Audit suggests possible fraud happening with State’s insurance fraud fund

SANTA FE, N.M. (KRQE) – A new report questions if a major chunk of change, collected by the state to investigate insurance fraud, has been misused.

The amount in question is $1.5 million. It sounds ironic – a chance that fraud is taking place with a fund meant to investigate fraud.

KRQE News 13 spoke with John Franchini, the state superintendent of insurance, on this possibility.

“We don’t think that there is, but we don’t think it’s done right. We got to correct it,” he said.

By law, the state collects fees from authorized insurers in our state — about $1.5 million in total — with the purpose of investigating home, business, automobile and medical insurance fraud. Also by law, there should be a standalone account for that money to keep detailed track of how it’s being used.

However, Franchini says there’s not a standalone account. He says the money is not missing, rather it’s floating in the general fund for the Office of the Superintendent of Insurance (OSI).

In search of accountability, an outside agency was brought in to investigate. Franchini says this investigation has been years in the making.

A copy of this initial audit released days ago suggests there’s a high risk of fraud, embezzlement, and/or misappropriation or misapplication of monies for the fraud fund. That’s because, as the report alludes, such poor record keeping in OSI.

“The audit, though, was a little critical of us,” Franchini said. “If you haven’t looked at it all yet, you’re going to say that. I’m not saying it’s wrong. I’m not saying it’s right.”

It’s why, Franchini says, his office will be conducting a second, more thorough audit for solid answers.

On Friday, OSI reached out to State Auditor Tim Keller, alerting him of the initial investigation and the second audit will soon be underway. That second audit will be forwarded to Keller when completed, which is expected to happen before the end of the year.

You can read the initial audit here.

In response to the issue with OSI, Keller sent KRQE News 13 this statement:

We raised concerns about the Office of the Superintendent of Insurance’s internal processes in their last financial audit and will continue working to get to the bottom of these problems.

The UK’s top 10 crash-for-cash car insurance scam hotspots REVEALED

NEW research has revealed the UK cities that have the highest number of crash-for-cash scams.

The data shows the top 10 hotspots where fraudsters deliberately collide with the cars of innocent drivers in bid to claim car insurance payout.

 The places in the UK where you are most likely to encounter a crash-for-cash scam
The places in the UK where you are most likely to encounter a crash-for-cash scam

The Insurance Fraud Bureau (IFB) data also reveals the 30 postcode districts, revealing the worst-hit areas to be located in the Midlands and the north west.

Birmingham has the highest rate in the country, with 10 separate postcodes featuring in the top 30, while both Manchester and Bradford contain five different postcode districts with an incredibly high incident rate.

According to the study, the UK’s worst area for the crime falls under Birmingham postcode B8, closely followed by B6 and B10.

Bolton, Sheffield and London all feature on the list, while Blackburn came in 10th with just one postcode district, BB9, showing a high prevalence of crash-for-cash crimes.

The study estimated this type of scam costs the insurance industry as much as £336million each year – mainly through whiplash injury payouts.

Ben Fletcher, IFB director, said: “These scams may seem to some to be a harmless way to beat the system and get an easy pay out with minimal risk.

 'Crash for cash' scams cost the insurance industry more than £330 million each year


‘Crash for cash’ scams cost the insurance industry more than £330 million each year

“The reality is that not only do those people now stand a very good chance of getting caught and facing the consequences, but these scams put other motorist’s lives at risk.

“Fraudsters are taking vehicles out on public roads and forcing innocent people into needless collisions.


The IFB noted that if you notice any of the following triggers, it may be a sign that someone is trying to scam you with a traffic accident:

  • The other driver being uncharacteristically calm for someone that’s just been involved in a car accident
  • The driver having already written down their insurance details prior to the accident
  • Any claimed injuries appearing to be completely at odds with the force of the impact

“Not only does that present a real risk of injury, but sadly we know of at least one fatality that has occurred as a result of these incredibly dangerous and reckless incidents.

“These hotspots may be the worst affected areas for these types of scams, but crash-for-cash collisions can happen anywhere, so it’s imperative that road users are aware of them, exercise appropriate caution and if they believe they’ve been a victim, report it as soon as they can.”

