Auto Insurance

pdf Pennacle Fla Study

Florida Times-Union: Online editorial: End the fraud

Apr 14, 2010

http://jacksonville.com/opinion/editorials/2010-04-14/story/car-insurance-end-fraud

Rampant car insurance fraud is moving, like a tropical undergrowth, from South Florida to Central Florida, causing accidents, injuries and unnecessary increases in the car insurance rates of all Floridians.

It must be stopped before the epidemic reaches Jacksonville.

In March, 19 scammers were arrested in a statewide sweep by the Florida Department of Financial Services.

The scammers have moved from South Florida, where enforcement is being focused, to Central Florida. Can Jacksonville be next?

The two most common types of insurance fraud:

  • Faking it. Damaging cars at an offsite location, then reporting a collision at an intersection.
  • Swoop and squat: Creating an accident on purpose, followed by faked injuries and fraudulent injury claims.

Also common are inflated insurance claims and false theft reports.

In many cases, organized crime is involved.

These cases can be intricate to investigate. Runners steer injured passengers to crooked doctors.

Let's stop the fraud statewide, but especially before it reaches Northeast Florida.

 Top cities for fraudulent insurance claims:

1. Brooklyn, N.Y.
2. Tampa
3. Los Angeles
4. Orlando
5. Miami

 Staged accidents, questionable claims in 2009:
1. Florida: 1,262
2. New York: 760
3. California: 608
4. Texas: 248
5. Illinois: 178


Excerpt from CAIF’s Fraud News Weekly

Mar 19, 2010

Two Travelers auto policyholders rear-ended a vehicle that was pushed into three parked vehicles in Coral Springs, Fla. None of the three parked vehicles were occupied during the crash, the policyholders and police reports confirmed. But that didn’t stop Paul Placius. He claimed he was sitting in one of the vehicles and was injured by the crash. In fact, he walked up to his vehicle after the dust-up, pretended he was a passenger, and pursued an injury claim with Travelers. The insurer and state Department of Financial Services helped team up for the conviction. Placius pleaded guilty, and earned one whole day of probation.


McClatchy Newspapers: Recession is fueling a boom in insurance fraud

Mar 11, 2010

By Tony Pugh

Washington Bureau

 

WASHINGTON — The sour economy is producing a bumper crop of cash-strapped consumers, business owners and shady agents who're fueling a wave of insurance fraud that's keeping regulators and law enforcement officials busy from coast to coast.

 

Whether it's worthless health plans peddled by fax, staged auto accidents, arson or slip-and-fall accidents at the local mall, insurance fraud of all kinds is booming in the recession and consumers are paying the price in higher premiums.

 

To keep it in perspective, roughly 48 million insurance claims are made each year in the U.S. and less than one-quarter of 1 percent are referred to the nonprofit National Insurance Crime Bureau for investigation of possible fraud.

 

Last year, that amounted to just more than 85,000 questionable claims. That was up 14 percent from nearly 75,000 in 2008, however.

 

A recent survey of 37 state insurance-fraud bureaus by the Coalition Against Insurance Fraud found that the recession "appears to have had a significant impact on the incidence of fraud" last year. On average, the bureaus reported increases in case referrals and new investigations in all 15 categories of fraud the survey covers.

 

 

Leading the way was the sale of bogus health insurance plans, with 38 percent of bureaus reporting a "much higher" increase over 2008.

 

With some 50 million uninsured Americans and growing confusion about the health care debate, state insurance regulators have their hands full keeping up with scam artists. In recent months, more than dozen states have put out consumer alerts or issued fines and cease-and-desist orders against unregistered firms offering worthless plans or deceptively marketing plans with limited benefits as full-coverage insurance.

 

Some of the bogus plans turn out to be discount cards that provide only slight price breaks on services such as prescriptions or X-rays. Many are advertised on television and the Internet, but most are marketed through junk faxes that are sent to businesses, government offices and homes.

 

One recent fax reads "Congress to pass reform act. In preparation for the new health care model, our company now offers creditable coverage plans" with 80 percent coverage on prescriptions, diagnostic, X-ray and lab work for only $368 a month, or $4,416 a year for a family policy.

 

Not a bad deal, considering the average annual price for standard family coverage exceeds $13,000, according to the Kaiser Family Foundation. For those who are jobless, uninsured and unable to afford COBRA health coverage, these offers seem too good pass up.

 

"So here you have people in desperate circumstances, and they're getting these faxes that are promising them the moon and complete coverage at low costs and they want to believe, so they buy it. But it's just a scam. It's a total scam. It's just a maddening, frustrating, unfortunate circumstance," Oklahoma Insurance Commissioner Kim Holland said.

 

Last August, the state of New York fined the American Medical and Life Insurance Co. $700,000 and barred it from selling limited-benefit plans in New York after numerous complaints from consumers.

