The South Florida man recruited dozens of homeowners to burn or flood their places for about $14 million of inflated insurance claims in one of the most legendary plots by an adjuster in a state known for brazen insurance scams. Espinosa may go down as arguably the Dangerous Don of shady adjusters in Florida annals.
Espinosa was an independent (or “public”) adjuster. He made his living by earning a percent of insurance payouts he helped line up for client homeowners via his firm Nationwide Adjusters. The bigger the damage, the fatter his insurance take — around 30 percent of the payout.
So Espinosa inflated claims like a hot-air balloon, typically manufacturing damage. An insurance insider, knew how insurers and policies worked — and how to game the insurance system like Picasso colored canvasses.
He paid a squadron of marketers to recruit homeowners. Fires were set and pipes clogged. Great care was taken to make it look like an accident — and Espinosa then pushed the insurers hard for large claims payouts.
Free kitchens lured homeowners
Homeowners gladly signed onboard, egged by the lure of free kitchen or home remodeling, all paid for by their unsuspecting insurers.
The ring decided in advance whether faking fire or water damage would earn a bigger claim. The arsons resembled electrical, kitchen and vehicle fires in homes or garages. The water damage was rigged to look like faulty water lines or clogged sewer lines. In one case, Espinosa and a crony clogged a drain by stuffing small children’s dolls into it. The claim sought more than $200,000 in kitchen-flood damages.
In another case Espinosa placed bed sheets, stuffed animals and clothing under a Christmas tree and ignited the pile with a propane torch. “Wow! Look at my masterpiece!” Espinoza told a cohort while watching the fire spread. The fire earned a payout of more than $317,000.
Another home absorbed fire damage thusly: Espinosa went to a grocery store, bought a frying pan, lard and croquettes. He put half the lard in a frying pan and then used a paper towel to spread lard on the kitchen cabinets. He told the homeowner to wait a few days, cook croquettes and leave the stove on. But a temperature switch on the oven prevented the fire. Espinosa then returned, bought a new stove, installed it and told the homeowner the same thing.
This time it worked. The insurer paid nearly $400,000.
Rigged power strips, loosened pipes
In yet other cases, an electrician rigged power strips to look like they shorted and started fires.
A homeowner in South Miami-Dade had Esponosa’s people loosen a pipe under the sink of the bathroom in master bedroom, then let the water run. And to speed up the damage, the men also used a garden hose.
Then there was the yellow-hammer dodge. Espinosa and a trusted employee arrived at Angela Frye’s home, where a small kitchen fire had occurred the day before. She’d collect much more if just one tile also was damaged, they said. So Espinosa smashed the floor with a frying pan, then with a yellow hammer. He hid the dodge behind a cover story about a dropped plate. The actual damages amounted to about $9,000, though Espinosa enlarged the claim into a $70,000 insurance haul.
Espinosa hid his plot by spreading the damage claims among numerous insurers. That way, no single insurer would easily see a pattern worth investigating. At least 14 insurers were bilked by more than 50 inflated claims.
The plots grew so brazen that the state CFO, Fire Marshall and other agencies launched two fullscale probes called Operation Flames and Flood l and ll. Insurers also provided plenty of evidence and investigative firepower.
The years-long probes finally cracked open Espinosa’s ring. Yet even while languishing in prison after his arrest, he plotted with a fellow inmate to hire a hitman and rub out the prosecutor. The courtroom wizard was Laura Uriarte, who earned the Coalition’s Prosecutor of the Year Award in part for taking down Espinosa and his ring.
The kill plot fizzled. Still, Espinosa was beached for 20 years in state prison for numerous major charges, including racketeering and insurance fraud. In the end, Operation Flames and Floods flamed out Espinosa’s legendary fraud plot.