30 More Arrested in Second Wave of Massive Florida Insurance Fraud Scheme

May 21, 2015

Florida CFO and State Fire Marshal Jeff Atwater, alongside Miami-Dade State Attorney Katherine Fernandez Rundle, has made more than 30 arrests during the second wave of a collaborative state and local operation known as “Operation Flames and Floods.” The investigation exposed an extensive scheme in which a Miami public adjuster named Jorge Espinosa recruited homeowners to stage fire and water damage claims in residential homes in order to defraud multiple insurance companies.

Previously arrested in February 2014 for crimes related to this fraud ring, investigators have since uncovered 25 more fraudulent claims tied to Espinosa, representing total losses of more than $14 million.

“It is clear that this scheme was driven by greed, and unfortunately, it is the honest policyholders in our state who are left on the hook to cover the millions of dollars that were stolen,” said CFO Jeff Atwater.

Atwater credited the work of the Department’s investigators, as well the support of the Miami-Dade Police Department’s Arson Unit and Miami-Dade County State Attorney Katherine Fernandez Rundle, in stopping the individuals and holding them accountable.

Miami-Dade State Attorney Katherine Fernandez Rundle said the insurance thieves were making their money by “Reaching into the wallets of every honest citizen of Florida. Their profits come from our pain and hard work. That is why these arrests are so important.”

Operation Flames and Floods began in November 2012 as a joint investigation between the Florida State Fire Marshal’s Office and the Miami-Dade Police Department’s Arson Unit. In February 2014, 14 people were arrested after 13 homes were intentionally set on fire and five more reported staged water damage. As a result of the fraud, multiple insurance carriers incurred more than $7.6 million in reported losses.

Further investigative efforts uncovered 25 more claims tied to this fraud scheme, representing an additional $6.7 million in fraudulent claims paid by the following insurance companies: Tower Hill Insurance Group, Citizens Property Insurance, Federated National Insurance Company, GEICO, Bankers Insurance Group, Southern Fidelity, Mercury Insurance, State Farm, Florida Peninsula, Ascendant Commercial Insurance, United Property and Casualty, Ark Royal Insurance and Southern Oak Insurance.

“Insurance fraud is not a victimless crime,” said Tower Hill Insurance Group President Don Matz. “In fact, it impacts insurance policyholders around the state through increased rates that are required to recoup the funds stolen through these fraudulent acts.”

“We applaud the efforts of CFO Atwater’s office and the Miami-Dade State Attorney Katherine Fernandez Rundle, and we are glad to have played a part in this investigation,” said Joseph Theobold, Citizens Director of Special Investigations. “Insurance fraud translates into millions of dollars in costs paid by our policyholders. We must remain diligent in rooting out fraud.”

The Sarasota, Lee, Collier and Highlands County Sheriffs’ Offices assisted with the arrests, along with the Florida Fish and Wildlife Conservation Commission.

Source: Florida Department of Financial Services

Topics Florida Fraud

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