Felony Workers' Compensation Arrest
Ralph Taeger, 66, of Placerville, Calif., was arrested for workers' compensation premium fraud on Jan. 2, 2003. Taeger surrendered to California Department of Insurance (CDI) investigators and was booked into the El Dorado County Jail.
The investigation by CDI disclosed that Taeger, owner of Taeger's Firewood allegedly underreported his company payroll to the State Compensation Insurance Fund (SCIF) in order to avoid paying the proper workers' comp insurance premiums. During the period of March 1, 1998 through March 1, 2002, SCIF was defrauded of $357,024.99 in premium monies.
As a result, SCIF received a small amount of premium but was subjected to a larger loss exposure than the premium amount would normally cover.
Bail was set at $10,000. If convicted, Taeger could face up to five years in state prison and/or a maximum fine of $50,000.
Insurance Fraud Arrests
An investigation by the CDI Criminal Investigations Branch's Fraud Division led to the arrests of Robert L. Pritchett, 28, of Patterson, Calif. and Francisco Fernandez, 37, of Newman, Calif. Pritchett was booked into the Stanislaus County Jail on three felony counts of insurance fraud and Fernandez was booked on two felony counts of insurance fraud.
According to investigators, Pritchett claimed his vehicle was vandalized and his new rims and tires were stolen. As proof of purchase, Pritchett offered an alleged sales receipt from F&L Tire located in Modesto. The receipt was an estimate only and Pritchett had never purchased the rims and tires as claimed, according to investigators. As a result, F&L Tire co-owner Francisco Fernandez also reportedly admitted to investigators he illegally supplied Pritchett with the fraudulent receipt in support of the insurance claim.
Bail was set at $15,000 each. If convicted, both could face up to five years in state prison and/or a maximum fine of $50,000.
Fraud Ring Leads to Three Arrests
Three individuals were arrested after allegedly taking part in a large-scale auto fraud ring that involved lawyers, chiropractors and doctors from California. Juan Reyes Marrufo, 35, Maricela Armenta, 34, and Cristina Rodriguez, 32 were apprehended by the Arizona Department of Insurance Fraud Unit who was assisted by the Phoenix Police Department's Fugitive Apprehension and Investigations Detail.
The investigation found that the ring was an organized system whereby individuals were being "recruited" in Phoenix to use their vehicles in collisions in California. The Arizona and California accident "victims" then allegedly claimed to have received legal and medical services from the other ring participants who contributed to the false filing of claims under Arizona insurance policies.
The recruits were flown to California where they then purposefully crashed their vehicles into other pre-arranged vehicles, usually rentals that had multiple passengers. Passengers from both vehicles would then reportedly file claims under the Arizona policy because the Phoenix driver was "at fault". Accidents often occurred late at night allegedly to reduce the availability of witnesses. Claim amounts would be inflated by the addition of medical expenses presented by various chiropractors and doctors who falsely claimed to have treated the accident "victims" for the collision-related injuries.
The Arizona Fraud Unit (AFU) began collaborating with the California Department of Insurance Fraud Division after the AFU became aware of this activity when an insurer referred suspicious claims from California medical professionals.
The CDI has made arrests of ring participants in California. If convicted, participants in this ring face a maximum of 24.5 years in prison as well as restitution for their crimes of insurance fraud, theft, forgery, and fraudulent schemes.
Woman Pleads Guilty to WC Charges
Marsha Arlene Johnson, 47, of Inglewood, Calif., pleaded guilty to a felony charge of workers' compensation insurance fraud. Johnson was ordered to pay full restitution in the amount of $28,861.77, and received five years' probation and 200 hours of community service. Johnson changed her plea prior to trial, from not guilty to guilty.
Johnson was employed as a nurse's technician at Torrance Memorial Medical Center where she filed a fraudulent workers' comp claim in Dec. 1999 that alleged a work-related back injury. After an internal investigation, Torrance Memorial's claims administrator, Torrance-based Keenan & Associates, denied the claim in the first quarter of 2000 and referred the case over to the CDI for formal investigation. The CDI investigation revealed that Johnson's claim was fraudulent and the investigators promptly obtained a warrant for her arrest. Johnson was arrested on Sept.10, 2002.
According to Keenan & Associates, Johnson's fraudulent claim resulted in a total loss to the employer and claims administrator—including medical payments, investigative and administrative costs—of nearly $30,000.
Contractor Arrested for Premium Fraud
Fraud investigators from the CDI Criminal Investigations Branch's Fraud Division and the San Mateo County District Attorney's Office arrested Thomas Turner, 57, of Fremont, Calif. The San Mateo County District Attorney's Office filed a criminal complaint charging Turner with three felony counts of premium fraud and three counts of grand theft.
A joint investigation was conducted into allegations that Turner had failed to report his payroll to his workers' comp insurance carrier, State Compensation Insurance Fund. The San Mateo County District Attorney's Office and CDI discovered during the investigation that from March 1999 to Jan. 2000, Turner was the sole owner of the San Mateo County Roofing Services. Turner was a licensed roofing contractor and during this period, Turner provided roofing labor and materials to many homeowners. Turner hired employees to perform the roofing work and paid them with cash as well as company checks. The sum of the contracts totaled at least $268,722.
He supposedly issued payroll checks under the names of his roofing crew supervisors, who then allegedly cashed the checks in order to make cash payments to all crewmembers. A SCIF auditor determined that Turner owed between $34,279 and $80,879 in premiums due to allegedly reporting no payroll on his quarterly reports to SCIF.
Bail was set at $200,000. The case is being prosecuted by the San Mateo County District Attorney's Office.
San Francisco Adjuster Convicted for Insurance Fraud
Allstate Insurance Company and several Allstate-insured homeowners were allegedly defrauded after the 1994 Northridge earthquake by insurance adjuster, Harry Miller, who was recently convicted of federal fraud charges.
A federal jury in United States District Court in Los Angeles found Miller, who also used the name Harry Booth, a 57-year-old resident of Pompano Beach, Fla. guilty.
The jury determined that Miller, who is the fifth defendant convicted in this case, was guilty of conspiracy, four counts of mail fraud, three counts of wire fraud and two counts of money laundering.
Miller, who worked in Glendale following the Jan. 1994 earthquake, was an adjuster for Allstate who was supposed to resolve homeowners' claims for property damage after the event. He allegedly conspired with employees of an engineering firm and a construction company to produce grossly inflated bills to repair earthquake-damaged homes.
The employees of the engineering firm and the construction company reportedly paid Miller kickbacks. The kickbacks totaled over $110,000 in checks and cash. The engineering company and the construction company caused Allstate to overpay at least $1.5 million.
This case is the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspection Service and IRS-Criminal Investigation.
Miller faces a maximum possible sentence of 60 years in prison.
Insurance Fraud Fugitive Arrested
A fugitive, Daniel Gray, 43, was arrested on two felony counts of insurance fraud at a Sacramento courthouse, after appearing for an unrelated matter.
In Feb. 2001, the United Services Automobile Association (USAA), reported to the Fraud Division of the CDI, that on July 25, 2000, Gray allegedly submitted an automobile claim for the supposed vandalism of his 1996 Ford F-150 truck. Also, he reported the theft of a car stereo system, a computer laptop, radar detector, global positioning system (GPS), and compact discs.
According to investigators, Gray submitted fraudulent receipts to USAA totaling $3,845.92 in order to receive stipends he was not entitled to.
If convicted, Gray faces up to five years on state prison and/or a maximum fine of $50,000. Bail was set at $5,000.