The IFB recommends anyone who feels they have fallen victim to one of these crimes should attempt to record as much information as possible and report it to local police, as well as getting in contact with the IFB’s Cheatline either online or by phone.

Birmingham tops ‘crash for cash’ postcodes hotspots

A car crashImage copyright
Getty Images

Image caption

“Crash for cash” occurs when a road accident is caused by a fraudster

Birmingham has topped the UK’s “crash for cash” postcode league – the second time in a year the city has featured in a table of hotspots for the crime.

The scams are run by fraudsters who manufacture collisions with other road users, hoping to profit from insurance claims.

In the table, compiled by the Insurance Fraud Bureau (IFB), Birmingham had 10 of the top 30 postcodes for the crime.

Manchester, Bradford, London and Oldham also featured on the list.

‘Nationwide problem’

In total, Birmingham has 10 postcodes on the list. Washwood Heath, Aston and Small Heath were the three worst postcodes for the crime in the UK.

In Bradford, Frizinghall and Manningham came joint fourth for the numbers of fraudulent claims, while in Manchester the M8 postcode, which includes Cheetham Hill, was ranked sixth.

A survey carried out by insurance company Aviva in 2016 said 25% of its 3,000 crash for cash claims last year were in Birmingham.

“We don’t know the exact reason Birmingham features so heavily in these surveys,” said Ben Fletcher, the director of the IFB, a not-for-profit organisation set up to detect fraud.

“Obviously, this is a nationwide problem and we have investigations that range from Kent to the North East, but large urban areas tend to be the focal points for these kind of crimes.”

The data applies to the past 12 months. In total, there were 55,573 personal injury claims linked to scams in the UK, the IFB said, costing the insurance industry a total of £340m a year.

Image caption

The number of induced accidents is stabilising, the IFB says

Tell-tale signs that you’ve been in a “crash for cash” scam:

  • The other driver seems suspiciously calm
  • They have already written down their insurance details before the accident happened
  • Any injuries appear to be completely at odds with the force of the impact
  • If you think you have been targeted, note as much information as you can, take photographs and call the police to report your suspicions


RAF engineer Richard Turner, from Cosford in Shropshire, was caught up in a cash for crash scam.

In October 2014 he was driving over a traffic island on the A41, following a black BMW and an older car.

The BMW suddenly changed lanes, then the other car slammed on the brakes, forcing Mr Turner to crash lightly into the back of it.

His suspicions were raised when the male occupants of the vehicle exited clutching their necks.

Image copyright
Kate Turner

Image caption

Richard Turner was penalised by his insurance company after being the victim of the scam

As he exchanged details, Mr Turner tried to ring the other driver’s number – only to discover it did not work.

He also noticed the driver seemed uncomfortable with him taking photographs of the damage and calling the police to report the crash.

Mr Turner drove home but returned to the island a short time later when he noticed the same cars repeating the same trick three times.

He filmed them, rang the police and posted the incident on social media.

One man who contacted him on Facebook said the scammers had forced a crash with his wife, who was heavily pregnant at the time.

“This is not a victimless crime,” said Mr Turner. “Although I told the men I knew it was a scam when they tried to settle the claim, I still had to pay around £400 a year extra to my insurance company in case they did try to force a claim.

“And in the case of the pregnant driver, a crash could have been catastrophic.”

The top crash for cash locations in 2017:










Source: The not-for-profit organisation Insurance Fraud Bureau

5 South Florida lawyers arrested in alleged insurance fraud scheme

(l-r) Attorneys Adam Hurtig, 46, Alexander Kapetan, 44, Vincent Pravato, 48, Steven Slootsky, 57, and Mark Spatz, 58. (Photo: Broward County Sheriff's Office)
(l-r) Attorneys Adam Hurtig, 46, Alexander Kapetan, 44, Vincent Pravato, 48, Steven Slootsky, 57, and Mark Spatz, 58. (Photo: Broward County Sheriff’s Office)

Detectives arrested five South Florida personal injury attorneys accused of participating in an insurance fraud with lucrative kickbacks.

Arrested were Vincent Pravato, 48, and Mark Spatz, 58, of Davie; Adam Hurtig, 46, of Fort Lauderdale; Alexander Kapetan, 44, of Lighthouse Point; and Steven Slootsky, 57, of Boca Raton.

