7 Arrested for Homeowner Fraud

Following an investigation by the Texas Department of Insurance (TDI), the Federal Bureau of Investigation (FBI) and the U.S. Postal Inspection Service, seven Houston homeowners were arrested in connection with an alleged insurance fraud scheme. TDI says the homeowners intentionally flooded their homes and filed claims totaling about $5 million. Arrested were Johnny Duane Staples, Janell Staples, Don Edward Mitchell, Billy Bob Staples, Teresa Staples, Ramnath Ramcharan and Daniel E. Terry. They face charges of money laundering, mail fraud, conspiracy and monetary transactions with criminally derived property. If found guilty, the defendants could face up to 20 years in prison and substantial fines. They allegedly recruited other homeowners and more arrests are expected. TDI investigators began their investigation into the scheme in February 2001. The defendants reportedly purchased two-story homes with full insurance coverage and were thought to have used water hoses or damaged existing water lines inside the houses to flood the interiors. The water lines would be repaired before an adjuster arrived. The defendants would attempt to obtain the full policy limits of the insurance coverage along with additional living expenses. Some homes were flooded more than once, but insured with other companies. The defendants allegedly served as homeowners, independent sub-contractors, vendors and service providers in filing claims, repairing the damage and selling the homes to each other to repeat the process. Homes in the greater Houston area, Bay City and Austin were used in the insurance fraud scheme. Twelve TDI Fraud Unit investigators participated in this case, which has become TDI’s largest crackdown on fraudulent insurance claim filing.

Topics Fraud Homeowners