Friday, September 8, 2017
L E G I S L A T I O N
* A state fraud authority and no-fault reform are docketed as Michigan lawmakers return from summer recess. Michigan urgently needs a state agency to go after widespread auto cons such as staged-crash rings. Legislation would create an agency to fund the investigation and prosecution of wrongdoers. A fee on registered vehicles would fund the authority. Michigan is one of the most populous states without an anti-fraud infrastructure like an authority or fraud bureau to target scams. Yet the push for an auto-fraud agency has slowed because it’s a provision within a controversial no-fault reform bill. The parent bill is making slow headway. It’s large and complex, so obtaining buy-in of many diverse interest groups is a daunting task. The fraud authority may be peeled off, however, becoming a freestanding bill with a better chance of enactment. Local governments also are pushing hard for auto reforms this session. So the odds of the fraud authority becoming law this year still are modest, though growing.
Note: Texts of anti-fraud bills are available on the
Coalition’s website here.
P U B L I C O U T R E A C H
* “The Coalition Against Insurance Fraud points out that most public adjusters are honest and competent. However, some crooked adjusters prey on disaster victims, going door-to-door to try to bilk homeowners,” HuffPost says in a consumer blog. “Among the schemes that shady adjusters employ are charging a large fee, then vanishing without handling your claim; referring your repair to a dishonest contractor for a kickback; and filing false or inflated claims.”
* “Fake death fell into the moderate category We are seeing a fair number of them,” the Coalition’s Dennis Jay told CBS MoneyWatch in an online story about people who fake their death for life-insurance windfalls. Suspicious deaths involving U.S. residents often occur in underdeveloped countries, where bogus death certificates can be easy to obtain, Jay added. In the Coalition’s report on life and disability scams, insurers reported fake deaths were a “moderate” problem.
Visit www.InsuranceFraud.org to read articles citing the Coalition.
C R I M I N A L C O N V I C T I O N S
* A brittle temper that led to a work fracas landed Randall Brown McKay a jail term for comp fraud. The Santa Ana, Calif.-area man was known for being a workplace hothead. He berated a longtime forklift operator for not opening large, transparent plastic strips at the door of the plant to let in more air. McKay then jumped in front of the guy’s moving forklift and dared the driver to hit him. The worker stopped just short. McKay next ran at the shaken fellow, clocked him in the head and tried to knee him. McKay turned around and filed a comp claim, saying the other employee attacked him, and that a pallet on the onrushing forklift struck and injured him. The plant’s security video quickly doused McKay’s claim. He received 6 months in jail for the phony comp claim and for attacking a fellow worker.
* The mastermind of a scheme to bribe dozens of docs for referrals to his imaging centers received 8 years in prison. Rehan “Ray” Zuberi gave out thousands of kickbacks — ranging in value from $50 to $150 — to docs for referring patients to his Diagnostic Imaging Affiliates centers for tests. The Boonton, N.J. man’s total bribes amounted to hundreds of thousands of dollars, the state Office of Insurance Fraud Prosecutor says. The kickbacks were paid from shell companies Zuberi created. The loot was delivered in cash, checks, gift cards, lavish dinners and expensive vacations. Zuberi raked in millions in imaging claims from the illegal referrals. Life was good for Zuberi. He and his wife drove a Lamborghini, Rolls-Royce, Ferrari and Mercedes. A lien was placed on Zuberi’s 9,000-square-foot mansion. He could’ve received more jail time, except his sentence was shaved for helping convict 17 docs and chiros he bribed.
* Brian Christopher Hanson hurt his back while on duty, he told his comp insurer. The California Highway Patrol officer was placed on limited-duty status. He watched training videos for an hour then never returned to work. The Sacramento-area man’s back hurt too much to sit for long, he said. Then the department discovered Hanson driving nonstop for long periods of time, and doing outdoor activities. Docs reviewed his medical records. Hanson was injured, though he overstated his symptoms and understated his work abilities. Hanson pleaded no contest to comp fraud. He received 180 days in county jail and was permanently bounced from the force.
* Ivan Alberto Hernandez-Madrigal bought a minimal comp policy for his firm Professional Staffing and Payroll Services. The Fort Myers, Fla. man fraudulently claimed he provided comp coverage to multiple construction firms for a fee — effectively renting out the small policy. He also provided them payroll services. Hernandez thus operated as an unlicensed employee leasing company with no comp insurance for clients. Clients had employees who had work-related injuries. Hernandez failed to report the injury claims to the insurer. Instead he paid medical bills from his firm’s bank account, or simply denied high-dollar claims himself. Injured employees were left with thousands of dollars in medical debt. Hernandez received 10 years in state prison and must repay more than $1 million.
C R I M I N A L C H A R G E S
* James W. Shepler, Jr. sought an insurance payout for front-end damage to his 2004 Jeep Grand Cherokee. An insurer field tech examined Shepler’s vehicle and took photos, then paid the DuBois, Pa. man $3,137 for the damage. Shepler then removed this vehicle from his policy. He called his agent a couple of months later, asking to reinstate the Jeep onto his policy. The state AG alleges: The next week Shepler claimed he hit a tree — yes, more front-end damage. And just Shepler’s luck, the same field tech checked the Jeep. The damages were the same as the previous crash, he noticed. He pointed this out to Shepler, who insisted the repairs were fresh. He fixed the Jeep himself, Shepler said. Yet he gave no proof he bought any replacement parts. The tech asked Shepler 3 times if he was sure he wanted to make the claim, and Shepler confirmed yes. The insurer SIU swung into action, and Shepler admitted double-dipping. The AG charges Shepler with insurance fraud and theft by deception.