 

In one instance, a Rochester woman bought an American Medical plan, paying $419 a month in premiums. When her hospital bills totaled nearly $28,000, the policy paid only $1,164 of her bill, state officials said. A 36-year-old man who suffered a stroke had a similar experience when his plan paid only $250 toward his $30,000-plus hospital bill, state officials said. The company eventually paid in full after the state insurance department got involved.

 

John Ollis, the president of the American Medical and Life Insurance Co., said independent agents who sold the policies didn't properly explain their benefits. Ollis said the company agreed with state officials that the policyholders wouldn't have bought the plans if they'd known of the coverage limitations.

 

State officials are reviewing a company proposal to retrain its agents and to comply with other state rules. If it's approved, the company can resume sales of limited-benefit plans in New York, Ollis said.

 

Oklahoma is one of 20 states that have taken action or are moving to stop one of the biggest national providers of these policies, a company known as the American Trade Association. Headquartered in Tennessee, ATA has taken in about $14 million in premiums across the country from about 12,000 people, Holland said.

 

Typically, policyholders don't realize they have worthless or inadequate coverage until they submit claims. The company does business in numerous states under a variety of monikers, including Serve America Assurance and Smart Data Solutions.

 

"They change their name and face when regulators get close," Holland said.

 

Recently, ATA sued two South Carolina companies in federal court in Tennessee, claiming the firms were to blame for failing to secure insurance for ATA members.

 

An ATA attorney in Memphis, Tenn., declined to comment.

 

Frank Scafidi, a spokesman for the National Insurance Crime Bureau, said there were no empirical data to validate the theory that the economy was spurring more insurance fraud.

 

He said, however, that when gasoline prices began to spike several years ago, so did the number of automobile "give-ups," in which owners fraudulently report their vehicles as stolen or destroyed in order to collect on the insurance. Many of the abandoned vehicles were gas-guzzling SUVs and pickup trucks, Scafidi said.

 

In the absence of more hard data, however, the survey of state insurance-fraud bureaus is notable. As the recession raged last year, 68 percent of states surveyed by the Coalition Against Insurance Fraud also reported an increase in auto "give-ups" as job losses made it hard for many people to keep up with their payments.

 

Some owners put their vehicles into lakes or rivers and report them stolen. Others may be less creative.

 

When creditors came looking for Elizabeth Layton's tractor in January, she allegedly claimed that it was stolen. However, information in an unrelated burglary investigation revealed that the vehicle was in a garage on a nearby farm. Layton, of Laurens, N.Y., faces charges of grand theft, insurance fraud and false reporting.

 

Insurance agents appear to be a big part of the fraud problem, with 69 percent of states citing an increase in agent fraud.

 

Former insurance agent Emil Feduniec, 52, of Tuckahoe, N.Y., was arrested in February, accused of failing to make payments on two policies while collecting more than $15,000 in commercial property insurance premiums in 2008 and 2009. The two policies ended up being canceled for nonpayment, but not before one of the property owners paid $25,000 for roof damages to a structure that Feduniec allegedly failed to insure. If he's convicted on grand larceny charges, Feduniec faces up to seven years in prison.

 

Roofers were some of the worst insurance scammers last year.

 

According to the insurance crime bureau, the number of questionable claims for hail damage spiked more than 200 percent, from 256 in 2008 to 772 last year.

 

Roofers, like other general contractors, suffered through a dismal 2009 as homeowners, unwilling to tap their depleted equity, put off repairs.

 

"We have seen more questionable claims in the area of hail damage where unscrupulous roofing companies take advantage of storms to fake or deliberately cause damage to roofs," said Joe Wehrle, the president of the insurance crime bureau.

 

Scott Morrison, an expert in hail roof damage with Haag Engineering of Dallas, said homeowners were more likely to be the culprits. They try to simulate hail damage by striking the roofs with ball-peen hammers or golf balls inside socks or even by twisting quarters into asphalt shingles.

 

The scams often unravel when cotton and nylon fibers from the socks are left in the shingles. Morrison said that striations left in the tiles from quarters or dimes also were visible.


PRESS RELEASE: CFO Sink's Staged Accident Sweep Results in 19 Arrests Statewide

 

Mar 15, 2010

TALLAHASSEE – Florida CFO Alex Sink today announced that her statewide sweep of staged accident scammers last week resulted in the arrest of 19 suspects, including arrests in Ft. Myers, Miami, Orlando, Pensacola, Tampa, and West Palm Beach. Since July 2009, CFO Sink’s investigators have arrested 259 people for PIP fraud, culminating in 156 convictions. Insurance fraud is a third degree felony, punishable by up to five years in prison.

“Staged accidents put every Floridian at risk, both physically and financially,” said CFO Alex Sink. “I am taking aggressive action every day to get these scammers off our streets and behind bars where they belong.”

According to statistics from CFO Sink’s Division of Insurance Fraud (DIF), Personal Injury Protection (PIP) fraud is the most reported type of fraud, accounting for 30 percent of all referrals received in FY 2008-09.   DIF has seven PIP fraud squads dedicated solely to investigating PIP fraud across the state.  These squads are located in the division’s Central and South Florida regional offices where PIP fraud is most prevalent. Each squad works in cooperation with local law enforcement and consumer groups.

