Arrests for August 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!
*********************************************
- SENTENCED
Ghulam Mustafa, an Orleans County pediatrician, was sentenced on 8/29/11 to five years’ probation, 200 hours of community service and was ordered to pay $260,877 in restitution ($81,544 to insurers and $179,333 to Medicaid). He had pleaded guilty on 3/14/11 to grand larceny. He received free vaccines that were supposed to be dispensed to Medicaid patients. However, he used the vaccines for non-Medicaid patients and billed their private insurers. The investigation was conducted by the Western New York Health Care Fraud Task Force of which the Frauds Bureau is a member.
After pleading guilty to violation of the Workers’ Compensation Law on 8/5/11, Gregory Wild of Ontario County was sentenced on 8/26/11 to three years’ probation and ordered to pay Erie Insurance Company $8,804 in restitution. He began collecting benefits following a job-related injury. 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 providing the same information. However, surveillance observed him traveling to numerous locations carrying paint supplies. Moreover, the payroll records of a local painting company showed that he was employed there from 6/4/10 to 11/12/10 while fraudulently collecting benefits. The Frauds Bureau and the State Police conducted the investigation that led to his arrest.
- NO MORE PAYMENTS
Arrested on 8/31/11
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
The defendant in this case reported to the Syracuse Police Department that his 2002 Mazda was damaged while parked in front of his home on 3/15/11. He subsequently filed a claim and after inspecting the car and determining it was a total loss, Progressive Insurance Company paid out $3,294. However, when interviewed during an investigation by the Frauds Bureau and Progressive’s SIU, the defendant admitted that he arranged for another person known to him to damage the car so he would not have to continue making the payments.
- RETURNED TO WORK
Arrested on 8/30/11
Charged with insurance fraud
A data clerk at a White Plains Hospital began collecting disability benefits following an injury to her ankle. During the benefit period from 3/5/10 to 4/25/10, she received periodic questionnaires from Unum Insurance Company inquiring about her work status. The suspect responded to the questionnaires stating that she had not returned to work. However, Frauds Bureau investigators discovered that she had in fact returned to her job while fraudulently collecting more than $7,000 in benefits.
- PRESCRIPTION DRUG DIVERSION
Arrested on 8/25/11
Charged with health care fraud
An investigation by the Frauds Bureau and the U.S. Department of Health and Human Services Office of the Inspector General uncovered evidence that two men and a woman were involved in a scheme to steal blank prescriptions, write them out for controlled substances (i.e. oxycodone), and have them filled. On 8/25/11, search warrants were executed at two residences in the Bronx and evidence was seized that supported the investigation’s findings. Two residents of the search locations were arrested for allegedly running a fraudulent prescription ring out of their homes. The third suspect is scheduled to surrender in early September. This investigation is ongoing.
- STOLEN PREMIUMS
Arrested on 8/24/11
Charged with grand larceny in the 3rd degree and falsifying business records in the 1st degree
An investigation by the Frauds Bureau and the State Police resulted in the arrest of a New York-licensed insurance broker. Evidence was uncovered that indicated she stole $16,620 in cash premium payments while employed at an insurance agency in Saugerties, NY. The suspect also allegedly used the agency’s accounting software to make false entries into its business records in order to conceal the theft.
- FALSE CLAIM
Arrested on 8/22/11
Charged with insurance fraud and grand larceny
The defendant in this case reported to Allstate Insurance Company that his 2007 Chevy Tahoe had been broken into, the radio stolen and the tires slashed. He subsequently filed a claim for more than $3,000 in reimbursement for the loss. However, investigators learned that the car was never broken into and the claim was fraudulent. His arrest was the result of an investigation conducted jointly by the Frauds Bureau and the NYPD’s Auto Crime Division.
- NO SALE
Arrested on 8/20/11
Charged with insurance fraud in the 5th degree, falsifying business records in the 1st degree and making a punishable false written statement
In a case involving homeowners insurance fraud, an upstate man reported that his home had been burglarized and filed a claim with Nationwide Insurance Company. He listed various items that were stolen, including a DVD player valued at $996. In support of the claim, he submitted a receipt for the purchase of the DVD player. However, when the purported vendor was interviewed during the course of the investigation, he stated that the receipt was altered and the DVD player had not been sold to the defendant. The Frauds Bureau and the State Police pooled resources in this investigation.
- NOT ENTITLED
Arrested on 8/18/11
Charged with grand larceny in the 3rd degree, insurance fraud in the 3rd degree and falsifying business records in the 1st degree
The suspect in this case began collecting workers’ compensation benefits following a job-related shoulder injury. However, an investigation revealed that while claiming to be unable to work, she was employed as a hairstylist earning more than $53,000 during the benefit period. As a result of the fraud, she collected $7,500 in benefits to which she was not entitled.
- NO COVERAGE
Arrested on 8/18/11
Charged with violation of Section 52 of the Workers’ Compensation Law
An investigation conducted by the Frauds Bureau uncovered evidence that this defendant had failed to maintain New York State-required workers’ compensation coverage for the employees at a roofing company he owned.
- SAME OLD TRANSMISSION
Arrested on 8/17/11
Charged with insurance fraud in the 4th degree and falsifying business records in the 1st degree
The owner of a used-car dealership filed a claim with Erie Insurance Company and included a $2,628 receipt for a new transmission for one of the dealership cars. However, an investigation by the Frauds Bureau revealed that the transmission had not been replaced and the receipt was fraudulent.