* Jobless and needing cash, Thomas J. Campbell decided Walmart would be his ATM. The New Jersey man went to a Walmart in Deptford. In-store surveillance caught his antics: He found a puddle, walked through it 3 times then faked a fall. Campbell slipped in the puddle, he told Walmart, and demanded a payout. He admitted he was unemployed and had no health coverage to treat a back injury. Campbell’s charged with insurance fraud and falsifying records.
* A Georgia agent and her hubby stole $100,000 or more in commissions by sending sham applications to life insurers, the state insurance department says. As the department frames it: Amy Livingston heisted the IDs of former clients of her hubby Matthew, who once was an agent. The LaGrange producer landed advance commissions on the policies, then cancelled them and rewrote more policies to keep churning commissions. Matthew collaborated. At least 7 victims were identified, so far, though the insurance department thinks the total could be much higher. Amy and Matthew are charged with insurance fraud, and could spend up to 10 years in jail if convicted.
* After pleading guilty of milking Medicare, heart doc Roy G. Heilbron panicked and faked cancer to avoid sentencing, the feds say. The Santa Fe man agreed to 2 years and was scheduled for sentencing. This allegedly happened next: Heilbron emailed his probation officer, asking to delay sentencing because he was scheduled for chemo for prostate cancer in Costa Rica. He claimed he didn’t have health insurance, and treatment was cheaper in that Central American country. Any delay in treatment could cause his death, he said. Heilbron attached documents outlining his doc’s treatment plan. He said he was diagnosed by Dr. Oscar Paniagua, a “very rare” holistic urologist with offices in Florida and Costa Rica. But the Florida address Heilbron provided was fake, and the clinic in Costa Rica said Oscar Paniagua didn’t work there. Data taken from an electronic document detailing Heilbron’s treatment protocol showed Heilbron wrote up the file himself. He was picked up in North Carolina. Heilbron’s likely 2-year sentence has morphed into potentially another 15 years for making false statements and 30 years for obstructing justice if he’s convicted.
* An embattled Dallas laboratory company accused of masterminding a $100-million fraud through bribes and kickbacks is fighting to keep its licenses and stay in business. Next Health and Medicus Laboratories are suing states and the feds, seeking injunctions to keep their licenses from being yanked. Next Health’s principals, Andrew Hillman and Semyon Narosov, face federal bribery and kickback charges along with 19 others in connection with a hospital chain. The chain paid about $40 million in bribes and kickbacks for patient referrals that generated $200 million in paid claims. The $100-million fraud charge against Next Health stems from a lawsuit by UnitedHealthcare. The insurer alleges Next Health paid bribes and kickbacks to docs and others for overpriced and unneeded drug and genetic tests.
E T C.
* Two more organizations have joined the Coalition. Globlue Technologies offers advanced analytics to the anti-fraud community. It’s based in Houston. … The Anti-Fraud Alliance includes insurer investigators, law enforcement, state prosecutors, regulators and DAs. It’s formerly the Northern California Fraud Investigators Association. Ten organizations have joined the Coalition so far in 2017. Membership stands at 158 mostly national and state organizations.
* Many tools for insurance cons and other scams against 143 million Americans were laid bare when Equifax admitted someone breached its computer systems. Names, SSNs, birthdates, addresses and other info was accessed. Same with driver licenses in some cases. The latest breach is potentially among the largest on record in the U.S. It would surpass incidents in the last few years involving Anthem, Target and T.J. Maxx. Experian, an Equifax competitor, has suffered major breaches too. Security experts urge consumers to watch their credit reports, and credit card and banking accounts. ID thieves may try to commit insurance fraud, open new accounts or steal tax refunds.
F R A U D T R A C K E R
It’s jail time for comp criminals around the U.S. Click the pins in Sacramento, Lithonia, Ga. and Ft. Myers, Fla.
Q U O T E OF T H E W E E K
F A C E S OF F R A U D
Click
on image for more information.
O T H E R H E A D L I N E S
* Ohioan charged with torching restaurant for insurance
* Ask the Contractor: Beware of roof repair scams
* Arkansas woman swaps aliases to hide med cons
C O N F E R E N C E S
September 10-13 — IASIU 2017 Seminar & Expo on Insurance Fraud
New Orleans, LA (IASIU)
September 17-20 — 108th Annual ICA Education Conference
San Diego, CA (International Claim Association)
September 19 — Business Defense Webinar: Catch Me If You Can
Webinar (BAE Systems)
September 27 — Social Media Considerations for State Insurance Investigators
Webinar (NAIC)
October 20 — Oregon IASIU Insurance Fraud Conference
Portland, OR (Oregon Chapter of IASIU)
October 31-November 2— National Fraud Directors Conference
Charlottesville, VA (Virginia State Police)
November 2-3 — 2017 Workers' Comp Fraud Conference
Denver, CO (Pinnacol Assurance)
November 6-7 — 2017 Advanced Insurance Fraud Seminar
Columbus, OH (NSPII)
December 13 — Coalition Annual Membership Meeting
Washington, DC (Coalition Against Insurance Fraud)
