Florida’s ‘Operation Leaky Pipes’ Leads to 12 Insurance Fraud Arrests

February 4, 2014

Florida CFO Jeff Atwater said an ongoing insurance fraud investigation known as “Operation Leaky Pipes” has led to the arrests of 12 Miami residents. He said the investigation uncovered a scheme between a licensed public adjuster and a plumber to coach homeowners on how to file fraudulent insurance claims for pre-existing or non-existent water damage. The homeowners filed fraudulent claims in an attempt to claim money for home remodeling.

“These 12 individuals tried to cheat the system and now they have to face the consequences,” said Atwater.

Officials said that a tip and a subsequent investigation led by Florida Department of Financial Services’ Division of Insurance Fraud (DIF) detectives, working with the National Insurance Crime Bureau, unraveled the scheme that Jose Nino, public adjuster, and Boris Diaz, plumber, were allegedly operating. Officials said both were arrested after being caught during an undercover operation and both have also provided sworn statements detailing all of the fraudulent claims filed with their assistance.

DIF detectives said they obtained sworn confessions from all 12 named homeowners. They were arrested and transported to the Miami Dade County Jail for processing.

Although the homeowners will be charged individually, the scheme in total resulted in a loss of more than $137,000 to Citizens Property and Casualty Insurance Corp. and more than $38,000 to Liberty Mutual Insurance Co., according to the CFO’s announcement.

The cases are being prosecuted by Miami-Dade County State Attorney Katherine Fernandez Rundle.

The Florida Association of Public Insurance Adjusters (FAPIA) commented in reaction to the arrests, saying it supports “the efforts of CFO Atwater and the Division of Fraud, the National Insurance Crime Bureau along with local law enforcement to root out all forms of insurance fraud in Florida.”

The group said that the licensee reportedly involved in this investigation “is not and has never been a member” of FAPIA.

“FAPIA has a zero tolerance policy on such activity as evidenced by the ethics pledge we require all of our members to agree to upon joining,” said the group’s president, Paul Handerhan.

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