Fraud News Weekly

Friday, August 10, 2018

* The Trump Administration must keep intact a vital federal law that forbids doctors to refer patients to medical operations where they have a financial interest, the Coalition told the feds. “… these types of self-referral violations end up hurting consumers and driving the cost of health insurance in America ever higher,” Matthew Smith wrote CMS. The Stark Act helps prosecute doctors who gouge Medicare by referring patients to testing labs, clinics and other medical operations they secretly own. Illegal double-dealing places inflated profits over good medicine. Self-referral scams can inflict ill-suited treatment on patients for the sake of big profits, the Coalition told CMS. The Administration wants to water down the 1988 law, believing it’s burdensome for medical providers. The White House also wants to scale back the federal anti-kickback law, which will further loosen anti-fraud controls on America’s federal healthcare system.

* States are heading into the dog days of August with a mixed menu of recent fraud legislation: Massachusetts lost a big chance to protect motorists when an airbag-fraud bill died in the Senate after passing the House in April. … Fraud fighters were happier when a Massachusetts proposal to restrict the use of license plate readers lost traction even though supporters assured everyone that it wouldn’t harm fraud investigations. … In Maryland, Gov. Larry Hogan vetoed a bill requiring government workers-comp self-insureds to report suspected insurance fraud. The bill duplicates existing law, Hogan says.

* With 10,000 Americans turning age 65 every day, scammers often see the elderly as easy targets for insurance fraud. Vulnerable seniors would gain new fraud protections under a new bill in the Pennsylvania House. Financial advisers would gain immunity for good-faith reporting of fraud against seniors. Older fraud victims, or their reps, also can sue scammers and collect attorney fees if they prevail. Punitive damages would kick in if the fraud is willful, wanton or malicious. Legislators remain in session through November, so there’s time to enact new fraud protections for Pennsylvania seniors.

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

* The Administration’s new rule making it almost too easy to form Association Health Plans could create a breeding ground for scammers to sell fake coverage, the Coalition warns in an ongoing news campaign.

• “Fraud and insolvency loom large in the minds of state regulators. Regulators want to make sure that history doesn’t repeat itself,” the Coalition told Bloomberg.

• “The long history of corruption and ineptness has left a strong odor among many regulators who are concerned whether they’ll be returning to more of the same under the new rule,” the Coalition said to Modern Healthcare.

* Nosy news reporters are making life hard for a popup hail-repair firm. An irate Southern Colorado driver says the firm forged his signature to his $5,470 insurance check and is still holding onto his Dodge Ram pickup. A local TV station got involved and is dogging the firm for answers. Find out what happens when a reporter confronts employees in the parking lot

Visit to read articles citing the Coalition.

* Billing USA offered a complete menu of services for its medical business clients, from basic billing to financial falsehoods that made multimillion-dollar scams almost cut-and-paste easy. The Miami firm helped file nearly $5.7 million of false claims for physical therapy and injectable drugs. The outfit lied to insurers that a doc prescribed the services supposedly provided by a clinic named Blue Diamond. Billing USA fabricated super-bills for crooked providers. They only had to send patient info to Billing USA. The firm then fabricated the super-bills, charged insurers for whatever the patient’s insurance plan allowed, then told the clinics so they could fake patient files to reflect the same. Billing USA received a cut of the insurance profits. Office manager Francel Rodriguez was convicted of conspiracy to commit federal healthcare fraud this week. Owner Mauricio Palma already is serving 8 years.

* A cleaning service tried to clean out the Washington state comp insurer. Monica Ann Covey-Standley and hubby Blake Joseph Standley owned a housecleaning firm in Mill Creek. She ran the daily operations, and he handled workers comp with the Department of Labor & Industries. Standley claimed the business had no employees in order to illegally undercut comp premiums by more than $11,000. Yet the firm paid employees to clean houses during that time, their bank records revealed to L&I investigators. And employees said they worked for the firm; they provided wage and tax statements plus time sheets as proof. The couple thus should’ve paid $11,743 in comp premiums. At least 1 employee who cleaned newly built houses was shorted out of pay. The Standleys ignored her phone calls and emails for payment. So her revenge came swiftly:She filed a wage complaint with L&I, which determined the couple owed her about $1,030. That helped bring their scam tumbling down. Covey-Standley must repay L&I $11,743 plus community service and 2 years of probation. Standley earlier received a similar sentence.

* A botched home arson left a Scranton man dead and his father charged with murder, prosecutors charge in Scranton, Pa. As officials frame the case:Brett Sweeting Jr. was supposed to burn down Chad Kenowski’s home for insurance, then flee with his father Brett Sweeting Sr. But Junior accidentally set off an explosion as he poured gasoline throughout the home. Senior fled without helping his son, who frantically ripped off his burning clothes before dying from burns and carbon monoxide. There was a strong smell of gasoline afterward, and the blaze started in several areas. Investigators also found a gas can near Junior’s body. Kenowski had tried to sell his home for years — it was insured for $756,000. The Sweetings spoke by phone during the arson, cell records show. Senior also rented a white Chevy Malibu 2 days before the fire. Video cameras show a white Malibu nearby during the fire. Kenowski’s charged with murder, arson, insurance fraud and other offenses. Sweeting is charged with murder and other offenses.