- NOT THE OWNERS
Arrested on 8/12/11
Charged with insurance fraud in the 3rd degree and grand larceny in the 3rd degree
Two suspects were arrested for submitting allegedly fraudulent documents to Erie Insurance Company as proof of ownership of two vehicles that were destroyed in a fire on 1/8/11 in a commercial garage owned by one of the suspects. One suspect claimed to be the owner of a 1999 Cadillac and was paid $3,562. The other claimed to be the owner of a 1985 Mustang and was paid $3,420. The arrests were the result of an investigation by the Frauds Bureau.
- AT WORK
Arrested on 8/10/11
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
The defendant in this case began collecting lost-wage benefits after reporting three separate injuries to the State Insurance Fund stemming from her employment at Central New York Developmental Disabilities Services Office. During the benefit period from 7/10/08 to 8/2/11, she submitted numerous Work Activity Reports stating that her injuries left her unable to work. However, an investigation by the Frauds Bureau, the State Insurance Fund and the Workers’ Compensation Board’s Office of the Fraud Inspector General found evidence that she was employed as a home health aide while fraudulently collecting $48,982 in benefits.
- DISABILITY IS TEMPORARY
Arrested on 8/5/11
Charged with violation of Section 114.1 of the Workers’ Compensation Law, perjury in the 1st degree, offering a false instrument for filing in the 1st degree and falsifying business records in the 1st degree
A Monticello, NY, resident began collecting workers’ compensation benefits after a job-related injury resulted in a diagnosis of a 75 percent temporary partial disability. During the benefit period, he testified under oath at a Workers’ Compensation Board hearing that he was not working in any capacity. However, evidence discovered during an investigation by the Frauds Bureau and the Workers’ Compensation Board indicated that he was employed as a mechanic and driver at a local business. As a result of the fraud, he collected $20,000 in benefits to which he was not entitled.
- “DISABLED” STOCK CAR DRIVER
Arrested on 8/4/11
Charged with perjury in the 1st degree
A Westchester man was involved in an auto accident and sued Kemper Insurance Company under the underinsured motorist provision of his auto policy. When the parties could not agree on a settlement, the case went to arbitration. On 6/30/10, the defendant testified at the arbitration hearing that he was disabled as a result of the accident and could no longer work as a truck driver or do many of the normal activities of daily living. Under cross examination, he testified that he owned a stock car and when further questioned about a stock car race on 6/29/10, he stated that the driver of his stock car on 6/29 was a friend who was similar to him in appearance. However, an investigation by the Frauds Bureau and the State Police uncovered evidence that the defendant was actually the driver in the 6/29 race.
- PAID TWICE
Arrested on 8/4/11
Charged with grand larceny in the 3rd degree
As a result of a warrant issued by the Rockland County DA’s Office, the suspect in this case was arrested for claiming that he had not received a $10,455 workers’ compensation settlement check issued by CNA Insurance Company. The insurer issued a second check for the same amount. The suspect intentionally cashed the original check at a check-cashing facility knowing there was a stop payment on it and cashed the replacement check at his bank. Because of the stop payment, CNA did not cover the original check, leaving the check-cashing facility on the hook for the money. When interviewed during an investigation by the Frauds Bureau and CNA’s SIU, the suspect admitted to cashing both checks, stating that he felt he deserved them.
- TORCHED CAR
Arrested on 8/3/11
Charged with insurance fraud in the 3rd degree
An investigation by the Frauds Bureau, Allstate Insurance Company’s SIU and the Rochester Police Department led to the arrest of an upstate woman for attempting to defraud her insurer. On 5/8/11, she reported to the Rochester PD and Allstate that her 2004 Nissan Quest had been stolen from her residence. She submitted an Affidavit of Theft stating that the car was in excellent condition with no mechanical problems. Based on that information and the current value of similar vehicles, Allstate valued the car at $9,050. However, investigators learned that the car had been towed on numerous occasions. Towing records showed that the car had been taken to several auto repair shops. Investigators interviewed owners and managers of the repair shops who reported that the car had major mechanical problems that had not been repaired. The owner of one of the shops stated that when he told the suspect’s husband that the car could not be repaired, the husband asked him to “torch” the car. The car was recovered burned by the Rochester PD. The fire was determined to be arson by the Fire Department’s Investigation Unit.
- FRAUDULENT RECEIPTS
Arrested on 8/1/11
Charged with insurance fraud in the 4th degree, grand larceny in the 4th degree and offering a false instrument for filing in the 2nd degree
The defendant in this case filed a claim with Assurant Insurance Company after a fire at his home. The insurer issued a check for $25,000 for contents lost in the fire. The defendant was a suspect in the fire but the Buffalo Fire Marshals were unable to prove their arson case against him. However, during an investigation by the Buffalo Fire Marshals and the Frauds Bureau, evidence was uncovered that several of the receipts submitted by the defendant for the items purportedly lost in the fire were fraudulent.
- FALSE REPORT
Arrested on 8/1/11
Charged with insurance fraud in the 3rd degree and falsifying business records in the 1st degree
An upstate man reported to the Rotterdam Police Department that his truck had been stolen and he filed a claim with State Farm Insurance Company for the loss. However, an investigation by the Frauds Bureau and the Rotterdam PD revealed that he had been involved in an accident while driving the vehicle. He abandoned it and fled the scene.
- PRIOR SUPPLEMENTS
June 2011
- SENTENCED
John P. Mondello, an insurance broker from Long Island, was sentenced on 6/23/11 to one year in prison and ordered to pay $585,376 in restitution after his conviction on a charge of grand larceny on 11/22/10. While acting as a financial adviser for an elderly Queens woman from January 2007 to June 2009, he diverted portions of the victim’s funds to himself, received cash from her through confusion and deceit and liquidated accounts in order to collect commissions on the transfer of those accounts. Mondello was arrested on 10/29/09 following an investigation by the Frauds Bureau and the Nassau County Police Department.
