Each year the Texas Department of Insurance (TDI) investigates hundreds of cases of suspected fraud. Its fraud investigators, who are licensed peace officers, investigate fraud alleged to have been committed by persons engaged in the insurance business, as well as claim fraud committed by policyholders, service providers and others.
In 2005 and the first part of 2006, TDI’s Fraud Unit successfully prosecuted 114 cases of people who got caught trying to make money through insurance fraud. Here, in no particular order, is TDI’s list of the top ten insurance fraud offenders:
1. Walter Neuls, former Colonial Casualty Insurance Company president, along with his wife Deidra who served as vice president, schemed to defraud the company out of $750,000. The Neuls used the money to fund an elaborate lifestyle, including travel and extravagant personal purchases, resulting in the insolvency of Colonial Casualty.
TDI subsequently placed the company in receivership. Both husband and wife received 120 months deferred adjudication for the offense of misapplication of fiduciary property and were ordered to pay $750,000 in restitution.
2. David Brabandt and his sister Barbara Del Aguila operated Aguila Insurance Agency in Dallas. Neither held valid licenses to sell insurance in Texas. Brabandt had never been licensed to sell insurance in Texas and Aguila’s license was cancelled in 1998.
They were charged in multiple indictments in April 2005 with taking payments from over 300 victims and not purchasing insurance for them. They pled guilty on Feb. 1, 2006, to two felony charges, were sentenced to two years in the Texas Department of Corrections, and were ordered to pay $183,861.29 in restitution.
3. Jack Miller Sr., a former insurance agent, used the identities of unsuspecting consumers to submit 30 fraudulent applications for life insurance to two different insurance companies. Miller’s scheme enabled him to obtain $21,850.40 in advance commissions on those purported sales.
Miller pled guilty in Austin to the state jail felony charge of Aggregated Theft and was sentenced to nine months in a Texas State Jail Facility.
4. An investigation into a staged accident ring in the Dallas area netted the apprehension of nine individuals. The nine were part of a ring that submitted 71 fraudulent accident claims totaling almost $600,000. Several of the claims were filed using identifying information of people without their knowledge. To date, seven of the nine have been convicted of Engaging in Organized Criminal Activity.
Bobby Williams received 10 years deferred adjudication and was ordered to pay $55,021.61 in restitution; Wallace Williams received 10 years deferred adjudication and was ordered to pay restitution totaling $109,729.29; Michael Williams was sentenced to seven years in the Texas Department of Criminal Justice; Kenneth Clewis was sentenced to five years in the Texas Department of Criminal Justice, was fined $1,500 and was ordered to pay restitution in the amount of $598,431.69; Lushiul Charles Boston received 10 years probation, was fined $3,000 and was ordered to pay $89,000 in restitution; Nathaniel Williams received five years probation and was ordered to pay restitution in the amount of $59,913.20; and Brandon Williams received 10 months deferred adjudication and was fined $1,500.
5. Donn A. Bauer, using a company name of International Diagnostic Technologies, fraudulently submitted 1,371 health insurance related claims, totaling $425,682 to insurance companies for his services as a medical provider. Bauer represented himself as a licensed Doctor of Chiropractic, when, in fact, he is not.
Before the scheme was detected, Bauer was able to receive approximately $344,679.87 from insurance companies. Bauer received 72 months probation for the offense of Insurance Fraud, was fined $14,000 and was ordered to pay restitution in the amount of $55,113.91.
6. Dirk Rose continued working for almost three years while receiving Long Term Disability benefits and Workers’ Compensation benefits. Insurers paid $103,004.60 to Rose and medical providers during the course of his scheme.
Rose received 120 months probation for insurance fraud, was fined $2,500 and was ordered to pay $81,000 in restitution.
7. Rodney Bigler, a passenger in a vehicle involved in an accident, submitted a fraudulent statement to the at-fault driver’s insurance company for $40,000 in lost wages attributable to the accident.
Bigler pled guilty to the offense of Insurance Fraud and was sentenced to two years in the Texas Department of Criminal Justice.
8. Katie James filed a claim on a credit disability policy using fraudulent medical records to support her claim. She received $8,275 in payments before her scheme was detected.
James was sentenced to 30 days confinement for Insurance Fraud, was ordered to serve five years probation, was fined $500 and ordered to pay restitution in the amount of $8,284.
9. Jose Vega, a former Texas Peace Officer, filed a claim with his insurer for $7,790.50 in items stolen during a burglary of his residence. The burglary never happened and the items were not stolen.
Vega received five years deferred adjudication, was ordered to complete 260 hours of community service, and was ordered to pay $7,790.50 in restitution. In addition Vega was ordered to surrender his peace officer license to the Texas Commission on Law Enforcement Officer Standards and Education.
10. Donald “Tony” Brelsford, a former agent, received insurance premiums from two business clients, and instead of forwarding the premiums to the insurance company, used the money for his own benefit.
Brelsford received 10 years deferred adjudication and was ordered to pay restitution in the amount of $74,021.
Source: Texas Department of Insurance
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