Fraud News Weekly

Friday, April 19, 2019

* Florida’s broken system of assigning insurance benefits edged closer to real reforms after 6 years of legislative failures. Success finally could be in sight. Fraud fighters and others in Florida should contact their state Senators right away. Urge them to vote “yes” for SB 122 todayHere’s why: The state Senate is set to vote on vital AOB reforms. SB 122 would rein in widespread abuses of AOBs — including inflated claims and unfair attorney fee awards. The Senate could vote next week. This year’s legislative session is open only through May 3. The House has passed a parallel bill, so the stage is set. This is the decisive moment for action. Abuses and scams are draining insurers, and driving up premiums for honest policyholders. Concerned Floridians can help move SB 122 through the Senate. Success will bring AOB reforms to the governor’s desk for a signature. Write your state Senator today — and urge their support for SB 122.

* The definition of an insurance fraud would expand in North Carolina under a bill that incorporates key provisions of the NAIC’s Model Insurance Fraud Act. The fraud definition would include acts and failure to act with intent to injure, defraud or deceive another person for an insurance scam. … The commissioner’s investigative powers would strengthen, along with gaining the power to arrest fraud suspects. … Paper and electronic insurance applications would carry anti-fraud warnings. … Admitted insurers would have to submit fraud plans to the insurance department.

* “Nearly 150 fraud-related bills were filed in the first three months of 2019. That’s more than all of last year. The bills hail from 39 states, and the Coalition is tracking their progress daily. At least nine bills have gone onto the books,” says the latest edition of the Advocate!, the Coalition’s government affairs quarterly. “… Key topics on elected officials’ minds run the gamut of issues fraud fighters deal with daily: Regulation and licensing of roofing contractors and public adjusters.”

* A controversial bill allowing consumers to seek restitution from insurersalleged to have defrauded has failed in Montana — well, maybe. Consumers would’ve sought repayment through the insurance department, though Gov. Steve Bullock vetoed the bill this week. Yet the veto didn’t signal reassurance to insurers. Bullock told lawmakers to amend the bill. Let consumers seek civil remedies along with the commissioner-ordered restitution, he says. Then he’d sign the bill into law. His veto message: “Unfortunately, the bill stops short of providing Montana insurance consumers the complete protections they need. It is important to remember that restitution may not be the only remedy available to consumers harmed by an insurance company. A consumer may pursue these other remedies on their own, without the assistance of a state agency. To protect consumers, the law must be clear that when the Commissioner orders restitution, the Commissioner does not — and may not — waive a consumer’s other remedies under the law.” The legislature is in session only until May 1, so the clock is ticking away for the amendments.

Note: Texts of anti-fraud bills are available on the Coalition’s website here.

* Rehab scams that bleed insurers and relapse addicts have infested areas of Pennsylvania. “Policymakers need to wake up to the severity of the problem. More people, more corruption, creates more money and attracts more scammers,” the Coalition told the Bucks County (Pa.) Courier. “Until fraud investigators wrap their arms around these crimes and enact resources that take out the legal rewards and insert unsustainable risk, the system cannot begin to clean itself up.”

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* A crash ring led by Tyburious Heyward was dismantled in Sumter, S.C. Heyward’s ring packed cronies into cars and crashed into each other. He had them get treatment from Carolinas Hospital in Florence. He also impersonated some victims at the hospital. And ring members put Heyward’s phone number and his grandmother’s address on all insurance and medical paperwork. After running up large medical bills, they retrieved their medical records and made claims with Geico and State Farm. Heyward also drove his co-conspirators to Georgia to pick up their settlement checks. The insurers eventually wised up. They noticed the repeated contact info, crash locations, and the same Sumter residents being seen at Carolinas Hospital. The South Carolina Law Enforcement Division reviewed body-cam footage from the crashes and saw Heyward impersonating ring members. An investigator went to the hospital and found that medical bills were altered. Many ring members confessed to staging wrecks and messing with the med records when questioned. Heyward received 5 years in state prison, the state DA announced.

* A former NYPD cop worked as a bouncer at a Manhattan strip club while raking in more than $630,000 in federal disability money over 20 years. Gerard Scparta lied that he suffered severe anxiety and depression that made it impossible for him to work as a cop. He was part of a scheme that stole $1.4 million from the feds in bogus disability claims. Scparta was busted along with Kenneth Rubero, a former NYPD detective, and Scott Maraio, a former firefighter. Rubero stole about $396,000, and Maraio took about $364,000. Scparta’s case stems from a New York State investigation into a massive federal disability scam involving more than 120 former New York City cops and firefighters. At the heart of the scam was former NYPD cop Thomas Hale. He coached firefighters and police officers on how to lie on their applications for disability over 25 years. About half said they suffered from post-traumatic stress disorder from the 911 attack. Scparta pled guilty. No word on potential federal sentence.

