Florida Announces 17 Arrests in Largest-ever PIP Bust

By Michael H. Adams | March 3, 2011

Florida’s “Operation Deep Horizon” has netted 17 arrests — including a clinic owner, doctors, clinic employees and staged recruiters — in the state’s largest-ever auto personal injury protection (PIP) insurance bust .

Chief Financial Officer Jeff Atwater, along with Miami-Dade State Attorney Katherine Fernandez Rundle, announced the arrest, which Atwater touted as another example of his commitment to pursuing fraud in the state.

“This case is just one example of the hundreds or similar fraud schemes run daily by accident clinics operating throughout Florida,” Atwater said. “The fraud schemers bill insurance companies for procedures that never happened and we all get stuck with the bill through increased auto insurance premiums.”

The arrest stem from fraudulent billings by five Miami-Dade clinics including New Horizon Practice, Medico de la Familia, Coral Way Rehabilitation Services, Therapium Health Corporation, and AB Diagnostic.

Investigators said that New Horizon Practice owner, Elsa Terrero, allegedly help organize staged accidents and then directed the participants where to go for treatment. Dr. Gerald Amado then signed documents for follow-up visits and treatments that never occurred.

At Medico de la Familia, employees allegedly recruit and paid individuals to come to the clinic where they coached individuals to commit fraud by advising them how to respond to any insurer inquires. Dr. Gustavo Acosta signed documents for examinations he allegedly didn’t perform. Investigators charged that employees at all the clinics were involved with obtaining and creating false claims that were submitted to insurance companies for payment.

“When professional healers become professional criminals in order to make some easy cash we all lose and this insurance fraud scheme could not have worked without medical professional claiming serious injuries where none existed,” said Miami-Dade State Attorney Katherine Fernandez Rundle. “Lies upon lies led to dollars upon dollars for all the parties charged today.”

In addition to the 17 individuals arrested, investigators are looking for eight other individuals involved in the case. The 25 individuals face 142 various charges including racketeering, staging an accident, insurance fraud, grand theft and organized scheme to defraud. Under state law, staging an accident includes a mandatory minimum mandatory sentence of two years in prison and up to 30 years if convicted of an organized scheme to defraud. Collectively, they face up to 1,115 years in jail.

Joining state investigators were the special investigative units of Gainsco, Imperial Fire & Casualty, Mercury Insurance, Geico and State Farm. The units were praised for providing substantial assistance to the operation. Investigators also applauded the work of the U.S. Secret Service Electronic Crimes Task Force and the National Insurance Crime Bureau.

The NICB ranks Florida first in the nation for staged accidents with Miami ranking the third highest for questionable claims. According to the Insurance Information Institute, the typical Florida family with two cars pays $100 annually in higher premiums due to fraud.

“If you multiply that by 11 million cars in our state it amounts to nearly a billion dollar fraud tax,” said Atwater.

The arrest comes just days before the opening of Florida’s legislative session where reforming the state’s no-fault system is a top priority of lawmakers, insurers and consumer groups.

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