“Medical fraud crimes (PIP) can be among the most intricate types of fraud to investigate,” said National Insurance Crime Bureau Director Ron W. Poindexter. “Being able to build coalitions and collectively bring proactive resources to bear against these crimes is critical to our success. Our partnership with CFO Sink’s division is an example of the coalition building that benefits both consumers and industry.”

Most Common Types of PIP Fraud:

  • Reporting a collision at an intersection after first damaging the cars at an offsite location.
  • “Swoop and Squat” - intentional real collisions, followed by fraudulent injury claims.

Sweep Arrests To Date:

Tampa (3)

  • Jose Liriano Nunez— DOB:   7/20/1977— Conspiracy & Insurance Fraud
  • Guillermo Rodriguez Lopez— DOB: 10/26/1990— Staged Accident & Conspiracy
  • Robert Clethen III— DOB:   2/28/1988— Conspiracy & Staged Accident

Miami (7)

  • Hilda Somodvilla-Licea— DOB: 4/10/1920— Staged Accident/Grand Theft/Insurance Fraud/Florida Communications Fraud Act
  • Sergio Cordero— DOB: 11/26/1988— Staged Accident/Grand Theft
  • Abdel Tome— DOB:   9/14/1969— Insurance Fraud /Grand Theft/Staged Accident/Organized Scheme to Defraud
  • Luis Rivero Dominguez— DOB:   9/01/1975— Insurance Fraud/Grand Theft/Staged Accident/Organized Scheme to Defraud
  • Jeff Ceremy— DOB:  2/12/1988— Fictitious Insurance Card
  • Yadira Gonzalez— DOB:  1/23/1989— Insurance Fraud/Grand Theft
  • Leanardo Santana— DOB:  2/13/1985— False statements in support of an accident claim

Ft Myers (4)

  • Dieulene Stevenson— DOB:  8/22/1950— Insurance fraud & Grand Theft
  • Roger Francois— DOB:  9/24/1970— Insurance Fraud
  • Dennis Artaud— DOB: 09/04/1968— 2 Counts of Insurance Fraud
  • Maxeau Prochette— DOB: 06/05/1969— 2 Counts of Insurance Fraud

West Palm (1)

  • Gary Jean-Baptiste— DOB: 04/07/1952— Presenting False Insurance Card
  • Sheree Dawn Seymore— DOB: 07/31/1962— Presenting False Insurance Card (aka Sheree Dawn Bell)

Orlando (3)

  • Youlen Menendez— DOB: 11/28/78— Insurance Fraud/Staged Accident/Grand Theft
  • Adelmis Montejo-Lopez— DOB: 02/17/77— Insurance Fraud/Staged Accident/Grand Theft
  • Luz Arguinzoni— DOB: 06/03/67— Insurance Fraud/Grand Theft

Pensacola (1)

  • John Bryant III— DOB: 02/18/1976— Contributing to Delinquency of Minor/Staging of Accident with Intent to file PIP Claim/Filing False Insurance Claim/Grand Theft

CFO Sink’s Division of Insurance Fraud made over 830 insurance fraud-related arrests in the last fiscal year, and investigates various forms of insurance fraud relating to health, life, auto, property and workers’ compensation insurance policies.  Depending on the estimated loss amount, the Department of Financial Services will pay up to $25,000 for information directly leading to an arrest and conviction.  Anyone with information about this or any other suspected insurance fraud is asked to call CFO Sink’s Fraud Fighters Hotline at 1-800-378-0445 or visit www.MyFloridaCFO.com/fraud.


St Pete Times: Tampa trio accused of staging auto crash

 

Mar 13, 2010 

By Jessica Vander Velde
Times Staff Writer

TAMPA — Sheriff's deputies arrested three people who they say staged an auto crash on Sheldon Road on Friday night.

The Hillsborough County Sheriff's Office is reporting that Amauri Perez Delgado, 40, Zoraida Domitila Zayas Padilla, 41, and Frank Lopez Masso, 30, met before the crash to plan how they'd carry it out. About 10 p.m., they staged a crash at Sheldon Road and Hamilton Avenue, according to the Sheriff's Office.

They were planning to get money from their insurance companies by filing an insurance claim with an unknown pain management clinic, their arrest reports say.

They were charged with participation in a staged crash and taken to the Orient Road Jail. Bail was set at $7,500 each.

The arrests come amid news that the number of staged auto crashes appears to be increasing nationwide.

Tampa ranked second in the nation behind Brooklyn, N.Y., for questionable auto claims for the first half of 2009, according to National Insurance Crime Bureau statistics. Tampa Bay ranked fourth in a similar comparison of metropolitan regions.

The method in which the three Tampa residents are accused of carrying out their plan is the most common way staged auto crashes are done, according to Detective Michael Hennessy, who investigates insurance fraud in Tampa for the Florida Department of Financial Services.

