Illinois DOI Fines Federal Mutual $30,000

The Illinois Department of Insurance fined Minnesota-based Federal Mutual Insurance Co. $30,000 and issued a stipulation and consent order for insurance code violations and/or improper claims practices cited in a department market-conduct examination.

Felony Charges Filed Against Kansas Agent

The Kansas Insurance Department (KID), in cooperation with Sheridan County Attorney Mike Haas and the Kansas Attorney General's Office, has filed felony charges against a Selden, Kan., insurance agent.

An investigation by the KID Fraud Unit led to charges against Stephen C. Carman of Selden. The insurance agent was charged with 10 felony counts, including seven counts of failing to pay over consumers' insurance premiums to an insurance company, two counts of forgery and one count of theft.

Commissioner Sandy Praeger established the Insurance Fraud Unit in October 2003. Kansas Attorney General Phill Kline appointed seven attorneys at the KID as special assistant attorneys general, giving them expanded authority to prosecute insurance fraud criminals.

The charges against Carman are merely accusations and the defendant is presumed innocent until and unless proven guilty.
Anyone who suspects insurance fraud, either by a consumer or by someone in the insurance industry, is encouraged to report the activity to the KID consumer hotline at (800) 432-2484.

North Dakota Man Must Pay $55,000 Restitution for Comp Fraud

A Mandan, N.D., man was ordered to pay $54,679 in restitution to Workforce Safety & Insurance after pleading guilty to fraud in South Central District Court Dec. 16, according to a statement released by the North Dakota Department of Insurance.

Melvin Fleck, 53, was also sentenced to five years of supervised probation on the Class C felony. In addition, District Court Judge Benny Graff ordered that Fleck seek employment, not the leave the state of North Dakota without permission of his probation officer, not possess any firearms and pay a supervision fee to the state probation division. Fleck faces a five-year prison sentence and a $5,000 fine if he violates the terms of his probation.

In the original complaint, WSI said it determined that Fleck had "willfully made false statements" on his Injured Worker Status Reports and willfully made false statements regarding his income to WSI. Fleck was receiving lost time benefits because of a 1992 lower back injury. In August 1999, WSI's Special Investigation Unit received an anonymous fraud hotline report that Fleck was working and receiving income while collecting WSI benefits.

A subsequent investigation revealed that Fleck was working and operating an automotive business and earning income. Fleck had repeatedly falsely reported to WSI that he was not working or earning income. His workers' compensation benefits were terminated in April 2001. A complaint was filed in Morton County District Court in November 2003. WSI was tipped off about Fleck through its fraud hotline. Anyone wishing to report suspected worker's compensation fraud may call (800) 243-3331 or visit their Web site. Callers and Web users may remain anonymous.