Arrests for January and February 2013
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 1-800-342-3736
Two of five suspects arrested for participating in an insurance and health care fraud scheme have been sentenced following guilty pleas. Joseph Dellerba reported that he was injured when the van in which he was a passenger was hit by a truck. However, the collision was staged and Dellerba was not a passenger at the time of impact. He sought medical treatment for nonexistent injuries or injuries that were not related to the accident and his medical bills were paid by Progressive Insurance Company. In addition, he filed a civil lawsuit seeking damages for injuries purportedly sustained in the accident and received a payment of $682,297 to settle the suit. He was sentenced on 1/31/13 to 30 months in prison. The second suspect, Cynthia Morgan, claimed to have been driving the van that was struck by the truck. She falsely reported being injured and filed insurance claims for personal injuries, as well as no-fault and disability benefits. Her medical care was paid for by Progressive Insurance Company and Mutual of Omaha paid out $108,000 on a disability policy. Morgan also filed a lawsuit for purported injuries and was paid $30,000 to settle that suit. She was sentenced on 2/13/13 to 27 months in prison and will serve three years of supervision following her release. Dellerba and Morgan were ordered to pay restitution in excess of $1.4 million which will also be shared by the three remaining suspects who have yet to be sentenced. The Insurance Frauds Bureau worked closely with the FBI and the U.S. Attorney’s Office on this investigation.
On 1/30/13, Remus M. Nowak, a.k.a. Remus Rose, of Tonawanda, N.Y., was sentenced to serve four months in the Erie County Correctional Facility, five years’ probation and was ordered to pay $30,000 in restitution to New York Central Mutual Insurance Company. He was convicted on 11/19/12 of insurance fraud and grand larceny. He admitted that, following an auto accident, he filed a fraudulent claim for lost-wages in which he fabricated his employment and annual salary information. As a result of the fraud, he collected $30,000 in no-fault benefits to which he was not entitled. He was arrested in May 2012 following an investigation by the Insurance Frauds Bureau and the Erie County DA’s Office.
- NO-FAULT FRAUD TAKEDOWN
Arrested on 1/24/13
Charged with insurance fraud, grand larceny, falsifying business records and conspiracy to commit those crimes
An investigation conducted jointly by the Attorney General’s Office, the NYPD’s Fraudulent Accident Investigation Squad and the Department of Financial Services’ Insurance Frauds Bureau led to the arrest of 16 defendants for their participation in a staged-accident scheme in order to collect the insurance payouts. Most of the defendants allegedly agreed to participate in the accidents in exchange for money up front and the promise of settlement money from bodily injury lawsuits after they were treated for nonexistent injuries at a Brooklyn medical clinic. They filed $331,993 in claims that contained false information about the accidents and their purported injuries. Only two of the defendants were subsequently awarded lawsuit settlements totaling $13,500.
Cynthia Morgan was sentenced on 2/13/13. See first bullet point in "Arrests for January 2013."
- BENEFITS FRAUDULENTLY COLLECTED
Arrested on 2/28/13
Charged with insurance fraud in the 2nd degree
An investigation by the Insurance Frauds Bureau and the Workers’ Compensation Board’s Office of the Fraud Inspector General led to the arrest of a Dutchess County man accused of claimant fraud. Following a work-related injury, he began collecting workers’ compensation benefits. During the benefit period, he submitted written statements to Greater New York Insurance Company reporting that he was not working. However, the investigation revealed that he was employed while fraudulently collecting $117,580 in benefits.
- TWO RINGS, FOUR CLAIMS
Arrested on 2/24/13
Charged with insurance fraud in the 3rd degree and attempted grand larceny in the 3rd degree
An upstate couple reported to Liberty Mutual Insurance Company that an engagement ring and a wedding band had been accidentally flushed in the bathroom of their home. They filed a $6,700 claim for the loss. However, during an investigation by the Insurance Frauds Bureau and the State Police, evidence was uncovered indicating that the couple had previously made similar claims for the same rings. Two claims were filed in North Carolina for which Safeco Insurance Company and Liberty Mutual each paid $5,500. In addition, a third claim was filed with Homesite Insurance in New York for which the couple collected a $3,723 insurance payout. Of the four claims, only the first one, filed with Safeco, was legitimate. The $6,700 claim made against Liberty Mutual was not paid.
- FINANCIAL FRAUD
Arrested on 2/21/13
Charged with grand larceny, criminal possession of stolen property, forgery, identity theft and scheme to defraud
Based on information developed from sources in the High Intensity Drug Trafficking Area (HIDTA) Program that a certain woman was believed to be conducting a scheme to defraud financial institutions, the Insurance Frauds Bureau initiated an investigation. The Bureau uncovered evidence that the woman was actually a victim of a scheme orchestrated by a Queens man who used his knowledge of computers, the Internet and financial institution procedures to carry out an elaborate plot that resulted in substantial losses to four banks. The investigation revealed that the suspect opened accounts at the banks in the names of individuals and corporations whose identities he had stolen. He then wrote worthless checks to other accounts under his control and successfully withdrew the funds prior to discovery of the fraud. Many of the victims whose identities he stole were tenants in his mother’s home. He used the names of these victims to open bank and credit card accounts and a mail drop in Manhattan that was used to receive documents from the financial institutions and give the appearance of legitimacy. In addition, the suspect obtained the account information of third-party victims and created checks that were deposited to accounts under his control. However, bank surveillance cameras that captured numerous ATM and teller withdrawals led investigators to the suspect and resulted in his arrest. He netted $101,000 in this scheme which he used for personal gain.
- CLAIMANT FRAUD
Arrested on 2/15/13
Charged with insurance fraud in the 3rd degree and workers’ compensation fraud
Following a work-related injury, an upstate man began collecting workers’ compensation benefits. However, an investigation by the Insurance Frauds Bureau and the Workers’ Compensation Board’s Office of the Fraud Inspector General revealed that the defendant was employed during the benefit period. As a result, he collected $4,644 in benefits to which he was not entitled.
- NO-FAULT INVESTIGATION NETS NINE
Arrested on 2/5/13
Charged with insurance fraud in the 3rd degree, grand larceny in the 3rd and 4th degrees, attempted grand larceny in the 3rd degree, scheme to defraud in the 1st degree and falsifying business records in the 1st degree
An investigation by the Queens DA’s Office, the NYPD’s Fraudulent Accident Investigation Squad and the DFS Insurance Frauds Bureau resulted in the indictment of nine suspects and a Queens medical clinic for allegedly participating in a no-fault scheme that defrauded insurance companies of more than $150,000. Seven separate indictments charge that five of the suspects who had been in minor auto accidents received cash payments from two runners who coached them on how to fabricate and exaggerate their injuries and steered them to the clinic where they received unnecessary medical treatment. Also charged were the clinic’s receptionist and its manager, who was accused of paying the runners for finding the patients. The investigation included physical surveillance, court-authorized electronic eavesdropping and intelligence information.
- WITNESS IDs SUSPECT
Arrested on 2/5/13
Charged with with insurance fraud
A Staten Island man reported to the NYPD and GEICO Insurance Company that his 2000 Volvo had been stolen from a location in front of his residence. However, an investigation by the Insurance Frauds Bureau and the NYPD’s Auto Crime Division revealed that the car had actually been involved in an accident in which the suspect hit a guardrail and fled the scene. But he was seen by a witness when he returned to retrieve his car keys. The suspect confessed the crime to the arresting officer.