Arrests for June 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
Michael Mall, the former owner of an Albany pub, was sentenced on 6/19/12 to 1 ½ to 3 ½ years in state prison following his 3/23/12 arson conviction for deliberately setting a fire at the pub on 4/15/11. In addition, he was ordered to pay $11,296.96 in restitution to Alterra Insurance Company. An investigation by the Insurance Frauds Bureau, the Albany Police Department and the New York State Office of Fire Prevention and Control revealed that he and another person were seen removing multiple items from the property the night before the fire. On the night of the fire, he was the only person in the pub, which had closed for the night. He reported that a grease fire started in the kitchen. However, the investigation exposed multiple points of origin in the kitchen area where accelerants were detected and the fire was deemed incendiary. The pub was insured for $900,000 through Alterra.
- STAGED ACCIDENT
Arrested on 6/27/12
Charged with insurance fraud in the 3rd degree, falsifying business records in the 1st degree and falsely reporting an incident
An investigation conducted by the Insurance Frauds Bureau and the State Police revealed that on 4/30/12, the defendant in this case had been drinking and driving. He subsequently lost control of his car and struck several mail boxes. The car sustained front-end damage and the airbags deployed. He called a friend who towed the car to his garage and the defendant got a ride home. Evidence indicates that on 5/2/12, in an attempt to have the repair work covered by his auto insurance, he drove the car to an isolated location, pushed it into a ditch and called the State Police. He told the troopers that in an effort to avoid hitting a deer, he swerved the car and rolled into the ditch, causing the airbags to deploy. The troopers wrote up an accident report and the defendant filed a $7,796 claim with Progressive Insurance Company. However, when investigators interviewed the defendant and began questioning him about the accident, he withdrew the claim and requested an attorney.
- UNEARNED COMMISSIONS
Arrested on 6/21/12
Charged with falsifying business records in the 1st degree
An investigation by the Insurance Frauds Bureau led to the arrest of a saleswoman for Oxford Health Care for her participation in a scheme to fraudulently obtain sales commissions. Investigators learned that during 2008 and 2009, the defendant filed claims for sales commissions by falsely stating that she had sold certain Oxford products when, in fact, those products had been sold by one of her co-workers. She was able to carry out this scheme by gaining access to a restricted Oxford database that provided detailed information about each salesperson’s monthly sales. She used this information to file the false claims and over the two year period collected $24,053 in commissions to which she was not entitled.
- HOMEOWNERS FRAUD
Arrested on 6/21/12
Charged with four counts each of insurance fraud in the 3rd degree and grand larceny in the 3rd degree
An investigation conducted by the Insurance Frauds Bureau resulted in the arrest of an upstate man for his role in a homeowners insurance fraud scheme. He was accused of filing four allegedly fraudulent claims with Allstate Insurance Company for purported water, sewage and roof damage to his home. Allstate paid out $19,130 on the false claims.
- MONEY LAUNDERING
Arrested on 6/14/12
Charged with scheme to violate the Bank Secrecy Act, causing false filing of currency transaction reports, causing failure of a business to have an effective anti-money laundering program and conspiring to commit tax violations
Three individuals and a check-cashing business were charged in the Eastern District of New York for their alleged roles in a money-laundering scheme that violated the Bank Secrecy Act (BSA). The defendants allegedly failed to follow reporting and anti-money laundering requirements for transactions. According to the indictment, a check-cashing store in Flushing, NY; its owner; and two other persons were charged with using the store to file false currency transactions reports (CTRs). The store’s owner allegedly caused the business to fail to have an effective anti-money laundering (AML) program. In addition, he was charged with conspiring to commit tax violations with respect to the fees the store received in connection with the scheme. As part of the scheme, which lasted from June 2009 through June 2011, the other two defendants presented to the store’s manager and other employees checks to be cashed at the store. The checks were written on accounts of shell corporations that appeared to be health-care related but in fact did no legitimate business. The indictment alleges that the employees accepted these checks and provided cash to the defendants and never obtained any identification documents or information. The store allegedly filed CTRs that falsely stated the checks were cashed by foreign nationals who set up the shell corporations. The two defendants cashed checks totaling more than $19 million during the course of the scheme. Approximately $32 million has been seized from the store’s bank accounts in connection with this case. In addition to the Insurance Frauds Bureau, the following agencies collaborated in the investigation that led to the arrests: The U.S. Justice Department; the Office of the U.S. Attorney for the Eastern District; U.S. Immigration and Customs Enforcement; the FBI; IRS Criminal Investigation; and the U.S. Department of Health and Human Services.