Investigators say in most cases, the personal injury lawyers paid accomplices $500 to $1,500 per client to refer “unsuspecting vehicle accident victims” to make insurance claims.

Related: New weapons in the war on fraud

Bill auto insurance companies

“The attorneys would in turn refer the accident victim to a health care facility in exchange for a cash kickback of $1,500 to $2,500 per patient,” according to a statement Thursday from the Broward Sheriff’s Office. “After the patient was brokered to the health care facility, the facility would provide treatment and bill the auto insurance companies for claims covered by the PIP benefits.”

The alleged scam reportedly yielded more than $521,000 from May 2015 to December 2016.

Perhaps the most prominent among those arrested is Kapetan, a Harvard University alumnus and founding partner of Wites & Kapetan. He faces nine counts of fraud for alleged violation of the patient-brokering law and one count of using a two-way device to facilitate a felony. His attorney, Eric Schwartzreich of Schwartzreich & Associates in Fort Lauderdale, said Kapetan committed no crime.

“These guys have been lumped together. They don’t know each other,” Schwartzreich said of the five attorneys arrested. “My client is not charged with any solicitation. … He’s not charged with soliciting anyone for anything, nor does he know any of the other parties that have been arrested. He’s not part of any ring, any organization.”

Kapetan has continued to practice but reported his arrest on felony charges to the Florida Bar. His attorney says the incident has taken a toll, and led to a 24-hour incarceration for Kapetan after his arrest.

Related: The art of bodily injury investigations

“They came and arrested them right when the storm (Irma) was coming,” Schwartzreich said. “After the governor had issued a state of emergency … they were all required to turn themselves in. … In the middle of the storm, they had him arrested.”

Kapetan’s other attorneys are prominent ethics lawyer Brian Tannebaum, special counsel to Bast Amron in Miami, and William Shepherd of Holland & Knight.

“We’re confident he’s going to be found not guilty of these allegations,” Schwartzreich said.

None of the other five attorneys charged commented on their arrest.

Hurtig referred inquiries to his attorney, Bruce A. Zimet, who did not respond to requests for comment.

Multiagency collaboration

Investigators, including Detectives Kristy Frederick and Mike Freeley, spent more than a year in a multiagency collaboration. Broward deputies teamed with the Fort Lauderdale Police Department, which is part of the Organized Crime Unit in the Sheriff’s Office, and with the Department of Financial Services, National Insurance Crime Bureau, the Office of Statewide Prosecution and the Broward State Attorney’s Office.

The operation also led to the arrest of five other accused accomplices: Elvira Perchitti, 53, and James Perchitti, 61, of Port St. Lucie; Joaquin Barreda, 39, of Plantation; Mark Eskin, 62, of Boca Raton; and Richard Kist, 36, of Jupiter.

Charges include organized fraud, criminal solicitation and patient brokering.

Samantha Joseph ( is a litigation reporter for ALM Media and the Daily Business Review. Find her on Twitter: @SJosephWriter.

Originally published on Daily Business Review. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

California Workers’ Comp Division Suspends 6 Medical Providers for Fraud

The California Division of Workers’ Compensation has suspended six more medical providers from participating in the state’s workers’ comp system, bringing the total number of suspended providers to 38.

The suspensions were made possible by the passage last year of Assembly Bill 1244, which requires the DWC administrative director to suspend any medical provider convicted of a crime involving fraud or abuse of the Medi-Cal or Medicare programs or the workers’ comp system, a patient, or related types of misconduct.

