Gregory V. Serio, the Superintendent of the New York State Insurance Department, has announced the “Top 10 list of worst cases of insurance fraud in New York State during 2002.” The “winners” were selected from more than 1,200 new cases investigated by the Department’s Frauds Bureau.
The NYSID said the “Worst among the offenders was a woman who claimed her ex-husband had been killed in the World Trade Center tragedy. She submitted a fraudulent claim for $500,000 in death benefits on behalf of the beneficiary, her 14-year old daughter.” The investigation uncovered evidence that the insured was alive and living in Florida. He was unaware of his ex-wife’s activities.
“Everyone pays for insurance fraud, and so everyone must join in stamping it out,” Serio stated. “The Top 10 ‘Rotten Apples’ represent insurance scams perpetrated in New York State that were particularly large, audacious or tragic. We hope to draw attention to the crime of insurance fraud as a way to educate consumers and make them aware of the various ways insurance fraud can occur. The Department works with law enforcement throughout the State, insurance companies and other public service agencies to eliminate fraudsters. It is only with educated consumers as the final piece of a statewide effort, that we will win the fight against insurance fraud.”
The following cases were also singled out by the NYSID as particularly egregious frauds:
— A claims processor for Blue Cross Blue Shield of Central New York was charged with insurance fraud, grand larceny and falsifying business records for submitting 138 fraudulent claims from November 2000 through March 2002, using the names of various family members. As result of these fraudulent claims, she received payments from Blue Cross Blue Shield of more than $103,000.
— The president, the vice-president and co-owner, and the general manager of a Suffolk County auto body shop were arrested for enhancing damages in order to jack up insurance claims. The NYSID indicated this is probably the largest fraud case in the state’s history. More than 450 arrests have been made thus far in the investigation, 305 in 2002 alone. For the first time, investigators seized the assets of the body shop owners, including $117,000 in cash, $140,000 in various bank accounts and more than $1 million in commercial real estate.
— A resident and business owner in lower Manhattan was arrested in November and charged with insurance fraud and grand larceny. Displaced from her apartment, she rented space at the Helmsley Carlton Hotel, and filed a claim with FEMA for reimbursement of one month’s hotel bills and received payment. The investigation revealed that she had previously filed a claim with Chubb for living expenses and received payment of $58,000.
— A licensed insurance agent was accused of taking insurance premiums from nine clients but failing to remit them to the appropriate insurer. He was also charged with issuing six fraudulent auto insurance identification cards and providing documents to a business owner indicating that the business had proper insurance coverage when in fact no coverage existed.
— Three Brooklyn residents were arrested and accused of defrauding Prudential Insurance Company of a total of $17,300. The defendants allegedly sought auto insurance by telephone, stating they would submit premium payments electronically to secure coverage. However, although no money was transferred, they were able to receive refunds when they later “cancelled” the coverage.
— A former insurance agent from Harrison, NY, was arrested and charged with stealing more than $91,000 from a life insurance company by forging the signature of an elderly client on an annuity refund check and keeping the proceeds. The victim’s daughter discovered the theft when she reviewed her family’s financial records.
— Thirty individuals – including 24 car owners and six alleged middlemen – were charged in a $1.6 million undercover sting operation that resulted in the recovery of 68 reportedly stolen vehicles. According to the charges, the owners turned their cars over to middlemen to get rid of them, filed insurance claims falsely reporting the cars stolen and received settlements of as much as $32,000. The middlemen then sold the cars to undercover detectives posing as junkyard dealers for up to $1,500. The operation also led to the discovery of 33 false insurance claims that potentially could have cost various insurers $700,000.
— Following the work-related death of her husband in 1980, a Long Island woman became the beneficiary of his workers’ compensation benefits, provided she did not remarry. On numerous occasions during the benefit period, she submitted written statements to the State Insurance Fund maintaining her single status. However, an investigation turned up evidence that she had remarried in 1990 and subsequently received nearly $110,500 in benefits under false pretensions.
— An investigation resulted in charges being brought against 71 individuals and the recovery of 43 vehicles valued at more than $1 million. Among the 71 charged were 26 vehicle owners who allegedly falsely reported their cars stolen to obtain insurance settlements. This is the most recent in a series of undercover operations that are part of an investigation that began in July 2001 known as “Operation Ready, Willing and Able.” Working undercover, NYPD detectives set up a phony towing and wrecking garage called Able Towing and put the word out that owners could get rid of their cars with “no questions asked.” The illegal transactions were audio and video taped by the undercover investigators “working” at Able Towing.
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