Arrests for April and May 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
- FRAUDULENT ENROLLMENT
Arrested on 4/2/13
Charged with grand larceny
Following an investigation by the Insurance Frauds Bureau, a Westchester County insurance agent was arrested for allegedly stealing $62,000 in commissions from MVP Health Care of Schenectady. More than 400 individuals were improperly enrolled into small group and sole proprietor health plans insured by MVP and offered through the Otsego County Chamber of Commerce. The Chamber’s health plan policies were sold to downstate residents, offering them lower rates than they would have paid for coverage in the New York City area. Since individuals generally must either reside or work in the geographical area where the health plan is offered, a phony category of insurance that did not exist was created. The defendant is alleged to have conspired with a former president of the Chamber of Commerce who was arrested in November 2011 accused of creating the phony Chamber membership category so downstate residents could be enrolled. He was fired from his position with the Chamber after his arrest and is now awaiting court action on charges of insurance fraud, grand larceny and falsifying business records. The insurance policies of all 400 people were cancelled after their ineligibility was discovered. However, MVP paid out nearly $1 million in health care costs for those fraudulently enrolled policyholders.
- TRANSIT WORKER CAUGHT
Charged with grand larceny in the 3rd degree, falsifying business records in the 1st degree, insurance fraud in the 5th degree and petit larceny
A New York City Transit worker sustained injuries while he was a passenger in a vehicle involved in an accident on 2/22/11. On 7/20/11, he filed a claim under a credit disability insurance policy he had with Cuna Mutual Insurance Company that would cover loan payments if he was disabled. The claim stated that the last full day he worked was 2/22/11 due to injuries caused in the accident. He further reported that his daily activities consisted of “therapy and rest/doctor visits.” He subsequently submitted a Return-to-Work Statement to Cuna purportedly prepared by his employer giving an estimated return-to-work date of May/June 2012. However, payroll records examined during an investigation by the Insurance Frauds Bureau revealed that between 2/13/11 and 3/26/12, the defendant was employed full time as a subway conductor. Moreover, the Return-to-Work Statement submitted to Cuna had not been prepared by his employer and was in fact fraudulent. As a result, he collected $4,335.50 in credit disability benefits to which he was not entitled.
- DOCUMENTS ALTERED
Arrested on 5/25/13
Charged with falsifying business records in the 1st degree
The defendant in this case filed nine claims with Combined Life Insurance Company for medical services he maintained he had received. In support of the claims, he submitted statements prepared by four different hospitals confirming that the services had been performed. However, an investigation by the Insurance Frauds Bureau revealed that the hospital statements were for legitimate services performed as far back as 2005 that were altered to make it appear that they were for recent services provided. As a result, Combined Life paid out more than $15,000 based on the fraudulent documents.
- WORKERS’ COMP FRAUD
Arrested on 5/15/13
Charged with grand larceny in the 3rd degree, falsifying business records in the 1st degree, insurance fraud in the 3rd degree and violation of Section 114.4 of the Workers’ Compensation Law
Following a work-related injury, the defendant in this case began collecting workers’ compensation benefits. During the benefit period, he submitted documents to Liberty Mutual Insurance Company stating that he was unable to work. However, an investigation by the Insurance Frauds Bureau, the Nassau County DA's Office and Liberty Mutual uncovered evidence that he was employed as manager of two 7-Eleven convenience stores in Florida. As a result, he fraudulently collected $30,419 in benefits from Liberty Mutual.
- STAGED ACCIDENT SCHEME
Arrested on 5/8/13
Charged with mail fraud and conspiracy to commit mail fraud
An investigation by the Office of the U.S. Attorney for the Eastern District, the U.S. Postal Inspection Service, the NYPD and the Insurance Frauds Bureau led to the arrest of eight suspects for their participation in a staged-accident scheme that defrauded multiple insurance companies. From March 2009 to July 2011, the defendants rented U-Haul vehicles and with one or more co-conspirators as passengers, they intentionally either struck or were struck by vehicles driven and occupied by other co-conspirators. These defendants then sought medical treatment for their purported injuries. They later filed more than $2 million in claims with U-Haul’s insurer, Republic Western Insurance Company, and numerous other insurers for which they received more than $1 million in payments for treatment of nonexistent injuries.
- 35 FRAUDULENT CLAIMS
Arrested on 5/3/13
Charged with falsifying business records in the 1st degree and insurance fraud in the 3rd degree
The defendant in this case filed approximately 51 claims with Progressive Insurance Company for reimbursement for prescription drug refills under her no-fault insurance coverage. In support of her claims, she submitted receipts for payment she purportedly made for the refills. However, an investigation by the Insurance Frauds Bureau found evidence that only 16 of the claims were legitimate. The remaining 35 claims were for refills she never actually received and for which she fraudulently collected $29, 287 in no-fault benefits.
- PRIOR SUPPLEMENTS March 2013
- NO-FAULT FRAUD
Arrested on 3/19/13
Charged with insurance fraud in the 3rd degree, forgery in the 2nd degree and falsifying business records in the 1st degree
Following an auto accident on 8/30/12, an unemployed upstate woman filed a claim with Progressive Insurance Company under the no-fault portion of her auto insurance. On 11/13/12, she submitted a medical record from a local medical facility that stated she was unable to return to work for up to six months from the date of the document. Two days later, she submitted a receipt from Newark Wayne Hospital stating that she had paid for an MRI at that facility. In the course of an investigation conducted by the Insurance Frauds Bureau and the State Police, the office manager at the local medical facility reported that the suspect was a patient but her doctor had not signed the medical record indicating that she was unable to return to work for six months. When interviewed, the suspect admitted that she had altered both the medical record and the receipt for the MRI in an attempt to collect $8,477 in no-fault benefits to which she was not entitled.