More About the Insurance Frauds Bureau

Bureau Structure

The Insurance Frauds Bureau was created by an act of the Legislature in 1981 as a law enforcement agency within the New York State Insurance Department. The law established the Bureau to effectively detect, investigate and prevent insurance fraud and to refer for prosecution those persons or groups who commit insurance fraud.

As part of the 2011-2012 budget, Governor Andrew M. Cuomo merged the New York State Insurance Department and the New York State Banking Department to create a new Department of Financial Services, effective October 3, 2011. Integrating these agencies under a single leadership and management structure allows for greater efficiency and helps to modernize regulatory oversight of the financial services industry in New York State.

The Bureau is headquartered in New York City, with six additional offices across the State: Mineola, Albany, Syracuse, Oneonta, Rochester and Buffalo. For contact information about the Bureau offices, please select this link..

Insurance Frauds Bureau investigators are designated as peace officers. This designation gives them the authority to carry firearms and make arrests. Investigators are seasoned professionals with years of experience in law enforcement and insurance and financial fraud investigation.

The Bureau consists of specialized units: Major Case/Organized/No-Fault/Fraudulent Auto ID Cards, General, Mortgage and Title, Arson, Auto, Workers’ Compensation, Medical and Upstate. The responsibilities of the Bureau’s units are described below.

Major Case Unit - takes the lead in investigating complex cases involving all types of financial and insurance fraud including commercial rate evasion, no-fault, health care fraud and workers’ compensation premium fraud. The Unit also focuses on the investigation of systemic fraud perpetrated by organized conspiracies and rings.

No-Fault/Fraudulent Auto ID Cards Unit - investigates fraudulent medical claims submitted under no-fault auto insurance coverage and individuals who engage in such fraudulent activity as staged and caused accidents, runner/steerer activity, jump-ins and fraudulent medical claims, among others.

General Unit - investigates reports of fraud involving life, homeowners and agent/broker fraud, larceny, burglary and types of fraud not assigned to other units.

Mortgage and Title Unit - is responsible for combating schemes that target consumers in the real estate market.

Arson Unit - coordinates insurance-related arson investigations in conjunction with New York State Department of Homeland Security – Emergency Services. (formerly the New York State Office of Fire Prevention and Control), the New York City Fire Department’s Bureau of Fire Investigation, the New York City Police Department’s Arson Explosion Squad and local fire departments across the State, as well as the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, among others.

Auto Unit - investigates individuals who fraudulently report their vehicles stolen, as well as body shop operators suspected of enhancing auto damage and related fraudulent activities.

Workers' Compensation Unit - investigates individuals who file fraudulent claims related to injuries in the workplace or who collect workers’ compensation benefits while they are employed. This unit also investigates employers who submit applications for workers’ compensation and general liability insurance coverage containing false information about the number of employees on the payroll and/or the nature of the work being performed. In addition, its investigators also conduct investigations involving employers who submit fraudulent Certificates of Insurance as proof of coverage when in fact no coverage exists.

Medical Unit - investigates policyholders who submit false or exaggerated medical claims, as well as doctors and other health care providers who bill for services that were not rendered, bill for more expensive procedures that were actually provided and perform medically unnecessary procedures.

Upstate Unit - investigates all types of insurance fraud and includes the Bureau’s Albany, Rochester, Syracuse, Oneonta and Buffalo Offices.

Insurance Frauds Bureau Activities During 2012

Team Building

The Insurance Frauds Bureau has been a longtime advocate of team building. Toward that end, collaborative alliances with the insurance industry and law enforcement agencies on the federal, state and local levels during 2012 resulted in successful investigations that netted 595 arrests and 382 convictions obtained by prosecutors in Insurance Frauds Bureau cases across the State. A key factor in building these alliances is to promote frequent and open communication among the team members. A strong, cohesive fraud-fighting partnership is essential in combating this serious, pervasive crime.

The Special Prosecutor Program is a program in which an Insurance Frauds Bureau attorney assists local DA’s Offices with insurance fraud prosecutions. The program has continued subsequent to the merger of the former Insurance and Banking Departments into the Department of Financial Services. The program provides assistance to 14 participating prosecutor’s offices that have executed Memorandums of Understanding with the Department. As part of the program, the Insurance Frauds Bureau attorney is cross designated as an assistant district attorney and assists in all aspects of the cases to which he is assigned.

The Insurance Frauds Bureau Partners With Prosecutors through a program in which the Bureau investigators are assigned to prosecutors’ offices to work side-by-side with their investigative staff. During 2012, Bureau investigators were assigned to the Suffolk, Westchester, Albany and Schenectady Counties DA’s Offices.

Collaboration with Federal, State and Local Law Enforcement reflects the Bureau’s statewide approach to combating insurance and financial fraud. These efforts resulted in successful investigations, arrests and convictions throughout the State during 2012. In addition, the Bureau is an active participant in numerous task forces and working groups designed to foster cooperation among the many agencies involved in fighting insurance and financial fraud. Participation provides the opportunity for joint investigations, information sharing, networking and honing investigative skills.

Together we can make a difference

Civil Enforcement and Restitution

Section 403 of the New York Insurance Law authorizes the Department to levy civil penalties of up to $5,000 plus the amount of the claim on individuals who commit fraudulent insurance acts. In addition, under the provisions of Section 2133 of the New York Insurance Law, the Department is also permitted to levy a civil fine of up to $1,000 for possession of a fraudulent auto insurance identification card and up to $5,000 for each addition card possessed.

Court-ordered restitution totaled $18 million as a result of Insurance Frauds Bureau criminal investigations during 2012.

For additional information about the Insurance Frauds Bureau’s activities and accomplishments, select these links to the 2012 New York State Department of Financial Frauds and Consumer Protection Report and the 2012 Annual Health Care Fraud Report.