Arrests for June 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
Kelly Woods, an upstate woman who had relocated to Utah, was sentenced on 6/23/11 to 1-to-3 years in prison and ordered to pay $42,000 in restitution to the State Insurance Fund. She was extradited and arrested on 3/23/11 for faking a work injury in order to collect workers’ compensation benefits. She pleaded guilty to insurance fraud on 4/28/11. On numerous occasions between 7/08 and 11/10, she reported that she suffered from permanent fixed torticollis, a condition that kept her head at a 90-degree angle at all times. However, she was observed on video moving her head and neck freely. As a result of the fraud, she collected $42,000 in benefits to which she was not entitled. She also signed a Workers’ Compensation Agreement waiving future claims to benefits, thereby freeing up nearly $600,000 in reserves that the State Insurance Fund had put aside for her fraudulent claim. The Frauds Bureau, the State Fund and the Workers’ Compensation Board pooled resources in the investigation that led to her arrest.
A Syracuse carpenter, Paul J. Keyes, who was originally charged with insurance fraud, violation of the Workers’ Compensation Law and offering a false instrument for filing at his arrest on 12/21/10, pleaded guilty to a lesser charge of disorderly conduct on 6/21/11 in satisfaction of all charges. An investigation revealed that from 2006 to 2010 he underreported the number of employees on his payroll as well as his income in order to reduce his workers’ comp premiums. As a result, he underpaid the State Insurance Fund by $31,744. He was sentenced to one year conditional discharge and was ordered to pay the State Fund the full $31,744 in restitution. The investigation that led to his arrest was a joint effort by the Frauds Bureau, the State Fund, the Workers’ Compensation Board’s Office of the Fraud Inspector General and the State Police.
- NOT ENTITLED
Arrested on 6/22/11
Charged with insurance fraud in the 4th degree
Following an injury sustained on the job, the defendant in this case began collecting workers’ compensation benefits. On several occasions during the benefit period, she submitted statements to Travelers Insurance Company reporting that she had not returned to work since the date of her injury. However, an investigation by the Frauds Bureau found evidence that she was employed at a diagnostic lab in Brooklyn while fraudulently collecting $6,224 in benefits.
- NOT COVERED
Arrested on 6/22/11
Charged with grand larceny in the 3rd degree, falsifying business records in the 1st degree and violation of Section 114 of the Workers’ Compensation Law
The upstate owner of a custom design company submitted an ACORD Certificate of Insurance to the City of Rochester stating that she had the required workers’ compensation insurance coverage for home rehabilitation work being performed for the City. However, when the suspect met with investigators on 8/3/10, she admitted submitting the ACORD Certificate but claimed she was unaware that she had no coverage. She told investigators that there was a mix up with her insurance agent, MGM Insurance. She reported that she used Paychex Payroll Services for her payroll and they took care of her insurance premiums. A review of the records of MGM Insurance and Paychex discredited her story. Her fraudulent actions caused the City of Rochester to pay $4,680 in premiums to the State Insurance Fund for the work performed by her company. A joint investigation by the Frauds Bureau, the Rochester Police Department, the State Insurance Fund and the Workers’ Compensation Board’s Office of the Fraud Inspector General led to her arrest.
- NO-FAULT FRAUD
Arrested on 6/18/11
Charged with insurance fraud in the 4th degree, grand larceny in the 4th degree and falsifying business records in the 1st degree
After being injured in an auto accident on 2/26/10, a Lockport man filed for lost-wage benefits under his no-fault insurance coverage. He claimed that as a result of the injury, he could not fulfill his obligations to honor existing snow-plowing contracts. He reported that he paid another person to do the snow-plowing work for him. However, an investigation found evidence that indicated that the $5.366 in receipts and invoices he submitted to Esurance in support of his claim were forged. When the person who took over the suspect’s plowing jobs was interviewed, he reported that the suspect had paid him a total of about $300. He said that he had created the receipts and invoices as a favor to the suspect but had left the dates and cash amounts blank. The suspect was arrested for committing no-fault fraud by fraudulently collecting lost-wage benefits.
- ENHANCED DAMAGES
Arrested on 6/17/11
Charged with insurance fraud in the 3rd degree and grand larceny in the 3rd degree
An investigation by the Frauds Bureau and the NYPD’s Auto Crime Division resulted in the arrest of a tow-truck driver for enhancing damages to the car of a GEICO Insurance Company insured. The insured was involved in an accident and had to be towed off the highway. With agreement from the insured, the tow-truck driver took the car to his own body shop. The car was repaired and a $4,338 claim was filed with GEICO. The insurer issued a check that was subsequently cashed by the defendant. Fortunately, the insured had taken pictures at the scene of the accident that showed far less damage to his vehicle than the defendant had billed GEICO for.