DWC Acting Administrative Director George Parisotto issued orders of suspension against the following providers:

  • Jeffrey Campau and Landen Mirallegro of Yorba Linda, co-founders of the medical equipment company Aspen Medical Resources, MRI diagnostic facility Elite Mgmt. LLC dba Elite Diagnostics, and an MRI services company, Regional Medical Services LLC. Campau and Mirallegro pled guilty in Orange County Superior Court on May 5 to medical insurance fraud for their involvement in an overbilling scheme in which they defrauded insurance companies of more than $70 million. Along with their co-defendant, Campau and Mirallegro agreed to pay over $8 million in restitution to several insurers and self-insured employers, and to voluntarily dismiss liens of nearly $140 million, in the case involving Aspen Medical Resources.
  • Simon Hong of Brea, a medical clinic operator who on Oct. 19, 2016 was found guilty by a federal jury in Orange County of 19 counts of health care fraud, illegal kickbacks, and identity theft involving the Medicare program.
  • Chi Hong Yang of San Gabriel, who pled guilty in Kern County Superior Court on Aug. 2, 2013 to conspiracy to commit insurance fraud, involving among other things billing and obtaining payment for services not provided. Yang surrendered his physician’s and surgeon’s certificate earlier this year.
  • Rafael U. Chavez of Rancho Cucamonga, due to revocation of his certification as a physician assistant by the Physician Assistant Board of California on June 19, 2014.
  • Wendell Wenneker of Napa, whose physician’s and surgeon’s certificate was revoked on June 2 by the Medical Board of California.

AB 1244 requires the DWC administrative director to suspend any medical provider, physician, or practitioner from participating in the workers’ comp system in cases in which any of the following is true: They were onvicted of a felony or misdemeanor involving fraud or abuse of the Medi-Cal or Medicare programs or the workers’ compensation system, fraud or abuse of a patient, or related misconduct; they were suspended due to fraud or abuse from the Medicare or Medicaid programs; or the provider’s license to provide health care has been surrendered or revoked.


Five plead guilty in Collingwood Boulevard home fire case

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Five of the six people charged with setting fire to a Collingwood Boulevard home to collect insurance proceeds entered guilty pleas Thursday in Lucas County Common Pleas Court.

Tazhianna Dean, 22, of the 2800 block of Kendale Dr.; Marcus Cosper, 24, of the 2000 block of Clinton St.; Matthew Merriweather, 44, of the 3200 block of Collingwood Boulevard, and Jennifer Parkhurst, 53, also of the 3200 block of Collingwood each pleaded guilty to insurance fraud.

Jamel Gaines, 29, of the 2300 block of Chestnut Street pleaded guilty to complicity to aggravated arson, insurance fraud, and trafficking in heroin.

Gaines, who prosecutors said arranged the scheme, faces up to 11 years in prison when he is sentenced Nov. 21 by Judge Ian English, while the others face up to 18 months in prison for insurance fraud, a fourth-degree felony. As part of a plea agreement, additional charges of aggravated arson are to be dismissed at the time of sentencing.

Prosecutors said the group conspired to set fire to 3235 Collingwood Blvd. Feb. 9 in order to collect on insurance policies. The fire caused an estimated $40,000 in damage to the structure and $10,000 to the contents.

Also charged in the case is Brittnee Messano, 32, of the 3200 block of Collingwood Boulevard whose case is set for trial Monday. Charges previously were dismissed against Anthony Jones, 22, in the case.

Contact Jennifer Feehan at or 419-213-2134.

Chiropractor charged with insurance fraud: AG

Lawrence Scott Herman 

A Franklin County chiropractor is again facing criminal charges, this time for defrauding three insurance companies out of approximately $150,000 in bogus billing scheme, according to authorities.

On Tuesday, Lawrence Scott Herman, 51, who lives in Frederick, Md., and owns and operates Herman Chiropractic in Waynesboro, was indicted by a grand jury on charges of corrupt organizations, theft by deception and insurance fraud, according to paperwork filed in Cumberland County by the Pennsylvania Attorney General’s office.

The indictment contends Herman falsely billed Highmark, Capital Blue Cross and Erie Insurance for office visits and treatments from March 2010 to April 30, 2014.

In December, two employees of Herman, Joshua M. Rosinski, 37, of the 200 block of Brook Meadow Drive, Mechanicsburg, and Joseph P. Brady Jr., 44, of the first block of Romance Lane, Chambersburg, were indicted on charges they submitted fraudulent claims for treatments they provided to each other and their families.

A grand jury found that many of the dates that the doctor provided chiropractic care coincided with dates when either the patient or chiropractor was out of town, in the hospital or otherwise indisposed.

On some of the occasions, the people were actually giving birth, on a cruise, or taking a trip to Disney World, records state.

