Fraud Roundup

February 25, 2007

Washington takes enforcement actions

Washington’s Office of the Insurance Commissioner has ordered UnitedHealthcare Insurance Co. of Minneapolis to pay a $59,000 fine following an agency investigation into the company’s use of unapproved contracts to add chiropractors to its provider network.

The agency ordered the fine after an investigation disclosed the company continued to use the unapproved contracts after it had been notified that it was violating insurance regulations.

In unrelated enforcement actions, the Office of the Insurance Commissioner:

•Fined Great-West Healthcare of Washington Inc., Bellevue, $50,000 for multiple violations of Washington insurance laws discovered during a market conduct exam of the company. Violations included claims handling, agent licensing, misleading advertising, premiums and other issues.

•Revoked the licenses of independent agents Barbara C. Leaverton and Michael R. Leaverton, of Sunnyside, for unfair or deceptive acts and other violations. The revocations were stayed pending appeals.

For details of the enforcement actions and fines, visit http://www.insurance.wa.gov /industry/enforcement.asp.

Bakersfield woman charged with fraud

A Bakersfield, Calif., businesswoman and two accomplices have been arrested in California on charges of alleged fraud.

Shawn Dodd is charged with four felony counts of insurance fraud, one felony count of workers’ compensation insurance premium fraud, two felony counts of employer tax evasion, one felony count of money laundering, and two felony counts of conspiracy to obtain property under false pretenses. Both her husband, James “Sonny” Dodd and her mother, Barbara Bayird face one felony count each of conspiracy to obtain property under false pretenses. All three surrendered at the Kern County Superior Court Jan. 26, 2007, on felony arrest warrants, and were released on their own recognizance.

California Department of Insurance’s (CDI) Fraud Division investigators said they received numerous suspected fraudulent claims reports from insurance carriers regarding the billing practices of Shawn Dodd’s businesses: Provident Medical Management, Executive Medical Management, National Chiropractic, Neurosport Chiropractic, Pacific United Medical Group, Old River Medical Center Inc., and Cal-Sport Physical Therapy. Dodd’s employees made statements identifying fraudulent billing practices by Dodd’s companies. Fraudulent upgrading of chiropractic services also resulted in insurance carriers being fraudulently billed more than $210,000 during 2003, CDI said.

Furthermore, Dodd had denied an employee her workers’ comp benefits after she was injured while working. Subsequent investigation also revealed that Dodd had understated the amount of her payroll and misclassified the function of her employees when reporting to State Compensation Insurance Fund. The misrepresentations resulted in a loss of $8,100 to SCIF, CDI said.

Dodd, James Dodd and Bayird also participated in other fraudulent activities, CDI said.

Kern County District Attorney’s Office is prosecuting the case. If convicted, Shawn Dodd faces a potential maximum sentence of up to 11 years and eight months in state prison and a $100,000 fine. Both James Dodd and Barbara Bayird, if convicted, face a maximum of three years in state prison.

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