- CAUGHT TWICE
Arrested on 6/16/11
Charged with violation of Section 114.1 of the Workers’ Compensation Law
The defendant in this case began collecting workers’ compensation benefits following a work-related injury. On 4/2/11 and 5/12/11, he submitted Work Activity Reports to the State Insurance Fund stating that he had not returned to work in any capacity. However, an investigation by the Frauds Bureau, the State Insurance Fund, the Workers’ Compensation Board’s Office of the Fraud Inspector General, the State Police, the Monroe County Sheriff’s Office and the Fairport Police Department revealed that he had earned unreported income for exchanging copper wire he had stolen for cash at numerous local recycling facilities. One of those facilities was the employer of record for his workers’ compensation claim. As a result of the fraud, he collected $813 in benefits from the State Insurance Fund to which he was not entitled. At the time of the arrest, the defendant was in Monroe County Jail charged with burglary in the 3rd degree for the theft of the copper wire he had sold and criminal possession of stolen property in the 2nd degree.
- FRAUDULENT DISABILITY CLAIM
Arrested on 6/16/11
Charged with insurance fraud in the 4th degree and violation of Section 114 of the Workers’ Compensation Law
The defendant in this case submitted a claimant’s disability statement to OneBeacon Insurance Company stating that a job-related injury prevented him from working. However, surveillance conducted during an investigation by the Frauds Bureau observed him working as a handyman while collecting $2,847 in benefits to which he was not entitled.
- IMPERSONATING A FRAUDS INVESTIGATOR
Arrested on 6/15/11
Charged with criminal impersonation in the 2nd degree
On 2/25/11, an upstate chiropractor accompanied his patient to an independent medical examination conducted to determine whether the patient was eligible for surgery. When the exam was completed, the chiropractor, posing as an Insurance Department Frauds Bureau investigator, displayed the business card of an authentic Frauds Bureau investigator and threatened the examining chiropractor with arrest if he did not authorize the surgery. During an investigation by the Frauds Bureau, the chiropractor admitted that he had misrepresented himself and gave a signed confession.
- FRAUDULENT BILLING
Arrested on 6/15/11
Charged with insurance fraud in the 2nd degree
A Yonkers medical billing clerk was employed in the office of a doctor who also treated her as a patient. During an investigation conducted by the Frauds Bureau, investigators learned that between 1/7/08 and 4/30/08, she submitted 20 claims totaling $52,200 for services that were not provided to her and for visits that never took place. As a result, Nippon Life Insurance Company paid out $28,326 on the fraudulent claims.
- 16 NABBED IN NO-FAULT SCAM
Arrested on 6/13/11
Charged with grand larceny in the 3rd degree, money laundering and scheme to defraud
Sixteen individuals were arrested in connection with a systematic scheme to steal hundreds of thousands of dollars from five insurance companies: Allstate, GEICO, GMAC, Liberty Mutual and Progressive. Additional arrests are expected in this continuing investigation. Evidence was uncovered indicating that the defendants submitted more than 100 fraudulent claims for vehicles allegedly involved in phantom accidents, costing the insurance companies almost $300,000 in payments for property damage claims in the Bronx. The ringleader of the scheme allegedly recruited most of the other defendants to file fraudulent claims, cash the checks issued by the insurers and turn over most of the proceeds to the ringleader, who pocketed more than $100,000. He allegedly allowed them to keep between $50 and $400 for each claim. It is alleged that in each case, an individual would pose as an actual customer of one of the insurance companies and ask to have an additional vehicle added to an existing policy. Once coverage was extended to the additional vehicle, a defendant would call the insurance carrier and report that the vehicle had been involved in an accident causing damage to another car. A defendant, purporting to be the owner of the allegedly damaged car, would then place a call to the insurance carrier and arrange to have the damage inspected, appraised and photographed by an insurance adjuster. Once the adjuster completed the inspection and appraisal, the insurance company would issue a check payable to the individual filing the claim. All of the defendants have been charged with grand larceny. Some also face charges of money laundering and scheme to defraud. The arrests were the result of an investigation by the National Insurance Crime Bureau, the Bronx DA’s Office, the Frauds Bureau and the insurers that were victimized.
- FLED THE SCENE
Arrested on 6/13/11
Charged with insurance fraud in the 3rd degree and falsely reporting an incident
On 9/23/10, the defendant in this case reported to the Jamestown Police Department that his car had been stolen and filed a $5,333 claim with Merchants Insurance Company for the loss. However, an investigation by the Frauds Bureau found evidence that he had been involved in a property-damage-only accident while driving the car and fled the scene. Merchants denied the claim.
- COMMISSIONS NOT DUE
Arrested on 6/10/11
Charged with grand larceny in the 3rd degree
An investigation by the Frauds Bureau resulted in the arrest of a former New York State-licensed insurance agent. He formed three allegedly bogus business groups and then submitted 35 applications for supplemental hospital insurance policies for 19 applicants through Aflac Insurance Company. However, the investigation found evidence that the policies were written for persons who were either fictitious or were unaware that the policies existed. His actions allowed him to fraudulently collect $4,768 in advanced commissions from Aflac.
