Fraud News Weekly

Friday, September 20, 2019


* Fighting insurance fraud in Michigan took on new life after major auto insurance reforms went into effect earlier this year. Legislators now are zeroing in on insurers that post fraudulent auto rate info to mislead drivers who already face the nation’s highest auto premiums. A Senate bill proposes hefty fines of up to $100,000 for insurers that knowingly include false or misleading info in a state rate filing. The state insurance director also would post on the department’s site a rate comparison for lines that are of most interest to consumers. Consumers can make more-informed comparisons with the info.

* Efforts also are underway to adopt Coalition-backed counterfeit airbag-fraud legislation in Michigan. The new bills would make it a crime to manufacture, sell or install knockoff airbags. There are 2 bills because Michigan requires a separate measure for penalties. Both have broad Coalition support, and from our partners at Honda North America plus others. Violators would face a felony conviction with up to 4 years in prison, $10,000 fine per violation, or both. The bills will have their initial hearing in the House Transportation Committee.

* Ohio is working to stem the flood of healthcare fraud. Health plans must release claims data to employers upon request within 30 business days, a state House bill would require. The influx of anonymous, detailed claims data would assist health plans in ferreting out scams. Plans that repeatedly miss the deadline would be deemed to engage in unfair and deceptive practices. SB 9 has cleared the Senate and is pending in the House.

* Sober homes in California will have to toe the line if California’s governor signs a bill on his desk. The proposal would make it a crime to provide false or misleading information about rehab products, services, locations, marketing materials, the media or on a website. The state Department of Health Care Services would have authority to fine, suspend or revoke licenses of violators.

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


* Consumer resource alert: Insurers and others are gearing for International Fraud Awareness Week, Nov. 17-23. A great way to alert your staff and consumers about insurance fraud. Many groups want to reach out year-around. Either way … you’ll find high-impact consumer videos, infographics and other tools from the Coalition. Visit the video cellblock for 15 consumer videos. Coalition members can adopt them with your name, logo and URL. Same with a fraud infographic telling all about this crime. … And a contractor infographic that shows consumers how to avoid repair scams. … Coalition scam alerts can be adapted to your event and format. … The Hall of Shame and Fraud of the Month have memorable tales of woe to show people the price we all pay. To receive and customize Coalition videos and infographics, just contact Kendra Smith.

Visit to read articles citing the Coalition.


* Washington state’s insurance department earned another conviction: Roberto Roman-Salgado totaled his uninsured car on Sept. 28, 2018 when he fell asleep while driving. He bought auto insurance from Progressive on Oct. 2 and filed a $10,131 claim the next day. Progressive found towing records showing the collision happened before he bought the policy. Progressive sent the case to the state fraud bureau. Roman-Salgado was handed 25 days of electronic home monitoring.

*A prison nurse’s claimed needle attack drew a sharp sentence in California. Ndiawar Diop was a vocational nurse at a state prison in Chino. First he said he accidentally stuck himself with a needle, then made a workers-comp claim worth tens of thousands. Then he said an inmate jabbed him. Diop flip-flopped again when questioned. The prisoner tried to stab him in his neck; he reached out to defend himself and was poked in the hand. Witnesses and other evidence quashed the scam. Diop was handed 18 months in Riverside County jail. He also must repay more than $97,000.


* Racial slurs were spray-painted on the walls of former NFLer Edawn Coughman’s restaurant in Gwinnett County, Ga. The one-time offensive tackle allegedly vandalized his business to fake a burglary and hate crime for insurance, prosecutors charge. The allegations: Coughman painted graffiti that included the n-word, “Monkey,” “MAGA” and swastikas on the walls and restaurant booths. MAGA is an abbreviated version of Donald Trump’s campaign slogan, “Make America Great Again.” Coughman quickly contacted his insurer to report the damage. Yet he didn’t report the crime to police until officers approached him at the scene. A witness told a 911 call-taker there was a person inside the conjoined pizza restaurant and ice cream shop damaging the business. The caller described a suspicious truck — a black Chevy Silverado with no license plate. Responding officers saw Coughman driving the truck in the shopping center, and learned he owned the vandalized business. Coughman had several TVs in the back of the truck, with mounting brackets on the back and damaged drywall attached. Police also found a license plate, yellow crow bar and cans of black spray paint inside the truck. The crowbar is consistent with yellow pry marks at the back door of Coughman’s eatery. He’s charged with insurance fraud and other crimes.

* An unlicensed contractor bilked an elderly homeowner out of $54,000 by reneging on repairs after taking his payments, prosecutors charge in the Orlando, Fla. area. The homeowner contracted Cleveland F. Brantley for repairs. This allegedly happened next: Brantley said Allstate confirmed it would cover the repairs — even though Allstate didn’t insure him. Allstate would send him a $141,000 check when the work was completed, he said. So the senior paid Brantley $9,000 from his checking account and $51,780 with credit cards. Brantley had promised to re-roof the house, kill all mold, remove and replace the insulation and paint the ceilings in 4 rooms. Brantley demolished a bathroom he never rebuilt, put shingles on the roof that had to be replaced — at extra cost to the homeowner — and failed to do the other jobs. He spent less than a week, off and on, at the victim’s house.

