IFPA Announces Top 10 Fraud Cases of 1999

The Pennsylvania Insurance Fraud Prevention Authority (IFPA) released its top 10 insurance fraud cases of 1999. IFPA’s billboards say, “Commit Insurance Fraud. Enjoy Luxury Living.” They threaten jail time for people who commit insurance fraud. The billboards are not idle threats. People are receiving jail time and being sentenced to pay heavy fines, according to the IFPA’s list.

The IFPA’s 11 funded law enforcement units made more than 300 insurance fraud related arrests in 1999. There were 177 convictions for insurance fraud in the Commonwealth. Of those convictions, the IFPA selected its “Top 10” based on the dollar level of fraud, particular severity of the crime, and sentence for conviction.

Here is a summary of the cases. In parentheses after the summary is the IFPA funded unit responsible for the case:

1. Russell Pagano, a former master plumber and insurance adjuster, was sentenced to two years in prison without chance for parole for insurance fraud, tax evasion and money laundering. He was also fined $50,000, and ordered to pay $305,000 to the 56 insurance companies identified as his victims. The convicted combined his plumbing and insurance adjusting skills to steal more than $300,000 in false insurance claims. (The Philadelphia District Attorney’s Office handled this case.)

2. Richard Yaksic, a former Prudential Insurance Company agent, was charged with insurance fraud for forging insurance check for 12 insured individuals in the Pittsburgh area. Two of the insured were his former fiancee and his brother, who turned him in to authorities. Yaksic, who had no prior convictions, was sentenced to 10 years probation, and $168,000 in restitution payment to Prudential. (Allegheny County Police and District Attorney’s Office handled this case.)

3. Another insurance agent, William J. Adams, of Camp Hill, was convicted of stealing more than $110,000 from an elderly man. Adams received checks totaling $220,200 from the victim and forwarded only $100,000 to John Hancock Insurance Company. Williams was sentenced to six months in prison and ordered to pay $150,034.88 in restitution. The elderly man’s money was returned by John Hancock. (Cumberland County District Attorney’s Office handled this case.)

4. Kimberly Augenbaugh was sentenced to six to twenty-three months in prison, two months of which are house arrest, four years of probation, 100 hours of community service, and fines and restitution to Pennsylvania/Inservco Insurance Company for her part in a scam involving her injured father, Edward Williams. When Williams was injured in a car accident, his benefits allowed for the payment of home health care services. Augenbaugh and three cohorts — Monica Carlins, Jeffrey Duttry and Frank Dragoone — all claimed to have provided the services when they, in fact, had not. They submitted a total of $42,300 in false claims. All four were charged and convicted. (Office of the Attorney General handled this case.)

5. Involved in a vehicle false theft report turned sour, Joseph Surdylowski was convicted of insurance fraud. Surdylowski took possession and disposed of Michael Mitchko and Maureen Quinn’s 1989 Ford Ranger pickup truck so that they could file a false theft report and collect the insurance money. When authorities caught on to the scheme, Mitchko and Quinn cooperated and Surdylowski threatened Mitchko with physical violence. Following a jury trial, Surdylowski was sentenced to four to eight years in a state correctional facility and ordered to pay $5,966 in restitution jointly with Mitchko and Quinn. (Office of the Attorney General handled this case.)

6. Llewellyns Pharmacy owner Gary DeSanto made a habit of filling and refilling prescriptions that were never prescribed or were prescribed for fewer refills. Most of the fraudulent prescriptions were billed to U.S. Healthcare for reimbursement. DeSanto was charged and convicted of Medicaid insurance fraud. He was sentenced to a $5,500 fine, three years probation, court costs and $20,000 restitution. (Office of the Attorney General and Northeast Regional Task Force handled this case.)

7. Stanley Clark was feeding his gambling habit by ripping off unsuspecting customers of his Allentown insurance agency. He was convicted of cashing over $20,000 in checks intended for the purchase of insurance policies and depositing them into his own account. Clark received five years probation, fines and restitution to each of his seven victims, many of whom are elderly. (Lehigh County District Attorney’s Office)

8. Shaun Cronin’s insurance fraud conviction stemmed from an alleged injury at his employer, Tri-County Human Services in Carbondale. He was determined to have a cognitive deficit and was awarded total disability benefits in the amount of $527 bi-weekly. Cronin was seen driving a vehicle with magnetic signs advertising “Tinkers Antiques and Collectible.” The vehicle was registered to his wife. Cronin was also seen working at the antiques shop and working to clean out a client’s barn. On all workers’ compensation checks received, Harleysville Insurance has a printed warning notice that states “This check is for workers’ compensation related benefits. You must advise both the employer and Harleysville Mutual Insurance Company of any income received or earned, including from self-employment, while receiving these benefits. Failure to do so may result in civic and/or criminal liability.” Cronin was convicted and sentenced to 6 months probation, 25 hours of community service and $4,000 in restitution payment. (Northeast Regional Task Force handled this case.)

9. Terrence Walker was off work on a workers’ compensation claim after being injured at his job at a local hospital. He obtained a second job and never reported it to his hospital employer. He collected both workers’ compensation and a paycheck. He was found guilty and ordered to pay $15,834.33 in restitution, a $50 civil fine, and was placed on five years probation. (Allegheny County Police and District Attorney’s Office handled this case.)

10. In a tangled web of lies and false claims that took place over seven years, Lee and Phatcha Kongsiri, were charged with stealing more than $1.5 million from insurance companies by faking Lee’s death and fleeing to Bangkok, Thailand. In late 1999, Thailand authorities notified Attorney General Mike Fisher’s office that the Kongsiris had been arrested in Thailand. They are still awaiting extradition. The Kongsiris are each charged with nine counts of insurance fraud, seven counts of theft by deception, two counts of attempted theft by deception and one count of criminal conspiracy. The Kongsiris lived in Easton during the alleged scam where Phatcha claimed that her husband died while visiting Thailand. She even produced a fraudulent death certificate and a Death of American Citizen Abroad report. She collected $1,586,947 from seven insurance companies. Two companies, including Allstate and Prudential, did not pay on the claims because they suspected fraud. The outcome of the Kongsiris’ extradition is not yet known. While the Kongsiris have not yet been tried for this crime, the high visibility and dollar amount of the fraud make it worthy of a “top 10” fraud. (Office of the Attorney General is handling this case.)

For more information visit www.helpstopfraud.org.

Topics Carriers Auto Fraud Workers' Compensation