In Florida, most staged crashes are carried out by a group of people who plan a crash and then either carry it out or set up a scene to appear as if there had been a crash. Usually, no innocent drivers are involved, Hennessy said.

After the crash, the drivers often file for medical services.

Florida Insurance Council executive vice president Sam Miller recently said that the number of staged auto crashes in Tampa will cause higher auto insurance rates.

An Allstate spokeswoman estimated that, nationally, 20 percent of premiums go toward helping insurers cover the cost of fraud.

Cracking down on auto insurance and personal injury fraud is a top priority for the insurance industry this legislative session. They're seeking to give state insurance fraud investigators the authority to pull over suspects, and they want to ensure that personal injury clinics are licensed with the state and owned by doctors.

That's an important piece because sometimes clinics are involved in the scheme, detectives said.


Insurance Journal: Florida Sweep Nabs 19 Suspects in Staged Accident Fraud

 

March 15, 2010

Florida officials say a statewide sweep of staged accident scammers last week resulted in the arrest of 19 suspects, including arrests in Ft. Myers, Miami, Orlando, Pensacola, Tampa and West Palm Beach

Florida CFO Alex Sink said that since July 2009, investigators have arrested 259 people for faking accident medical injuries and personal injury protection (PIP) fraud, culminating in 156 convictions.

According to statistics from the Division of Insurance Fraud (DIF), PIP fraud is the most reported type of fraud, accounting for 30 percent of all referrals received. DIF has seven PIP fraud squads dedicated solely to investigating PIP fraud across the state.

The state says insurance fraud costs the average Florida family as much as $1,400 a year-- much of it due to staged accidents-- and the cost is rising.

Find this article at:

http://www.insurancejournal.com/news/southeast/2010/03/15/108145.htm


TAMPA TRIBUNE: Op-Ed: Auto insurance fraud threatens area drivers

 

http://www2.tbo.com/content/2010/mar/06/co-auto-insurance-fraud-threatens-area-drivers/news-opinion-commentary/

By DAN TARANTIN

Special to The Tampa Tribune

Published: March 6, 2010

Every day, hundreds of thousands of drivers in the Tampa Bay area head onto local roadways to work, shop or play. Most of us aren't thinking that we're potential victims of fraud, or worse, that someone might intentionally crash into our vehicles.

But that's exactly what's happening in our area. Quietly, almost without warning, Tampa Bay has emerged in the past six months as a national epicenter of auto insurance fraud, including staged accidents and questionable claims, according to the National Insurance Crime Bureau.

Why should you care? For starters, this wave of fraud is driving up the cost of your auto coverage, as insurers must include losses sustained through fraudulent acts in the rates everyone pays - in fact, many auto insurers have recently filed for rate increases with state regulators. It's also making it harder for you to obtain coverage, as auto insurers are tightening underwriting standards to rein in mounting losses associated with fraud.

But worst of all, it is endangering your safety - you could be seriously injured if you are inadvertently caught up in a staged or caused accident, one in which fraudsters intentionally crash vehicles together in order to file injury reports and medical claims.

Often, these staged accidents are the work of organized fraud rings that use "runners" who solicit crash victims and steer them to unscrupulous medical providers. These crooked clinics then deliver questionable or unnecessary medical treatments that "max out" the drivers' and passengers' $10,000 in Personal Injury Protection (PIP) coverage required under Florida law.

Today, Tampa is the second-worst city in the country for insured losses related to staged accidents and questionable claims. Orlando is ranked fourth, and Miami is fifth. Overall, Florida is the single worst state in the U.S. for these auto fraud activities, according to the National Insurance Crime Bureau.

Why is this occurring in Tampa Bay and Central Florida? For sure, the economic recession is a factor, as some drivers are using fraud as a means of getting quick cash in a down economy. But organized auto insurance fraudsters have also migrated into Central Florida in the past year as a result of earlier crackdowns by law enforcement officials and auto insurers in South Florida.

Here in the Tampa Bay area, law enforcement agencies and auto insurers are responding aggressively. At Direct General - the auto insurance company I run - fraud-fighting operations have been dramatically beefed up, and the company's analytical capabilities have been enhanced to more quickly identify and address fraud. We're also working closely with state agencies such as the Division of Insurance Fraud and Department of Health, as well as the Hillsborough County Sheriff's Office, to root out organized fraud rings as well as those unscrupulous medical providers working alone.

But more tools are needed in this fight.

For starters, law enforcement should have ready access to resources sufficient to target and respond to the proliferation of fraud activity. In conjunction, there should be tougher penalties for fraudsters, including medical providers who allow or perpetuate fraudulent activity at or through their clinics. State laws should be strengthened to require more stringent documentation of all drivers and passengers involved in crashes. Often, these people pop-up repeatedly in accidents.

Finally, we need to do more: All Floridians can play an active role in reporting suspicious incidents to the state's Division of Insurance Fraud (800/378-0445), the National Insurance Crime Bureau (800/835-6422) or their auto insurance company.