* Wanna buy a used fraudster mansion? The estate owned by a prominent Bucks County, Pa. family snared in a $20-million insurance scandal was ordered up for auction by the state AG. Socialite Claire Risoldi inflated losses after fires damaged the place. Jewelry, ceiling murals, draperies and other things were grossly over-charged to insurers. The fire scam flamed out, and Risoldi was convicted. So now Clairemont is up for sale. The 6-bedroom, 5-bathroom place is listed for $700,000. Lucky buyers also will get a pool, 3 fireplaces, 3-car garage and more. See the full listing here.

* Edward Sutor Jr. earned about $90,000 a year as a Ventnor (N.J.) firefighter. He also lined his pockets with hundreds of thousands more through a massive prescription fraud plot that milked the state out of $50 million. Public employees and pharma sales reps bribed government and school employees to seek overpriced and unneeded compound meds for ailments like pain, scarring, and fungal and libido problems. A 1-month supply can cost the state thousands. Sutor was part owner of a firm that got kickbacks for recruiting teachers, cops and other public employees. Crooked docs wrote compound scripts without even examining patients. Sutor hauled in $335,552 of kickbacks. He must repay $2.7 million and awaits sentencing. Seven suspected ringleaders, who allegedly help funnel kickbacks from the compounding pharmacy in Louisiana, were charged in March.

* The owner of a freight-hauling firm stonewalled Ohio regulators trying to convince him to buy workers comp. The ensuing probe uncovered more wrongdoing. Robert Tate owns Elite TNT Enterprises. The Ohio Bureau of Workers’ Compensation found that Tate didn’t carry state-required comp. BWC tried several times to work with him. Agents finally subpoenaed his bank records and audited his business. Tate had under-reported his payroll over several payroll periods to illegally lower his comp premiums. He also falsified new applications for BWC coverage by failing to list previous policies with the state agency. And he under-reported the number of workers he employed. Tate must repay BWC $144,000 and serve 2 years of probation. Other BWC cases:Amanda Treadway (Reynoldsburg) must pay BWC $5,010 after secretly working as a swimming pool attendant at a condominium complex, and as a phlebotomist while collecting BWC disability benefits. … Antoine Harris (Cincinnati) worked as a trucker while collecting comp. He must repay $7,963.

* Margaret Towell filed an accident claim with Farmers Insurance on Dec. 16, 2018. Her version of the crash: The Clifton, Pa. woman was driving her Ford Escape when an unidentified vehicle hit her bumper. Towell lost control, swerved and hit a pole. The striking car sped away without stopping. Two kids and her boyfriend were in the car at the time. Prosecutors say: Police responded to a crash on Dec. 15. They found Towell’s car with heavy front-end damage. The driver was Towell’s boyfriend, who was at the scene with 2 kids. The investigation and witnesses revealed that he drove erratically and rammed a utility pole. He was charged with DUI. Farmers interviewed Towell on Dec. 31. She admitted her boyfriend drove during the crash. Towell’s charged with insurance fraud.

* Two contractors avoided paying workers comp for a roofing job in the Albany, N.Y. area, prosecutors charge. The incident began when Jose A. Sanchez applied for a permit for the repairs. He said he had no employees and thus wasn’t required to carry workers comp. In fact he had several employees working the project. Sanchez was denied the permit. His crony and fellow contractor Leroy E. Nelson then applied for a city permit on the same project the next day. He said his firm, which had comp, would finish the work. Yet Sanchez continued the project without Nelson. The duo faces varied charges.

* At least 31 docs took part in a large ring that spooned out 32 million painkillers and other prescription drugs in the Appalachian area and other states, the feds charge after a large takedown this week. The feds allege: A pharmacy in Dayton, Ohio prescribed more than 1.75 million pills without medical need over 2 years. … A Tennessee doc prescribed 4.2 million pills. … An Alabama addict ODd and died after being prescribed at least 800 pills in the 2 months before her death. The doc directed her husband to get rid of the pill bottles before police arrived. … Docs provided Facebook friends with opioid scripts based on Messenger requests. … A Tennessee doc who called himself the “Rock Doc” traded opioids with patients for sexual favors. … A dentist removed healthy teeth while prescribing opioids without medical need.