* SOS Towing now is sending out its own SOS in Mobile, Ala. The owners were arrested for price gouging and sending inflated invoices to insurers. The bust comes just a week after the firm’s 60-day ban from the police department’s rotational towing list was lifted. SOS and 4 other towing firms were blacklisted as part of a city-wide investigation. The 5 firms complained about the bans at city council meetings, presenting evidence that other towing companies also were gouging. Then it was revealed that city police wreckers charged storage, winching and dolly fees that allegedly violated city towing laws. Many of the laws governing towing practices in Mobile need updating, officials say. SOS owners Gary Lamar Smith Jr. and Sr. are charged with insurance fraud. Area towing firms have come under scrutiny amid the crackdown. Anytime Towing allegedly stole the personal car of — get this — a police homicide detective from his apartment complex.

* Alleged victims of roofer Randall Blake Copeland were so miffed that they formed a Facebook group to air their gripes. A storm raced through Boone County in 2018, wrecking roofs, screens and gutters. Dale Artman says he paid Copeland nearly $9,000, then Copeland did no work. Other victims stepped up, and at least 17 started the Facebook group. The case went to the state AG. Copeland wrote the alleged victims an apology, promising to make good. A local TV reporter confronted Copeland. He said Damage Solutions had struggled for the last year and that he’d refund their money. He didn’t say when. A supplier has sued Copeland for $48,000 for supplies he allegedly never paid for.

* An exec seeks dismissal of charges that he tried to bribe North Carolina’s insurance commissioner to curry favorable regulatory treatment of his life insurers. Greg Lindberg says his actions fell short of criminal conduct. Lindberg allegedly tried to cozy up with campaign contributions. Commissioner Mike Causey secretly recorded meetings with Lindberg and other after going to the feds with suspicions about bribes, news reports say. Lindberg also allegedly asked Causey to replace the senior regulator overseeing his insurers to provide fair regulation. That doesn’t meet a criminal threshold, Lindberg says. He acquired a group of life insurers in the U.S. and overseas starting in 2014. North Carolina regulators have taken control of Lindberg’s main U.S. insurers since his indictment.

* Some 58 suspects were corralled in a federal sweep of pill mills charged with $66 million of fraud losses in Texas. At least 16 are docs or other med professionals in an alleged scheme. As charged: The suspects trafficked in bogus scripts that spread 6.2 million pills onto the streets. Pharmacies often were involved in processing the scripts. Private insurers, Medicare, Medicaid and others were duped. Other scams also were swept up. Several suspects, for instance, rifled a health provider’s electronic records to steal patient IDs. The info was repackaged as bogus physician orders and sold to DME providers and contractors for false billings.


* The Coalition welcomes 8 more organizations into membership in a year of record growth, surpassing 200 members: American Fidelity Corporation … Canal Insurance Company … Department of Regulatory Agencies (Colorado) … Diligence International Group … Kentucky Department of Insurance … Master Trace … New York Life … Skopenow. We’re excited to begin working with our new members to advance the fraud fight.

* A landmark public-private effort to jointly tackle medical scams has seen large growth this year and is well-positioned for a stronger role going forward, the Coalition’s Matthew Smith said in remarks at the annual leadership forum of the Healthcare Fraud Prevention Partnership this week. “The year ahead will hold challenges, for sure. But our future is tremendous, our growth is strong and we look forward to partnering with our like-minded and focused fraud-fighting partners,” Smith said. HFPP brings together the nation’s leading fighters against medical fraud. Private health plans, HHS, U.S. Justice Department and other partners share actionable fraud data plus other information. The group has grown to 144 partners and added 35 in the last year, Smith reported. The HFPP also has seen a 55% increase in partners sharing anti-fraud data. Watch too for the HFPP to issue its next white paper on “Fraud & Abuse in Genetic Testing” in 1Q 2020.

* Fake loan insurance is being peddled around the U.S., the California insurance department warns. Consumers shopping for privately funded loans have been targeted in New York, Pennsylvania, Tennessee and Texas. The firm calls itself Val Taylor Investments. Victims have lost $100,000 so far. People who ask online about loans are told they qualify, though they must buy loan insurance in case they can’t repay. Borrowers are told to wire the premium to an out-of-state checking account. The scammers give victims a phony insurance certificate seemingly from the California insurance department, with the state seal. The insurance department doesn’t issue insurance certificates.


A nurse claims a false needle attack in California. … A former NFLer allegedly vandalizes his restaurant as a fake hate crime in Georgia. … An unlicensed contractor allegedly reneges on repairs in Florida. Click on the pins to see these and other fraud 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.