It's time for Tampa Bay to begin its own crackdown, collectively send a clear and consistent message to auto insurance fraudsters and draw the proverbial "zero tolerance" line in the sand.

We need to take these criminals off the streets and put them where they belong - behind bars - for our community, and most importantly, for our safety.

Dan Tarantin is president and CEO of Direct General Corporation, which through its family of companies writes and sells auto insurance policies under the Florida No-Fault Auto Insurance and Cash Register Insurance brands.


FOX 13: Warning out for fake car crashes

http://www.myfoxtampabay.com/dpp/consumer/305-fake-car-crash-scam-030510

Published: Friday, 05 Mar 2010, 8:18 PM EST

BY Tanya Arja, FOX 13 News reporter

TAMPA - Staged accidents are becoming the new scam in Tampa.

It's called a "swoop and squat" -- Three cars are involved in the accident, but only two cars know the game.

Insurance companies say you end up rear-ending one of the cars. But the other driver and passengers file hundreds or thousands of dollars in fraudulent insurance claims.

Even if you're not directly involved in the accident, you're still paying for it, explained Amy Moore with Allstate.

"You and I are paying for staged auto accidents, and fraud in general, in the form of higher insurance premiums. It's about $200, $300 more. It can be as much as that on your insurance every year," she told FOX 13.

There were 334 arrests in Florida last year for staged accidents. Tampa is second in the country for this scam. Only Brooklyn, New York is ahead.

Alex Sink, Florida's chief financial officer, said it started down in Miami and has now worked its way to Tampa.

"Many of the bad guys are recruiting innocent new people to our country -- new immigrants," said Sink. "They don't understand our language, they don't understand our laws. All they understand is you get into a fender bender and you get $3,000 payoff. Sounds pretty good, doesn't it?"

Sink is now starting a task force with the help of the FBI to follow the money. She says if we can find out where the money is going, we can head off this problem before it gets bigger.


10Connects: Watch out! Tampa leads in auto insurance fraud

 

http://www.wtsp.com/news/local/story.aspx?storyid=126803&catid=8

Laura Kadechka

March 5

Tampa, Florida --  Look out Miami! Tampa is taking over as the statewide leader when it comes to auto insurance fraud.  This is not a claim to fame the city wants to have and it's not looking much better on the national level, with Tampa ranking second nationwide.

It's believed the surge of auto insurance fraud cases where the scammers stage auto accidents is up in Tampa because they are being squeezed out of Miami by investigators.

Alex Sink, Florida's Chief Financial Officer, joined Tampa Police and Allstate Insurance representatives to promise a crackdown on these scammers.

"It represents millions of dollars of fraud and the reason it's important to us, the everyday person, is because the insurance companies just take the costs of that and put it back into our premiums," said CFO Sink.

Police officers demonstrated a common technique used by the accident stagers known as a "swoop and squat" where an unsuspecting driver is targeted.

But, state investigators say the type of staged accident they see the most in the Sunshine state involves only the criminals themselves.  They stage the accident, file fraudulent claims for injury and damage, and ultimately pocket the money from the insurance company.

'You and I are paying for the cost of auto insurance fraud," said Amy Moore, a spokeswoman for Allstate Insurance.

"An everyday driver that has an auto insurance policy is paying for auto insurance fraud in the form of higher insurance premiums and the estimate is around $200 to $300 annually," Moore added.

If you know of someone who has committed insurance fraud, you could  be eligible for a reward of up to $25,000 if state investigators are able to prove it.   You can file a fraud report on-line with the Florida Department of Financial Services or call the fraud hotline at: 1-800-378-0445.

You can take steps to protect yourself.  Insurance companies advise you to follow cars at a safe distance when you're on the road.  If you get into an accident, be sure to have a disposable camera or your cell phone camera ready to take pictures of the scene, a notepad to take notes about what happened, and collect the driver's information and license plate information and any witness information.  You are also advised to file a report with police and be wary of unsolicited tow truck drivers who arrive on scene.


TAMPA TRIBUNE: Tampa police say staged crashes on the rise

 

By JOSH POLTILOVE | The Tampa Tribune

Published: March 5, 2010

TAMPA - His friend asked him whether he wanted to make some quick money. All he would have to do was be a car crash victim and get medical treatment at a specific clinic.

He accepted.

Josue Baez, 23, of Tampa, later told investigators that he got $500 for playing the role of crash victim, with the promise of $10,000 more after going through with a lawsuit.

Baez was one of the hundreds of people arrested statewide last year in staged crashes; most incidents were in South Florida, but police say staged crashes are increasing in Tampa.

The wrecks are designed to bilk insurance companies, said Alex Sink, the state's chief financial officer.

"It causes all of our insurance rates to skyrocket," said Sink, who attended a Tampa police demonstration of a staged crash today.

She said 30 percent of the roughly 12,000 referrals to the state's insurance fraud division last year were for personal injury protection fraud.