Brady told the grand jury that he was “instructed” by someone at the offices to submit the bills and added that “it wouldn’t have happened without instruction from (Herman),” according to the indictment. 

Brady couldn’t remember who told him to submit the bills, records state.

Rosinski told the grand jury that Herman viewed insurance companies as “bad entities” and told employees “the more we could take from them was better,” records state.

Herman is currently free from the Cumberland County Prison on $100,000 unsecured bail.

A preliminary hearing has been scheduled for Nov. 9 before District Judge Richard S. Dougherty.

In 2014, Herman was sentenced to 5 months in federal prison after a guilty plea to a charge of making false statements in health care matters.

Do Acts Of Health Insurance Fraud Always Constitute Criminal Offences Under The Emirati Penal Code? – Food, Drugs, Healthcare, Life Sciences

Health Insurance Fraud, Abuse, Misuse and Mistakes and
Errors impose financial burdens not only on Insurers and Insured
Persons, but on Healthcare Providers, the government of Abu Dhabi,
and Employers and Sponsors in the Emirate of Abu Dhabi. In certain
cases, they also put at risk patient health and the quality of
1. Indeed, combatting Health
Insurance Fraud, Abuse, Misuse and Mistakes and Errors is not only
intended to safeguard the interests of Insurance Companies by
preventing financial losses and ensuring compensations, but also to
safeguard a professional and ethical medical environment. More
importantly, combatting Health Insurance Fraud intends to deter
persons from committing such acts usually constituting criminal

In general, Health Insurance Fraud, Abuse, Misuse and Mistakes
and Errors are subject to administrative2 and
civil3 recourses. More particularly, acts of Health
Insurance Fraud may be subject to criminal prosecution since, as
previously mentioned, they usually constitute criminal

The Law does not contain any definition of Health Insurance
Fraud. However, the Health Authority of Abu Dhabi (the
HAAD“) in its Insurers’ Manuel has
defined Health Insurance Fraud as “an intentional act of
deception by any person which has as its purpose the objective of:
(i) obtaining a (financial or other) benefit or advantage related
to the operation of the Health Insurance Scheme; or (ii) causing or
exposing another person to a (financial or other) loss or
disadvantage related to the operation of the Health Insurance
Scheme, whether or not that act in fact achieves its intended
4. According to this definition:

(1) The perpetrator of Health Insurance Fraud can be
any person“. In practice, such acts may be
committed by healthcare providers, healthcare professionals,
insured persons, insurance companies, third party administrators,
brokers, agents, or any other persons. (2) Health Insurance Fraud
is necessarily an intentional act, i.e., the perpetrator of Health
Insurance Fraud must be fully aware that he is committing

(3) The perpetrator may have as objective the obtaining of a
financial (or other) benefit or causing or exposing another person
to a financial (or other) loss or disadvantage. Thus, obtaining a
personal benefit is not a pre-requisite.

(4) The motives of the perpetrator are not taken into account.
Indeed, having noble motives (e.g. a doctor helping a patient by
billing an uncovered service as a covered service, an insured
person lending his insurance card to his neighbor) does not change
the fact that the concerned person intended to defraud the
insurance company.

(5) The perpetrated acts may be qualified as Health Insurance
Fraud irrespective of achieving the intended purpose. In other
words, such acts constitute Health Insurance Fraud as long as the
perpetrator intended to commit Health Insurance Fraud in order to
obtain a financial (or other) benefit or to cause or expose another
person to a financial (or other) loss or disadvantage, irrespective
if as a result of such acts he obtains any financial (or other)
benefit or if he causes or exposes another person to a financial
(or other) loss or disadvantage.

According to the Insurers’ Manuel issued by the HAAD, the
latter may issue a document which will detail a non-exhaustive list
of examples of Health Insurance Fraud, Abuse, Misuse and Mistakes
and Errors5. Since it is impossible to set out an
exhaustive list of examples of Health Insurance Fraud, we can only
list few common examples: (a) billing unperformed
services; (b) undertaking uncovered services and
billing them as covered services; (c) declaring a
fake identity to subscribe to insurance schemes restricted to low
income employees; (d) inflating procedures and
thus bills; (e) keeping people longer than
necessary in a hospital or an intensivecare unit;
(f) charging for a more complex treatment than
actually performed; (g) forging medical reports to
obtain undue reimbursements (h) providing fake
medical certificates; (i) adjustment of the
medical fees by a patient when he directly submits the invoices to
the insurance company; (j) creation of false
medical histories (etc.).