- PHOTOS SHOW “UNENHANCED” DAMAGES
Arrested on 6/10/11
Charged with insurance fraud in the 3rd degree and grand larceny in the 3rd degree
The owner of an auto body shop was charged with enhancing damages to the car of a GEICO Insurance Company policyholder in order to inflate the claim. He submitted allegedly fraudulent bills for $3,000 for repair of the policyholder’s car. However, during an investigation by the Frauds Bureau and the NYPD’s Auto Crime Division, the policyholder produced photos of the car he had taken at the scene showing the original “unenhanced” damages.
- RISKY BUSINESS
Arrested on 6/9/11
Charged with offering a false instrument for filing in the 1st degree, insurance fraud in the 2nd degree, grand larceny in the 2nd degree, falsifying business records in the 1st degree and violation of the Workers’ Compensation Law
The treasurer of a demolition and excavation contracting company under contract with the City of Rochester, demolished dozens of homes that contained asbestos. However, she allegedly provided false information about the nature of her business in order to pay the State Insurance Fund a reduced premium for workers’ compensation insurance coverage. As a result of her actions, she defrauded the State Fund of $75,767 in premiums she rightfully owed. The Frauds Bureau, the State Fund and the Workers’ Compensation Board’s Office of the Fraud Inspector General assisted the Rochester Police Department and the Monroe County DA’s Office in the investigation that led to her arrest.
- FACTORY BOSS CHEATS
Arrested on 6/9/11
Charged with insurance fraud in the 2nd degree and falsifying business records in the 1st degree
An Ardsley man filed a claim for disability benefits in 2002 and was approved to collect $2,600 a month. However, an investigation by the Frauds Bureau uncovered corporate filings, and mortgage and bankruptcy records indicating that he became managing director and stockholder of a New Jersey recycling factory in January 2009 and was an active participant in the business. As a result of the fraud, he collected more than $58,000 in benefits while operating the recycling factory.
- INSURED TOO LATE
Arrested on 6/9/11
Charged with insurance fraud in the 3rd degree
A Warren County woman reported to Progressive Insurance Company that she had been in an accident while driving her 2004 Ski Doo snowmobile. She subsequently filed a $3,060 claim for damage caused to the snowmobile in the accident. However, during an investigation by the Frauds Bureau, investigators learned that the vehicle was uninsured at the time of the accident. She in fact gave false information concerning the date of the accident and had actually purchased the insurance coverage after the accident occurred.
- MINOR DRIVER BEHIND THE WHEEL
Arrested on 6/1/11
Charged with reckless endangerment and falsely reporting an incident
The defendant in this case reported to Nationwide Insurance Company that he was in an accident while driving his car and filed a claim for the damages. However, an investigation by the Frauds Bureau and the State Police revealed that the defendant’s minor son was driving the car when the accident occurred, with the defendant’s full knowledge and consent.
- ALTERED CERTIFICATE
Arrested on 6/1/11
Charged with criminal possession of a forged instrument in the 2nd degree
An Albany contractor 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, investigators from the Frauds Bureau discovered that he had altered an outdated Certificate in order to obtain work as a subcontractor. In fact, no coverage was in place.
- PRIOR SUPPLEMENTS
May 2011
- SENTENCED
An investigation by the Frauds Bureau and the Workers’ Compensation Board’s Office of the Fraud Inspector General revealed that on 2/27/08, while employed as a construction worker, Clinton County resident Neal Ahrent reported an injury and began collecting workers’ compensation benefits. During the benefit period, Ahrent submitted ten Work Activity Reports to the State Insurance Fund stating that he was not working. However, investigators learned that he was selling oxycodone and on 10/10/10, he was sentenced to one year in the Clinton County jail after pleading guilty to two counts of criminal sale of a controlled substance in the 4th degree. Further investigation indicated that Ahrent had fraudulently collected $15,252 in workers’ compensation benefits while earning money from the illegal sale of the oxycodone. On 5/26/11, while still incarcerated, he was arrested and charged with insurance fraud in the 3rd degree.
- FORGED CERTIFICATES
Arrested on 5/24/11
Charged with forgery in the 1st degree and falsifying business records in the 2nd degree
An investigation by the Frauds Bureau and the Workers’ Compensation Board’s Office of the Fraud Inspector General resulted in the arrest of an upstate subcontractor who submitted two Certificates of Insurance to the State Insurance Fund as proof that he had workers’ compensation insurance coverage as required by New York State law. However, investigators found evidence that the Certificates were fraudulent and no coverage existed. As a result, the local contractor with whom he had an agreement to perform work was held responsible to pay the State Fund $1,386 in additional premiums.