Fraudulent claims account for $200 to $300 in insurance premiums each year per insured driver, Allstate spokeswoman Amy Moore said.

"You and I are paying for it," Moore said.

The so-called victims typically become patients at health clinics that also are conspiring in the scheme, said Cpt. Steven Smith of the state Division of Insurance Fraud. Those clinics could make millions billing for patients who often aren't injured.

Insurance companies reported more questionable claims in Florida last year than any other state, according to statistics compiled by the National Insurance Crime Bureau. Tampa had the second-most such claims reported of any city nationwide.

In one Tampa case, authorities say, Aguedo Diaz, 45, paid people to get in crashes and referred them to specific health care clinics.

Several insurance companies paid a combined $165,415 on claims associated with Diaz's crashes between October 2005 and June 2007.

Diaz was arrested May 31 at Cypress Street and Habana Avenue, 45 minutes after he staged a crash at that intersection, an arrest report states.

He has pleaded not guilty to charges including participation in a staged motor vehicle crash, patient brokering and filing a fraudulent insurance claim.

In Baez's case, the staged crash was supposed to occur March 30 at a red light, but he and his accomplices couldn't find one. Instead, the rear-end crash happened as Baez slowed to turn into a gas station on Himes Avenue.

There was little damage, but they reported the crash.

Investigators say Baez got his $500 and went to a Tampa clinic for acupuncture, massage and heat pack treatments.

Baez said the clinic's owner later had him sign paperwork, telling him "that by doing this, it appeared that he had gone to the clinic for treatment even though he had not gone," an arrest report states.

On June 18, an investigator noticed red flags based on Baez's description of the crash.

Baez was arrested Nov. 18, accused of participating in a staged vehicle crash. He pled guilty to a lesser charge of conspiring to participate in a staged vehicle crash and was sentenced to three years of probation. Adjudication was withheld.

Reporter Josh Poltilove can be reached at (813) 259-7691.


St Pete Times: Staged auto accidents rise in Tampa

 

By Jessica Vander Velde, Times Staff Writer

Published Friday, March 5, 2010

TAMPA — Staged auto accidents are on the rise in Tampa, officials say, and it's affecting car insurance premiums.

Tampa ranked No. 2 in the nation for questionable auto claims, according to National Insurance Crime Bureau statistics for the first half of 2009. Only Brooklyn ranked higher.

In past years, most of Florida's staged accidents occurred in South Florida, but in part because of a crackdown there, Tampa has seen a recent spike, said Florida Chief Financial Officer Alex Sink. In 2009, there were 190 questionable claims in Tampa and 136 in Miami.

An Allstate spokeswoman estimated that fraud causes the average policy holder to pay about $200 to $300 more in premiums annually. Cracking down on the people committing these acts is a top priority for the insurance industry this legislative session.

The most common form of staged accidents in Florida is when a group of people plan a crash and then either carry it out or set up a scene to appear as if there had been a crash. Usually, no innocent drivers are involved, said detective Michael Hennessy, who investigates insurance fraud in Tampa for the Florida Department of Financial Services.


BAY NEWS 9: Staged auto accidents on the rise in Tampa

 

http://www.baynews9.com/content/36/2010/3/5/591386.html?title=Staged%20auto%20accidents%20on%20the%20rise%20in%20Tampa&cid=rss

Friday, March 5, 2010

TAMPA (Bay News 9) -- Authorities are trying to warn Bay area residents about staged auto accidents that puts consumers on the hook for the crimes.

Police call the scam "swoop and squat," and it happens when criminals intentionally cause car crashes, then file claims with insurance companies and pocket the money.

Police said the perpetrators will drive two cars, one right after the other. The first car will hit the brakes, which causes the car in the middle to also hit the brakes. Often, the innocent driver behind them has no choice but to slam into the second car.

This kind of crime happens often in the Bay area. According to the national Insurance Crime Bureau, Tampa ranks first in Florida and second in the entire country when it comes to staged auto accidents.

Allstate Insurance spokesperson Amy Moore said staged auto accidents are happening more and more often, and consumers are the ones who end up paying the price.

"It raises our insurance premiums as much as $200 to $300 every year," she said.

Experts said that, when it comes to avoiding the scam, common sense is the best tool. Drivers should keep plenty of distance between their cars and the ones ahead of them, and they should also pay close attention to what is happening around them.

Drivers who suspect they might be involved in a phony crash are advised to call police and file a report. Put details of the crash in writing, exchange information with the other drivers involved, get contact information from any witnesses, and if possible, take pictures of the crash for evidence.

The state is also offering $25,000 rewards for information on phony claims that lead to an arrest.

Anyone who is convicted of this kind of insurance fraud could go to prison for up to five years.

Auto Insurance Fraud: Florida Must Act Now

This was developed by the Florida Insurance Council to support anti-fraud legislation (HB 1447) proposed during the 2010 session. The bill did not pass, but will be introduced again during the 2011 session. The Legislature did approve $1.2 million for dedicated insurance fraud prosecutors in Orlando and Tampa.