- VEHICLE CAN’T BE DRIVEN
Arrested on 6/14/12
Charged with insurance fraud
A Manhattan man reported to Allstate Insurance Company and the NYPD on 9/7/11 that his 2005 Land Rover had been stolen. He filed a claim for the loss and received and cashed a check for $24,124 from Allstate. However, documents obtained from the insurer revealed that the suspect had the vehicle towed to a storage location because the engine had seized and the vehicle could not be driven. An investigation conducted by the Insurance Frauds Bureau and the NYPD’s Auto Crime Division led to his arrest.
- DAMAGE FROM PRIOR ACCIDENT
Arrested on 6/14/12
Charged with insurance fraud in the 3rd degree
The defendant in this case filed a $5,754 claim with Liberty Mutual Insurance Company on 9/11/11 for damage to a refrigeration truck, one of the vehicles used in the operation of his refrigeration business. He reported that the truck had been struck while parked on the New York State Thruway earlier that morning, sustaining damage to the trailer and the front end. The State Police and the Thruway Authority conducted an investigation that showed the damage restricted to the trailer only. Investigators from the Insurance Frauds Bureau and the State Police interviewed witnesses who were employed by the defendant. They reported that the damage to the front end of the truck had actually happened a month earlier.
- FRAUDULENT CERTIFICATE
Arrested on 6/13/12
Charged with criminal possession of a forged instrument in the 2nd degree, grand larceny in the 3rd degree, falsifying business records in the 1st degree and violation of Section 114.1 of the Workers’ Compensation Law
The owner of a construction company in Yonkers submitted a Certificate of Insurance to a general contractor as proof that his employees had workers’ compensation insurance coverage as required by New York State law. However, an investigation by the Insurance Frauds Bureau and the Queens DA’s Economic Crimes Squad uncovered evidence indicating that the Certificate was fraudulent and no such coverage was in place. As a result of the fraud, the defendant avoided paying $3,542 in premiums owed to the State Insurance Fund.
- BENEFITS BASED ON FRAUD
Arrested on 6/13/12
Charged with grand larceny in the 4th degree, insurance fraud in the 4th degree and criminal possession of a forged instrument
Following an auto accident on 5/19/10, the defendant in this case began collecting lost-wage benefits. From 5/19/10 through 9/21/11, he submitted 11 prescriptions for pain medication purportedly issued by his doctor. However, an investigation by the Insurance Frauds Bureau, the Niagara County DA’s Office and the Lockport Police Department revealed that he was working while fraudulently collecting the benefits and in fact the documentation he submitted stating he was unable to work, as well as the prescriptions, were forged/altered. As a result, State Farm paid him $13,700 in lost wage benefits and $1,245 in bogus prescription drug payments to which he was not entitled.
- FALSE IDENTIFICATION
Arrested on 6/12/12
Charged with falsifying business records in the 1st degree and petit larceny
On 5/1/12, the suspect in this case went to a doctor’s office for a medical procedure. She presented a Blue Choice Option Medicaid Insurance Card in the name of another party and completed the relevant paperwork using the personal information of that other party. After she left the doctor’s office, the office manager found a social security card which, when checked, produced the name of a dependent child of the suspect. On 5/14/12, an IFB investigator met the suspect outside the doctor’s office where she was given her Miranda Rights and agreed to be interviewed. She subsequently gave a voluntary statement admitting that she had used an insurance card that was not her own because her insurer did not cover the $550 cost of the procedure she had received. The party whose card she used declined to speak with investigators. This case was referred by the Office of the Medicaid Inspector General and the investigation was conducted jointly by the Insurance Frauds Bureau and the Rochester Police Department.