As previously mentioned, acts of Health Insurance Fraud usually
constitute criminal offences. One of the most commonly committed
criminal offenses is Fraud under the Emirati Penal Code, according
to which Fraud is committed when the perpetrator “succeeds
in appropriating, for him or for others, movable property, a deed
or a signature thereon, cancellation, destruction or amendment
thereof through deceitful means or use of false name or capacity,
whenever this leads to deceit the victim and cause him to give
6. In light of this definition, the
qualification of Fraud requires (a) the
fulfillment of fraudulent acts in order to (b)
obtain a personal financial (or other) benefit or benefits for
others, provided that such acts (c) lead to the
deceit of the victim and cause him to give away.

By comparing the definition of Fraud under the Penal Code and
the definition of Health Insurance Fraud, we can stress on the
following two main distinctions:

(a) As regards the objectives of the perpetrator: The objective
of obtaining a personal financial (or other) benefit or benefits
for others is a pre-requisite for the qualification of Fraud under
the Emirati Penal Code, while the objective of Health Insurance
Fraud can be the obtaining of a personal benefit
or causing or exposing another person to a
(financial or other) loss or disadvantage.

(b) As regards the consequences of the perpetrated acts: The
perpetrated acts may be qualified as Health Insurance Fraud
irrespective of achieving the intended purpose, while fraudulent
acts under the Emirati Penal Code must lead to the deceit of the
victim and the appropriation of a personal financial (or other)
benefit or benefits for others.

Based on the above comparison, it is clear that the acts of the
perpetrator of Health Insurance Fraud do not automatically fall
under the qualification of Fraud under the Penal Code.

In order to be qualified as Fraud under the Penal Law,
(a) the objective of the perpetrator must be the
obtaining of a personal financial (or other) benefit or benefits
for others, and (b) the committed
acts must achieve their intended purpose (i.e. the deceit of the
victim and the appropriation of a personal financial (or other)
benefit or benefits for others).

Other criminal offences are usually committed in order to
defraud the health insurance scheme, the most common of which is
forgery7 which is an act of alteration through one of
the methods specified under Article 216 of the Penal Code,
resulting in a prejudice to the victim. For example, some
healthcare professionals forge their medical certificates or
statements8 in order to bill uncovered services as
covered services, or to obtain undue reimbursements for services
not performed. In other instances, some insured persons forge their
identity documents9 to subscribe to insurance schemes
restricted to a certain category of employees.

In practice, most of the acts of Health Insurance Fraud usually
fall under the qualifications of Fraud and/or Forgery. However,
acts of Health Insurance Fraud, which are always subject to
administrative and civil recourses under the Health Insurance
Law10 and the Civil Transactions Code, do not
necessarily constitute criminal offences. Therefore, it is strongly
recommended to undertake, on a case by case basis, an in-depth
legal and factual assessment in order to ensure that the committed
acts could be qualified as criminal offences. Such assessments will
allow the claimant to avoid any potential liabilities for false


1 Insurers’ Manuel, Health Authority of Abu Dhabi, p.

2 Under Article 21 of the Executive Regulations for Law
No. (23) of 2005 regarding the Health Insurance Scheme in the
Emirate of Abu Dhabi.

3 Under Article 282 et seq. of the Emirati Civil
Transactions Code.

4 Insurers’ Manuel, Health Authority of Abu Dhabi, p.

5 Insurers’ Manuel, Health Authority of Abu Dhabi, p.

6 Article 399 of the Emirati Penal Code.

7 Subject to Articles 216 et seq. of the Emirati Penal

8 Which constitutes a felony under Article 219 of the
Emirati Penal Code pursuant to which “shall be sentenced
to imprisonment for a period not exceeding five years, every
physician or midwife knowingly issuing a forged certificate or
statement concerning pregnancy, delivery, disability, death or
other matters related to his profession, regardless of the fact
whether this act is the result of a wish, recommendation or