Florida is in the midst of an auto insurance fraud crisis. The Florida Legislature needs to act now, before the crisis becomes an emergency.

The last time Florida faced an auto insurance crisis, some seven years ago, the problem was staged accidents and dishonest clinics, and the epicenter of the problem was Miami-Dade County. Today, the problem is staged accidents and dishonest clinics, and the epicenter of the problem has moved north to Tampa and Orlando.

The kinds of insurance fraud that create hundreds of millions of dollars in unnecessary costs for honest consumers often involve staged accidents, invoices for treatments were not performed, or claims from passengers who weren’t injured or weren’t even in the vehicle at the time of the crash.

The statistics for staged crashes—which are also a good indicator of general trends—may surprise you. For at least the last three years, Florida has led the nation in the number of staged crashes, according to the National Insurance Crime Bureau, with almost twice as many staged crashes as New York State, which is in second place.

The growth in the number of staged crashes over the past three years is disturbing. Staged crashes in Florida were 20 percent higher in 2008 than they were in 2007, and then grew by another 50 percent between 2008 and 2009.

Today, Florida is home to five of the top ten cities for staged crashes: Tampa (ranked second in the country), Orlando (fourth), Miami (fifth), West Palm Beach (seventh), and Hialeah (ninth). In Tampa, the number of staged crashes doubled between 2007 and 2008, and then tripled between 2008 and 2009. The trend in Orlando was almost as dramatic.

The crime bureau statistics tell us that auto insurance fraud is once again a crisis for Florida, and the problem is growing rapidly. That’s why I’m urging my fellow legislators to act now.

The Florida Insurance Council is supporting House Bill 1447 that will attack the problem directly. The bill addresses three core areas:
  • Funding for prosecutors and investigators. Insurance fraud stops growing when we have enough fraud investigators on the streets and fraud prosecutors in the courthouse. A small investment in prosecutions can create tremendous benefits for Florida consumers. Given the state’s budget shortfall, my approach is to create a foundation that can receive voluntary contributions and give grants to state attorneys and regulators to cover some of their costs for insurance fraud prosecutions and investigations.
  • Glitches and loopholes. Public sector and private sector fraud investigators have provided valuable advice on a number of small statutory changes that, taken together, can have a huge impact. For example, when a police crash report has to list all of the passengers involved in a crash, it’s much harder for a clinic to collect charges for treatment of a person who was not actually involved in the crash.
  • Clinic license fraud. As part of an earlier round of insurance fraud legislation, Florida began licensing health care clinics in 2003. Today, according to fraud investigators, many clinic owners fraudulently obtain an exemption from licensure. Clinic license fraud enables felons and scam artists to own clinics—contrary to the intent of the legislators who passed the original licensing law seven years ago—and to use their clinics to facilitate insurance fraud. My bill tries to provide tough economic sanctions for clinic license fraud. The fraudulent clinics will go away pretty quickly when their invoices don’t get paid and their assets may be subject to seizure as contraband.
It is not often in public life that you have the chance to solve a problem before it becomes an emergency, but that’s where we are with auto insurance fraud. If the Florida Legislature acts now, we can protect consumers and maintain a healthy auto insurance market. If we fail to act, things could get very bad very fast.
HB 1447 by Rep. Bryan Nelson
Section-by-Section Summary

(This did not pass during the 2010 session, but was proposed by the Florida insurance Council Fraud Committee and will be reintroduced for 2011. Contact Gary Landry at (850) 386-6668, ext. 234)  

Section 1. Findings and intent
Provides that the act may be cited as the Comprehensive Insurance Fraud Investigation and Prevention Act of 2010. Provides that the intent is to enhance investigation and prevention of fraudulent insurance acts, to provide additional sanctions, and to revise laws that create incentives for fraudulent insurance acts. Includes findings with respect to the increase in auto insurance fraud, regulation of health care clinics, and property insurance issues including sinkholes, mitigation, and replacement cost. (Lines 74-104)

Section 2. Amending s. 316.066, relating to crash reports
Requires law enforcement to use the full form of a crash report (rather than a short form) when a crash involves a vehicle that was transporting passengers other than the driver, and requires the report to include the names and addresses of all passengers. (Lines 108-139)

Section 3. Amending s. 400.991, relating to health care clinic licensure
Requires clinic application and exemption forms to include a notice that knowingly providing a false, misleading, or fraudulent application or document relating to licensure or exemption or compliance with the clinic licensing law is a fraudulent insurance act and may be grounds for discipline by Department of Health licensing boards. (Lines 144-155)

Section 4. Creating s. 400.9933, relating to insurer reports of suspected violations of the clinic licensing law
Provides immunity for insurer reports of suspected violations of the clinic licensing law and exchange of information between insurers (based on the immunity provided by existing law for reports to the Division of Insurance Fraud). (Lines 159-181)

Section 5. Amending s. 443.1715, relating to disclosure of wage information to workers’ comp employer/carrier
Eliminates the requirement that the employer/carrier’s request to the Agency for Workforce Innovation for an injured employee’s wage information be signed by the employee. (Lines 184-207)