- FLED ACCIDENT SCENE
Arrested on 6/12/12
Charged with insurance fraud
An investigation conducted by the Insurance Frauds Bureau and the NYPD’s Auto Crime Division resulted in the arrest of a Staten Island man who reported to the NYPD and GEICO Insurance Company on 2/8/12 that his 1998 GMC truck had been stolen. However, the investigation uncovered evidence indicating that the defendant had been involved in an accident while driving the truck and left the scene without properly identifying himself to the other driver or exchanging insurance information. He filed the theft report in an attempt to conceal the fact that he had left the scene of the accident.
- OWNER GIVE-UP
Arrested on 6/11/12
Charged with insurance fraud in the 3rd degree
On 5/24/12, Progressive Insurance Company informed the Insurance Frauds Bureau that the Orleans County Sheriff’s Department had recovered a 2005 Kia Optima that had been reported stolen by its owner on 7/3/07. Investigators interviewed the owner who admitting that he arranged with another person to get rid of the car so that he could collect the insurance payout. He subsequently filed a claim with Progressive for the loss and fraudulently collected $11,346 for the purported theft. The Insurance Frauds Bureau and the Irondequoit Police Department conducted the investigation that led to his arrest.
- ENHANCED DAMAGES
Arrested on 6/8/12
Charged with insurance fraud
An investigation by the Insurance Frauds Bureau and the NYPD’s Auto Crime Division resulted in the arrest of the owner of an auto body shop in Queens. He made repairs to a 2010 Honda brought in to his shop for damage caused in an auto accident. GEICO Insurance Company subsequently issued him a check totaling $4,652 for the repair work. However, during the investigation, the other driver involved in the accident produced photos she had taken at the scene of both her 2010 Jeep and the Honda. Further investigation revealed that the damage to the Honda shown in the adverse driver’s photos did not match the damage in photos submitted by the body shop owner. The true value of the damage caused to the Honda in the accident was $1,211. The shop owner had in fact enhanced the damage in order to ensure a more substantial insurance payout.
- DRUG DIVERSION TASK FORCE 1
Arrested on 6/7/12
Charged with conspiracy to distribute a controlled substance
An investigation being conducted by the Downstate Office of the Drug Enforcement Administration Tactical Diversion Task Force, of which the Insurance Frauds Bureau is a member, led to the arrest of two alleged drug dealers on charges of conspiracy to distribute the controlled substance oxycodone. Additional federal charges are pending against these two defendants. The Task Force investigates organized drug diversion schemes, “doctor shopping” and forgery of controlled substance prescriptions.
- DRUG DIVERSION TASK FORCE 2
Arrested on 6/6/12
Charged with 32 counts of conspiracy to distribute a controlled substanc
A separate Downstate Task Force Office investigation resulted in the arrest of a doctor who was charged with 32 counts of conspiracy to distribute a controlled substance. Additional federal charges are also pending in this case.
- STOLEN IDENTITIES
Arrested on 6/6/12
Charged with Receiving Award for Official Misconduct
An Albany County man was arrested for allegedly stealing the identities of clients through his work as an employee of the New York State Office of Children and Family Services. He and another defendant, previously arrested, then used the identities to obtain credit cards and purchase merchandise. During an investigation by the Insurance Frauds Bureau and the Albany County DA’s Office, a search warrant was executed at the defendant’s residence and he was arrested.
- PAID BY MEDICAID
Arrested on 6/6/12
Charged with insurance fraud
Following an auto accident on 7/6/09, a Binghamton woman filed for no-fault benefits through Progressive Insurance Company. As a result of injuries incurred in the accident, she was given prescriptions for pain medication. During the period from 7/6/09 to 6/9/10, she had these prescriptions filled at various pharmacies in the Binghamton area and submitted documentation provided by the pharmacies to Progressive for reimbursement. However, an investigation by the Insurance Frauds Bureau and the Broome County Sheriff’s Department found evidence that she had altered the information on the documents to make it appear that she had paid cash when in fact Medicaid had paid for the medications. On 6/6/12, she turned herself in to the Sheriff’s Department and was charged with attempting to defraud her insurer of $1,138.
