulent and no repair work had been done. His arrest was the result of an investigation by the Frauds Bureau and the NYPD’s Auto Crime Division.
- FIRE INTENTIONALLY SET
Arrested on 5/11/11
Charged with arson in the 3rd degree, criminal mischief in the 2nd degree, insurance fraud in the 3rd degree, arson in the 4th degree, reckless endangerment in the 2nd degree, falsely reporting an incident in the 3rd degree and false written statement
A Bronx man reported to the NYPD that his 2000 Honda Odyssey had been stolen and filed a claim with Allstate Insurance Company for the loss. However, an investigation by the Frauds Bureau and the FDNY Fire Marshals found evidence that he intentionally set fire to the car in order to collect the insurance proceeds.
- ILLEGALLY OBTAINED MEDICATIONS
Arrested on 5/11/11
Charged with health care fraud, attempt/conspiracy to possess/obtain controlled substances and providing a false statement under provisions of the U.S. Code
On 3/30/11, agents from the FBI and the IRS contacted the Frauds Bureau for assistance in a case involving health care fraud. An investigation revealed that a Rochester attorney was receiving large quantities of prescription pain killers from a local doctor, though his medical records did not support the necessity for those medications. Over a five-year period, Excellus Health Plan paid out $398,793 for the illegally obtained medications. Following a sealed federal grand jury indictment, a warrant was issued and the attorney was arrested.
- UNLICENSED PRACTICE
Arrested on 5/10/11
Charged with grand larceny and unauthorized practice of a profession
A search warrant was executed at an upstate dental clinic by the Attorney General’s Office and the State Police, resulting in the arrest of two suspects. Current and former patients reported to investigators that the suspects were working without a license and could possibly be committing insurance fraud. The patients also told investigators that the suspects regularly performed teeth cleanings, root canals and extractions. The Frauds Bureau will turn this case over to the AG’s Office for possible prosecution. In the meantime, the investigation is ongoing.
- “MUDBOGGING”
Arrested on 5/9/11
Charged with insurance fraud in the 4th degree
An investigation by the Frauds Bureau, the Plattsburgh Police Department and the State Police led to the arrest of the defendant in this case. She had reported to Nationwide Insurance Company that her car had been stolen and filed a $9,000 claim for the loss. However, investigators learned that the allegedly fraudulent claim was filed in an attempt to have Nationwide pay for damages to the vehicle’s engine incurred when the defendant was “mudbogging.” Mudbogging is a sport in which participants compete in drag racing across a mud pit.
- CORRECTION OFFICER CAUGHT
Arrested on 5/5/11
Charged with insurance fraud in the 2nd degree
A former State Correction Officer falsely reported that he was injured on the job in 2003. As a result, he fraudulently collected $106,000 in workers’ compensation benefits from the date of the purported injury until his arrest.
- HOME FIRES
Arrested on 5/5/11
Charged with insurance fraud in the 3rd degree and offering a false instrument for filing in the 1st degree
Following a fire in their home, an upstate couple filed an $11,900 claim with Foremost Insurance Company for the loss. However, an investigation by the Frauds Bureau, the State Police and the Chemung County DA’s Office uncovered evidence indicating that the couple had deliberately set the fire in an attempt to collect the insurance proceeds.
- INSURER OUT $2,000
Arrested on 5/4/11
Charged with insurance fraud in the 4th degree
An investigation by the Frauds Bureau and the Troy Police Department revealed that an upstate Licensed Practical Nurse placed a telephone call to Progressive Insurance Company at 11:00 a.m. on 12/22/10 to renew her auto insurance policy which had previously been cancelled for nonpayment of premiums. She told the insurer that there had been no losses involving her car since the policy had been cancelled and the policy was reinstated with no lapse. However, Troy PD records showed that the defendant had been involved in an accident at 10:38 a.m. on 12/22/10 and was issued a Vehicle & Traffic ticket at the scene for having no insurance coverage. As a result of the defendant’s false statement to Progressive, the insurer paid out $2,000 to the driver of the other car involved in the accident.
- TWO PAYMENTS, ONE LOSS
Arrested on 5/2/11
Charged with insurance fraud in the 4th degree and grand larceny in the 4th degree
The defendant in this case was accused of collecting two insurance payments for the same loss. He was involved in an accident with a Laidlaw Company bus in Buffalo and was reimbursed $3,214 by the bus company’s insurer. However, an investigation by the Frauds Bureau, the Buffalo Police Department and the State Police revealed that he then filed a claim with his own insurer, New York Central Mutual, and received a $2,611 payout.
- STING OPERATION NETS “RUNNER”
Arrested on 5/2/11
Charged with computer trespass
As a result of an undercover sting operation conducted by the Frauds Bureau and the Suffolk County Insurance Crime Bureau, a known “runner” was arrested and charged with computer trespass. The defendant allegedly paid two employees at a hospital in Bay Shore, Long Island, for patient file information. He then contacted the patients and steered them to specific attorneys and medical clinics in an insurance fraud scheme. The two hospital employees were arrested on 2/28/11 and also charged with computer trespass.
- PRIOR SUPPLEMENT
April 2011
- GUILTY PLEA
On 4/29/11, Ryan McKinley pleaded guilty to identity theft in the 2nd degree to resolve criminal charges that were pending against him, including insurance fraud in the 3rd degree. An investigation by the Frauds Bureau resulted in his arrest on 3/25/11 on a charge of filing a fraudulent auto damage claim with GEICO Insurance Company. The claim included a receipt indicating that he had paid for glass repair to his car. However, investigators discovered that the receipt was forged. Moreover, he changed the amount charged for the purported repairs from $500 to more than $3,000. When GEICO requested an insurance inspection report to ensure the repairs had been completed before paying the claim, the defendant faxed what investigators believed to be a forged CARCO report.