Section 6. Amending s. 456.072, relating to grounds for discipline of health care professionals
Provides that it is grounds for disciplinary action for a licensee to knowingly provide false, misleading, or fraudulent applications or documents relating to health care clinic licensure or exemptions or compliance with the clinic licensing law. (Lines 214-219)

Section 7. Amending s. 626.989, relating to the Division of Insurance Fraud
Defines “fraudulent insurance act” to include knowingly providing or submitting false, misleading, or fraudulent applications or other documents relating to licensure as a health care clinic, exemption from licensure, or compliance with the clinic licensing law. (Lines 239-245)

Section 8. Amending s. 627.7011, relating to replacement cost coverage
Provides that in order to reduce the incentives for claims fraud, a residential property policy that includes replacement cost coverage may allow the insurer to hold back the difference between actual cash value and replacement cost until the policyholder repairs or replaces the property. (Lines 254-262)

Section 9. Amending s. 627.70131, relating to a property insurer’s deadline for paying or denying a claim
Provides that a property insurer’s 90-day deadline to pay or deny a property insurance claim applies to the initial claim and also to a supplemental claim. (Line 268)

Section 10. Amending s. 627.706, relating to optional sinkhole coverage
Requires an insurer to make optional sinkhole coverage available at the time the policyholder applies for coverage or, with respect to coverage in effect on 10/1/2010, at the first renewal after 10/1/2010. Provides that the insurer making optional sinkhole coverage available may limit coverage to no more than 25 percent of the Coverage A limit, and that this amount covers both indemnification and expenses. (Lines 298-314)

Section 11. Amending s. 627.7073, relating to sinkhole reports
Provides that the current statutory provision that the findings, opinions, and recommendations of the engineer or geologist are “presumed correct” means that the party disputing the findings, opinions, or recommendations has the burden of proving by a preponderance of the evidence that they are not valid. (Lines 327-331)

Section 12. Amending s. 627.7074, relating to alternative dispute resolution for sinkhole claims
Provides that the neutral evaluation process does not supersede the appraisal clause, if any, of the insurance policy. (Lines 341-342)

Section 13. Amending s. 627.711, relating to notice of mitigation discounts
Provides that an insurer must accept a mitigation verification form only if signed by specified inspectors. (Lines 379-395)

Requires the inspector to certify or attest that he or she personally inspected the structure. (Lines 396-398)

Specifies what constitutes misconduct on the part of an inspector and provides for disciplinary action by licensing boards and the Office of Insurance Regulation. (Lines 399-428)

Revises penalties for fraudulent mitigation forms. A first violation becomes a second degree misdemeanor (currently a first degree misdemeanor), but subsequent violations are felonies. (Lines 429-437)

Requires the mitigation inspection form to include a strong notice relating to insurance fraud, including a statement that mitigation inspection fraud may be a felony under 817.234 and is a misdemeanor under 627.711 for a first violation and a felony for a subsequent violation. (Lines 438-455)

Requires policyholders who benefit from fraudulently-obtained mitigation discounts to repay the value of the wind deductible and any discounts, going back to the first application of the discount. (Lines 457-467)

Section 16. Amending s. 627.736, relating to PIP claims payments
Requires a certification form before payment to a licensed clinic, an exempt clinic owned by practitioners, or an exempt clinic owned by a hospital. (Lines 537-550)

Provides that the deadline for payment is tolled with respect to any portion or portions of a claim for which the insurer has a reasonable suspicion of a fraudulent insurance act (as defined in 626.989), provided the insurer notifies the policyholder that it is investigating the claim. (Lines 598-605)

Provides that benefits are not due or payable to or on behalf of any person (rather than “an insured person”) who has committed a fraudulent insurance act. (Lines 620-628)

Provides that benefits are not due or payable to or on behalf of any person (rather than “an insured person”) who has committed a fraudulent insurance act. (Lines 629-645)

Provides that the insurer is not required to pay any charges from a person who knowingly submits or attempts to submit false or misleading information in connection with a particular insured (but does not affect charges from other providers with respect to that insured or charges from that provider with respect to other insureds). (Lines 656-687)

Provides that an insurer is not required to pay a claim from a provider that is not in full compliance with the clinic licensing law and other applicable licensing or regulatory requirements. Provides for examination under oath in the course of investigating compliance. (Lines 688-700)

Requires the provider to submit to the insurer, within 14 days after initial contact with the injured person, an initial medical report outlining medical history, examination findings, and preliminary diagnosis. (Lines 736-744)

Section 15. Amending s. 932.701, relating to contraband forfeiture
Provides that the contraband forfeiture law covers tangible and intangible property used in the commission of a fraudulent insurance act and any real or personal, tangible or intangible property derived from the proceeds of a fraudulent insurance act. (Lines 812-831)

Section 16. Effective date
Provides that the bill takes effect October 1, 2010. (Line 832)