22 S. Floridians Arrested in Fraud Ring

The arrests of 22 of 29 ring-members believed to be involved in a widespread racket, which bilked insurance companies for more than $1 million by staging at least a dozen auto crashes and making false claims to area insurance companies, have been announced by the Florida Department of Financial Services Division of Insurance Fraud.

In the aftermath of the arrests DIF has launched a campaign to point out the consequences of staging an auto accident or participating in auto insurance fraud.

The campaign emphasizes the penalties for insurance fraud include prison time and driver’s license revocation. Tom Gallagher, CFO said members of the fraud ring, if convicted, will face a minimum mandatory sentence of two years in prison for organizing the staged crashes, and up to 15 years in prison on all charges.

In the last five years, the Division of Insurance Fraud, has arrested more than 800 people in at least $23 million in Personal Injury Protection insurance fraud. Florida drivers are required to carry a minimum of $10,000 in PIP coverage and $10,000 property damage coverage. By staging accidents, the planners and participants, usually in connection with unscrupulous clinic owners, target the PIP insurance of drivers, and fraudulently bill auto insurance companies for injuries and treatments that never happened.

Gallagher is promoting legislation to address the latest spin on PIP fraud–accidents that never happen. The legislation would establish a two-year mandatory sentence for accidents that happen only on paper or single-car accidents reported as hit-and-runs.

These arrests are the culmination of a six-month investigation by the department, the special investigative units of the insurance companies and the National Insurance Crime Bureau. The 53-year-old suspected ringleader Wilfred Cyriaque, also known as “Lopez” or “Blanc,” is charged with 51 counts each of insurance fraud and grand theft, four counts of staging an accident, and organized scheme to defraud. Investigators believe Cyriaque may have staged as many as 90 crashes during several years.

Cyriaque and 24 participants have been charged under a new law designed to combat staged accidents, which took effect Oct. 1, 2003. State fraud investigators have arrested more than 40 individuals under the new law and, in Miami alone, are actively investigating more than 50 other fake crashes believed to have occurred since October 2003.

Omar Lantigua-Gonzalez, the first person convicted under the new mandatory sentencing law, was sentenced last September to two years in state prison. In what is known as the Hialeah Hummer case, he used a Humvee to damage several vehicles that he and other participants later said had been struck in a hit-and-run incident.

Vivenzio, the state’s first dedicated PIP fraud prosecutor, began in March 2004. PIP fraud-related arrests–based on charges filed by Vivenzio–increased 25 percent in 2004 over 2003, from 155 to 201, and convictions and jail time also were up.

“The tools to fight this crime should be as strong as possible, and I appreciate the work the Legislature has done to enact minimum mandatory sentences,” Vivenzio said. “The more aware the public is of these minimum mandatory sentences, the more likely would-be perpetrators will take notice.”

Vivenzio’s position is funded by the Florida Automobile Joint Underwriting Association, which is also sponsoring the department’s public education campaign along with the Florida Insurance Education Foundation, a Tallahassee-based organization.

The Division of Insurance Fraud was assisted in making the arrests by Miami-Dade Police RID, Hialeah Police Department, North Miami Police Depart-ment and the Department of Corrections. The following insurance companies also assisted: Allstate, Bristol West, Budget, Direct General, Federated National, First Liberty (Liberty Mutual), FAJUA (Illinois National — AIG), Ocean Harbor, Progressive, Republic Western, Southern Group, State Farm and US Security.

Topics Florida Auto Fraud Legislation