* A TV station caught up with an irate homeowner and a contractor accused of bilking several victims in the Jacksonville, Fla. area. The results weren’t pretty. First the charges: Contractor Wyatt Green had several homeowners sign assignment-of-benefits forms allowing insurers to deal directly with him for payment, and resolve the repair claims. Green forged the homeowners’ signatures on insurance checks. He also used stamps with the names of mortgage companies to fraudulently endorse those checks. Green and his employees bought 58 false bank endorsement stamps from an online manufacturer, the state CFO says. Now come the TV cameras: Homeowner Kristen Wright told News4Jax that Green gutted her bathroom and never finished it. Green also replaced her roof, but the work failed the city inspection. The entire roof had to be stripped and replaced. Green’s work van also carried a state construction license number that isn’t his, officials say. He faces up to 35 years in state prison if convicted. “I fully intend to make it right. And any other wrongdoings that I have done, I take full responsibility for,” Green said told NewsJax4 when confronted by TV cameras.

* Lousy timing for Joey Delaune. The Lafourche Parish, La. man crashed his pickup into a canal to get out of payments, prosecutors charge. Deputies found the truck partially submerged in a canal. They couldn’t remove the truck right away. Someone later reported a stranger was rummaging through the soaked truck, and sheriff deputies went to check. They found Delaune trying to retrieve personal items from the truck. He allegedly admitted crashing the truck because it was being repossessed for nonpayment. Delaune was booked for attempted insurance fraud.

* A Miami insurance agent bought and transferred more than 300 homeowner policies without the homeowners’ knowledge or consent, Florida’s CFO charges. Claudia Odila Romoleroux pocketed nearly $476,000 after fraudulently obtaining more than $877,000 in premiums for 307 homeowners policies. She supplied mortgage companies with bogus documents and had the homeowners’ escrow money sent to her business account to pay for new policies. She used part of the money to pay for cheaper policies with inadequate coverage. Romoleroux pocketed nearly $476,000. She could spend up to 25 years in state prison if convicted.

* Hard-luck people’s legs and arms were smashed to help a large crime ring fake crash injuries, prosecutors charge in Sicily. Over 40 people were arrested in Palermo. The allegations: The ring recruited drug addicts, alcoholics and the mentally ill. They were promised a healthy cut of the insurance payouts, but took home as little as 300 euros ($340). The gang broke upper and lower limbs — coded as “first floor” and “ground floor.” Police uncovered the scam after a Tunisian seemingly died in a crash. The autopsy discovered he had a heart attack after a beating. He was given crack cocaine to minimize his pain. Around 60 attacks were uncovered in wiretaps. The criminals preferred teenage single mothers because the insurance payouts were bigger. Victims were given mild painkillers or ice packs to numb their limbs. Their arms or legs then were suspended between blocks of concrete. A bag of iron weights or large stones was thrown at the limbs to fracture them. Five arrested suspects specialized in bone breaking, including a goon called “Tony the Meek.” Crashes were staged in areas not covered by surveillance cameras. Gang members posed in hospitals as the victims’ relatives, to ensure the victims stuck to the story. Police are investigating 250 more suspects. They include false crash witnesses, docs providing fake medical reports, PT clinics certifying phantom injury rehab, and lawyers who filed claims.

* Florida is home to 18 of the top 50 cities for fraud around the U.S. — the most of any state. The FTC came down with the findings. Florida’s top 5 cities for scammers: Miami/Fort Lauderdale Metro Area … Pensacola area … Tampa/St. Petersburg … The Villages … Orlando area. The state CFO has launched Fraud Free Florida to better coordinate collective investigative efforts and protect Florida’s large population — especially seniors — from scam artists. Last month, Jacksonville Mayor Lenny Curry, Jacksonville Sheriff Mike Williams and State Attorney Melissa Nelson announced their partnership and support of Fraud Free Florida. Residents are being urged to visit to report fraud and learn ways to protect themselves from scams.


Louisiana man leads a crash ring that packs cars with cronies. … An NYPD cop works as a strip-club bouncer while collecting disability. … A Jersey man lines his pockets in a $50-million medical scam. Click the map to read about these and other cases around the U.S.

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Fraud News Weekly is published each Friday except for Thanksgiving week and the week between Christmas and New Years. Copies of previous issues are available in the members-only section of Employees of member organizations may share this newsletter freely internally. Sharing by non-members strictly prohibited.