Arrests for April 2012
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 1-888-372-8369
CAUGHT!
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- SENTENCED
Two former insurance agents who pleaded guilty to swindling 11 elderly clients by changing beneficiary information on annuity contracts were sentenced on 4/25/12 to jail time and restitution. Cynthia Gibbons, also known as Cynthia Bulinski, received 1-to-3 years in prison. Her co-defendant, Kellie Will, received 30 days in jail and five years’ probation. In addition, Bulinski has paid $199,000 in restitution. Will has paid $98,000 and will pay $500 a month until she repays the $100,000 in restitution still owed. As an investment advisor, Bulinski encouraged these elderly clients to take money from their investments and buy annuities. Bulinski earned commissions on the sales and then, without the knowledge of the clients, named Will as beneficiary. Three of the 11 victims have died, allowing Will to collect approximately $400,000 in death benefits. The remaining eight have been made aware of the scheme and the insurers underwriting the annuities have removed Will as a beneficiary on the outstanding annuities. Had this fraud not been discovered, Will stood to collect approximately $2 million in additional death benefits. Both women were arrested on 12/13/11. Bulinski pleaded guilty to felony grand larceny and both she and Will pleaded guilty to felony scheme to defraud. Both Bulinski and Will had been licensed as insurance agents by the Department. Bulinski’s license was revoked in December 2011; Will’s license expired in 1997.
- FINANCIAL FRAUD
Arrested on 4/18/12
Charged with grand larceny in the 3rd degree and falsifying business records in the 2nd degree
An investigation conducted jointly by the Insurance Frauds Bureau and the Gloversville Police Department with the assistance of the Fulton County DA’s Office led to the arrest of a woman involved in a financial fraud scheme. When she was advised by the Board of Directors of a nonprofit agency at which she was director that the agency would no longer be able to pay her for her services, she allegedly began to embezzle money. The investigation uncovered evidence that between April 2009 and June 2011, she embezzled more than $40,000 from the agency.
- DRUG DIVERSION
Arrested on 4/17/12
Charged with conspiracy to distribute controlled substances
An ongoing drug diversion investigation being conducted by the Insurance Frauds Bureau and the Department of Health and Human Services’ Office of the Inspector General revealed that two suspects, previously arrested, were involved in stealing/filling prescriptions for controlled substances. Further investigation showed that many of these prescriptions were being filled at one particular pharmacy and evidence was developed documenting the pharmacy owner’s willful knowledge of the scheme. A search warrant was executed at the pharmacy on 4/17/12 and the defendant was arrested.
- MEDICAID FRAUD
Arrested on 4/13/12
Charged with identify theft in the 2nd degree, criminal possession of a forged instrument in the 2nd degree and falsifying business records in the 1st degree
On 9/27/11, the defendant in this case arrived at a doctor’s office to have a medical procedure performed. She presented a Medicaid Benefit ID card and completed the necessary forms providing patient medical history and other information. However, during the visit, a nurse noticed a discrepancy in the medical chart and questioned the defendant who then admitted she was using the ID card and personal information of another person. She was denied services and left the office. On 3/20/12, investigators interviewed the defendant who admitted that she had used the ID card of another person to seek medical treatment. On 3/23/12 and 4/4/12, investigators interviewed the owner of the ID card who submitted statements reporting that she had not authorized the defendant to use her ID card. This case was referred by the Office of the Medicaid Inspector General and was investigated jointly by the Insurance Frauds Bureau and the Brighton Police Department.
- WORKERS’ COMP FRAUD
Arrested on 4/13/12
Charged with violation of Section 114 of the Workers’ Compensation Law
An Albany woman reported a work-related injury in the summer of 2010 and began collecting workers’ compensation benefits. During the benefit period, she filed numerous Work Activity Reports with the State Insurance Fund stating that she was not working. However, an investigation by the Insurance Frauds Bureau and the State Fund revealed that she was in fact employed while collecting benefits to which she was not entitled.
- FALSE REPORT
Arrested on 4/12/12
Charged with insurance fraud in the 3rd degree
A Monroe County resident reported to Liberty Mutual Insurance Company that his 2011 Mustang had been stolen, that he had subsequently recovered it and was then involved in an accident while driving it. He filed a $10,639 claim for the loss. However, an investigation by the Insurance Frauds Bureau, the Rochester and Webster Police Departments and the Monroe County DA’s Office as members of the Monroe County Auto Crime Task Force revealed that he had lent the car out to repay a drug debt and the person to whom he had lent it was actually driving when the accident occurred. When interviewed, the suspect admitted that he had falsely reported the car stolen and fabricated the rest of the story in order to collect the insurance payout.