* Stephanie Pepper Snider filed a claim with State Farm for a 2-carat diamond ring she said she lost the day before. The insurer paid $10,617 to the Renton, Wash. woman. The state insurance department alleges: Snider filed a claim with Allstate for the same ring about a year later. She said it was stolen from her apartment. Snider told Allstate she didn’t know of the State Farm claim or payment. The state insurance department interviewed Snider’s former fiancee, who’d bought the ring. He showed investigators the ring, receipt, diamond certificate and a photo of Snider wearing the ring — after State Farm paid her more than $10,000. Snider’s ex said he didn’t know she’d filed the claim. Snider’s charged with insurance fraud and theft.

* Tracy Peters let her Safe Auto insurance policy lapse for non-payment on May 19. She was involved in a crash on May 28 in Lower Allen Township, Pa. Prosecutors charge: Peters contacted Safe Auto at 12:15 p.m. on May 28 to reinstate her auto policy. The vehicle had no prior damage, she told the insurer. But the crash occurred at 12:10 — before she contacted Safe Auto. Peters is charged with insurance fraud. She reinstated her policy without notifying the insurer about the crash, then tried to make a false damage claim.

* A discount grocer filed a false claim with Erie Insurance for spoiled food, prosecutors charge in the Harrisburg, Pa. area. Timothy Meyers owns Helping Hand Up, which provides affordable groceries to people in need. Meyers claimed a refrigeration malfunction caused him to lose nearly $11,000 in food products. Meyers allegedly sold the food after making the insurance claim. He’s charged with insurance fraud and theft by deception.

* Denise Williams stands charged with insurance fraud in the murder of her husband and high-school sweetheart Mike for $1.75 million of life insurance, prosecutors charge in Tallahassee, Fla. Mike disappeared after supposedly drowning in what seemed a tragic boating accident while duck hunting on a lake with his best friend Brian Winchester. He fell from the boat and was eaten by alligators, the story went. In fact, Denise and Winchester were having a 3-year affair. He finally admitted in court to shooting Mike and burying his body during the hunting trip. Denise helped plan and cover up his murder, he said. Prosecutors allege: Denise made a bogus life-insurance claim just 11 days after Mike went missing. She listed the cause of death as “ducking hunting, disappear (fell out of boat), acc. drowning.” Denise is charged with insurance fraud, and in connection with Mike’s murder. The fraud charges follow an investigation by the Florida CFO.

* A contract mail hauler stole almost $2 million from the U.S. Postal Service by falsely claiming for 12 years he paid for workers-comp insurance, prosecutors allege in Wyoming, Ill. As the case unfolds: Keith A. Ratcliff owns a trucking firm. He was reimbursed for workers-comp insurance for his employees from July 1, 2005 through Nov. 18, 2017. It was part of a Postal Service contract to haul mail between Peoria and locations in western Illinois. Ratcliff submitted seeming documentation yet never bought the policies. He’s charged with theft by deception, mail fraud and wire fraud. Ratcliff could spend up to 30 years in prison if convicted.

* Sicilian gangsters dropped 55-pound iron weights on the limbs of drug addicts, alcoholics and others to steal insurance money involving fake car crashes, police say in Palermo. A nurse at a hospital procured mild anesthetics to tamp down the pain. Sometimes only ice was used to try and deaden the pain before the limbs were crushed. The weights were violently dropped onto an arm or leg, which was immobilized between blocks of cement. The injured were taken to hospitals where cohorts maneuvered the insurance cons. Ring members recruited drug addicts, alcoholics, mentally disabled and poor people desperate for money. They received only a few hundred euros (dollars). The gangsters kept hundreds of thousands of euros of insurance payments. Fake witnesses lied they saw a car hitting victims. At least 70 people had limbs smashed. The investigation was triggered by the discovery of the mutilated body of a Tunisian man on a Palermo street. He died of a heart attack after having his limbs smashed.

* More than 30 unlicensed or uninsured contractors tried to pitch electrical, drywall and other repair services in a sting by the St. Petersburg, Fla. sheriff. For years, unlicensed roofers worked without fear of arrest. Then an investigation by the Tampa Bay Times exposed how the Pinellas County Construction Licensing Board allegedly failed to protect residents from unlicensed contractors. The licensing board failed to ask law enforcement to help take thousand of cases to criminal court, the Times contended. The agency only imposed civil fines it couldn’t compel scofflaws to pay. The county sheriff launched a contractor licensing scam unit, and the legislature passed a law ending the licensing board’s independence this year.

A Miami firm robo-bills insurers for nearly $5.7 million. … A father allegedly lets his son die in a botched New York home arson. … A Washington woman is suspected of claiming a lost ring she didn’t even have. Read about these and other scam tales in by clicking the map.

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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.