Agent Sentenced to Four Years

Patrick James Murphy, 45, of Norco, Calif., pled no contest to 39 felony counts, including grand theft and elderly abuse. Murphy was sentenced to four years in state prison and ordered to pay $328,639.96 in restitution to his victims, according to an investigation by the California Department of Insurance (CDI).

A former Farmers Insurance Agent, Murphy reportedly defrauded 31 insurance clients by collecting premiums and issuing false insurance certificates for commercial, auto, home and workers' compensation. Murphy allegedly collected more than $300,000 in premiums from his victims.

He reportedly continued to represent himself as a licensed Farmers agent, even after Farmers terminated his agent appointment in Oct. 1997.

Couple Surrenders on Fraud Charges

Ron Stahr, 40, of Hawthorne, Calif., and Michele Morlet, 24, of Whittier, Calif., surrendered themselves to CDI investigators in Los Angeles on arrest warrants which charged them with filing false insurance claims.

In the fall of 2001, Morlet and Stahr allegedly contacted an individual to photograph Morlet's license plate on his own personal high-performance vehicle. CDI investigators were contacted by the individual because of the unusual request. Morlet was sent the photographs by CDI investigators. Morlet later reported her car stolen and used the photographs to file a false insurance claim with State Farm Insurance.

Doctor Files Fraudulent WC Claims

A CDI investigation led to the arrest of a Redding man on six felony counts of insurance fraud, six counts of grand theft and one count of conspiracy.

Richard W. Powell, M.D., 43, was arrested at his office in Redding and booked into the Shasta County Jail.

Investigators discovered Powell was allegedly committing medical billing fraud while probing an unrelated fraudulent workers' comp claim. Investigators executed a search warrant on Powell's office in Jan. 2001, and obtained evidence that revealed additional victims.

Powell allegedly hired a Licensed Vocational Nurse (LVN) and instructed the LVN to conduct one-on-one-therapy sessions with some of Powell's patients. He then billed these sessions to the patients' insurance company as if he were the one conducting the sessions. By law, LVN's are not qualified or permitted to conduct one-on-one-therapy sessions.

If convicted, Powell could face up to five years in state prison and/or a maximum fine of $50,000.

Construction Businessmen Indicted

Two former Alameda County construction businessmen, Jay Neal Wright, 50, and his son, Jay Neal Wright II, 29, both of Phoenix, were indicted by the Alameda County Grand Jury on multiple felony counts including workers' comp insurance fraud, corporate tax fraud, employment tax evasion, grand theft, and conspiracy.

Both suspects agreed to surrender to authorities on June 30, 2003, with bail set at $145,000 and $95,000 respectively.

Throughout the 1990s, Wright and his son headed a large residential framing company, Highland Framers, with a multi-million dollar payroll, which did business in and around Alameda and Contra Costa Counties. In 1993, the Wrights allegedly claimed to insurers and State employment tax authorities that they had divested their labor force and instead used outside subcontractors. However, an examination revealed that at least two of these subcontractors were corporations allegedly operated under the control of Highland Framers. These shell corporations were reportedly created to avoid paying the appropriate workers' comp insurance premiums and State employment taxes.

It is estimated this alleged fraud resulted in losses of $3.5 million for various insurance companies, as well as $8 million for the Employment Development Department.

Fresno Man Arrested on Fraud Charges

Investigators with CDI Investigations Branch arrested Juvencio Salazar, 38, of Fresno, on June 17 on a $5,000 felony warrant. Salazar is charged with a single count of insurance fraud and could face up to five years in prison and a maximum fine of $50,000.

The case was initiated after the Fresno Unified School District (FUSD) suspected fraudulent activity in a workers' comp claim filed by Salazar in 2001. Investigators then examined and detected fraudulent activity in a prior workers' comp claim filed by Salazar in May 1994.

In April 1996, Salazar submitted to an Agreed Medical Examination (AMA), during which he complained of pain in the lower back and upper extremities, and continuous pain in his wrist and hand. Salazar was precluded from heavy work and declared approximately 25 percent disabled. Less than a month after the AMA, Salazar underwent a pre-employment medical examination for the FUSD; he reportedly denied any disorders or disabilities and was hired.

Calif. Man Arrested for WC Fraud

CDI Fraud Division investigators, with the assistance of the Glendale Police Department, arrested Robert Galante, 45, of Simi Valley, on a felony warrant charging him with two counts of workers' comp fraud. If convicted, Galante could face up to five years in prison and/or a $50,000 fine.

Investigators allege that Galante, while employed as a power line truck operator in July 2001, claimed he suffered an ankle injury. He claimed he could not drive for more than a 10-mile radius, and required an air cast and crutches. He was offered a modified work arrangement, but declined and took disability benefits. Video surveillance reportedly shows Galante using only one crutch during trips to and from the medical facilities. He had allegedly misrepresented his claim in statements to his medical doctors.

The City of Glendale paid $13,310 in the case.

Woman Pleads Guilty to Fraud Charges

Gwendolyn Henson, 40, of Montclair, Calif., pled guilty to insurance fraud charges and was sentenced to 180 days in jail and three years of formal probation. CDI fraud investigators arrested Henson for the felony insurance fraud charge and a notice for failure to appear in court on an unrelated matter. Henson was also ordered to pay restitution in the amount of $1,650.

In March 2003, Henson reportedly told a grocery store manager she slipped in liquid and fell on the floor of the store. Henson received a $100 payment from the store. Surveillance tape caught Henson allegedly taking a bottle of liquid detergent off the shelf, pouring the detergent onto the floor and rubbing her feet in the liquid. She walked away and proceeded to report the false claim to the manager. During the department's investigation into the above claim, Henson made another similar claim at a different store. Video surveillance there also captured Henson's actions, which were similar to the previous claim.