- FRAUDULENT WITHDRAWAL
Arrested on 4/11/12
Charged with mail and wire fraud
An investigation by the Insurance Frauds Bureau and the U.S. Attorney’s Office resulted in the arrest of the defendant in this case for allegedly submitting 14 forged Variable Annuity Surrender Request forms in the name of his deceased grandmother in order to withdraw $37,175 from her annuity account. He had the money electronically transferred to his Internet bank account where he could easily make withdrawals. When interviewed during the investigation, the defendant admitted the fraud, stating that he did it in order to pay for his drug habit.
- TASK FORCE SUCCESS
Arrested on 4/11/12
Charged with criminal sale of a controlled substance in the 4th degree
An investigation by the Albany-based Drug Enforcement Administration Tactical Diversion Task Force, of which the Insurance Frauds Bureau is a member, resulted in the arrest of a suspect charged with criminal sale of a controlled substance. The Task Force investigates organized drug diversion schemes, “doctor shopping” and forgery of controlled substance prescriptions.
- 20th DEFENDANT CAUGHT
Arrested on 4/10/12
Charged with criminal possession of a forged instrument in the 2nd degree
An additional suspect was arrested in an ongoing investigation into a check-cashing, counterfeiting scheme at a Schenectady location of a super market chain operating in upstate New York, bringing the total to 20 suspects arrested so far. This investigation is being conducted by the Schenectady Police Department and the Secret Service with the assistance of the Insurance Frauds Bureau.
- PAID TWICE
Arrested on 4/6/12
Charged with grand larceny in the 4th degree
Following an auto accident on 10/3/11, a Wayne County woman filed a claim with her insurer, Erie Insurance Company, for the damage to her car. Erie issued a $1,585 check and the defendant cashed it. Erie later learned that the insurer for the driver of the other car involved in the accident had determined that their driver was a fault and had also issued a check to the defendant. Erie requested that she return the $1,585 it had paid out but she failed to do so. The Insurance Frauds Bureau collaborated with the State Police in the investigation that led to her arrest.
- ANOTHER TASK FORCE SUCCESS
Arrested on 4/6/12
Charged with criminal sale of a controlled substance in the 3rd and 4th degrees and criminal possession of a forged instrument in the 2nd degree
An investigation by the Albany-based Drug Enforcement Administration Tactical Diversion Task Force, of which the Insurance Frauds Bureau is a member, led to the arrest of three suspects, two of whom were charged with criminal sale of a controlled substance and the third with criminal possession of a forged instrument. The Task Force investigates organized drug diversion schemes, “doctor shopping” and forgery of controlled substance prescriptions.
- DEFALCATION SCHEME
Arrested on 4/4/12
Charged with grand larceny in the 2nd degree
The chairman and the office manager of an abstract company on Long Island were arrested and charged with participation in a defalcation scheme involving several title insurance companies. An investigation by the Suffolk County DA’s Office with the assistance of the Insurance Frauds Bureau led to the arrests.
- OFF THE BOOKS
Arrested on 4/3/12
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd degree, offering a false instrument for filing in the 1st degree and violation of the Workers’ Compensation Law
Following a work-related injury, an Erie County man began collecting workers’ compensation benefits. During the benefit period, he submitted four Work Activity Reports to the State Insurance Fund stating that he was unable to work. On 1/23/12, the Insurance Frauds Bureau received a complaint from the Fund, reporting their suspicions that the defendant was actually employed. Investigators conducted surveillance that showed him working as a mechanic at an auto shop in Buffalo. Further investigation revealed that he was working “off the books” while fraudulently collecting $3,825 in benefits.
- PRIOR SUPPLEMENTS
March 2012
- CAR SCRAPPED
Arrested on 3/27/12
Charged with insurance fraud
The defendant in this case reported to the NYPD and Liberty Mutual Insurance Company that her 1999 Kia had been stolen. However, an investigation by the Insurance Frauds Bureau and the NYPD’s Auto Crime Division revealed that she had brought the car to a repair shop with a seized engine. The shop owner told investigators that she advised him to junk the car and gave him the required documents to get the task done. Subsequently, the NYPD located the scrapped car in a junk yard while conducting a routine computer check of unrecovered vehicles. Through further investigation, the person who had scrapped the car was located and that led investigators to the suspect.