9 Which also constitutes a felony under Article 217 of
the Emirati Penal Code pursuant to which “Unless otherwise
provided, forging an official written instrument shall be
sanctioned by imprisonment for a term not exceeding ten years and
forgery of an unofficial document shall be punished by

10 Law No. (23) of 2005 regarding the Health Insurance
Scheme in the Emirate of Abu Dhabi.

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Solicitor, pair posing as physiotherapists arrested over Sydney insurance scam

A Middle Eastern crime gang is suspected of carrying out $11 million worth of insurance fraud involving staged car accidents and faked injuries.

A 43-year-old solicitor and two men posing as physiotherapists, aged 30 and 31, were arrested on Wednesday, accused of playing roles in the scam.

Fraud and cybercrime squad commander Arthur Katsogiannis said the syndicate staged car accidents before submitting dodgy insurance claims for fake injuries.

With lawyers, medical professionals and other players all involved, he said the group operated as a one-stop shop while carrying out the scam.

“It’s very sophisticated, very well organised, it’s in the upper echelons of organised crime … it’s an organised syndicate who is very aware of the way that this particular scheme operates and they use that expertise,” Detective Superintendent Katsogiannis told reporters.

“This particular fraud is costing taxpayers of NSW hundreds of millions of dollars each year.

“We believe some of the individuals we’ve arrested were key players … I believe we have broken the back.”

The solicitor has been charged with directing a criminal group and is due to face Burwood Local Court on Wednesday.

It will be alleged he pulled the strings of the syndicate and provided advice to help them submit more than $1 million in fraudulent claims.

There has been a 25 per cent drop in claims for soft tissue injuries in motor vehicle accidents since police started investigating the syndicate.

Det Supt Katsogiannis says it is a sign the syndicate knows the jig is up.

Investigators are combing through past claims to snag more offenders tied up in the scheme.

“It’s not over yet. What I can say is we know there are others out there,” Det Supt Katsogiannis said.

“Like any element of society there are those who are purely after greed and making money the easy way and we want to put a stop to it.”

Police have so far arrested 16 people and laid more than 120 charges over the insurance rort.


Former insurance broker must pay fraud victims $1.8 million, DA says

A Middle Island former insurance broker was sentenced to between 3 and 9 years in prison after pleading guilty to grand larceny and fraud, Suffolk County District Attorney Thomas Spota said Tuesday.

Kimberly Graziano, 44, who owned and operated Islandia-based K.A.G. Insurance Brokerage Inc., must also pay $1.8 million in restitution to her victims.

Prosecutors said Graziano, through her company, defrauded clients and several insurance carriers such as Progressive Insurance Company, MetLife and Tudor.

Suffolk officials said Graziano falsified contracts by inducing Alliance Premium Funding Corp. in Floral Park into financially backing policies for her corporate clients, without ever actually purchasing insurance coverage for them.

Graziano and K.A.G. Insurance Corp. pleaded guilty to nine charges of grand larceny, first-degree scheme to defraud, three counts of second-degree criminal possession of a forged instrument, fifth-degree insurance fraud and a violation of state insurance law.

Investigators discovered nearly 30 forged financing contracts totaling more than $1 million in stolen funds from Alliance Premium, prosecutors said.

In another scheme, Graziano collected premium payments and falsified insurance cards and certificates of liability insurance coverage to convince her customers they had insurance coverage, when they, in fact, did not.

“Her schemes began to unravel when her clients’ vehicle registrations were suspended by DMV(s) for lapses in insurance coverage, and claims made on commercial insurance policies were being denied by the insurance carriers for lack of a policy,” Spota said in a statement.

Despite not renewing her license for K.A.G. in 2015, her business continued operating, engaging in illegal schemes that victimized dozens of towing companies, truck operations and snow removal businesses.

Many of them lost business and were issued DMV fines as well as tens of thousands of dollars in fines for operating without valid workers’ compensation coverage.

“This broker violated the trust of the companies she defrauded and also the good faith of her clients, who believed she was providing insurance coverage for their vehicles,” New York State Department of Financial Services Superintendent Maria T. Vullo said in a statement.