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Kentucky has become the 30th state to enact a law outlawing the manufacturing, sale or installing of counterfeit airbags in any vehicle. |
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The bill was recently signed into law by Gov. Andy Beshear. Enacting these laws across the nation has been a joint effort by the Coalition and American Honda Motor Company. Among the new law’s provisions are fines of up to $5,000 per violation, and jail sentences up to one year.
Vehicle photo inspections remain the subject of ongoing legislative reform efforts in New York. After attempts failed to change the current inspection law in prior years, this year a new group called NY First was created to support legislation allowing New York consumers to buy comprehensive and collision coverage without the current vehicle photo inspection requirement. The bill is co-sponsored by State Sen. Neil Breslin and Assemblyman Ken Zebrowski. Termed the Auto Insurance Consumer Relief Act, the bill has passed the New York State Assembly and is now before the Senate Committee on Insurance. As with other issues, Coalition members have varying stances on the bill. Many Coalition members — including New York insurers — support the change. Other members such as CARCO, which provides in-person vehicle inspections, argue that vehicle inspections are an important tool to combat insurance fraud in New York.
The Coalition’s State of Insurance Fraud Technology Study was the topic of discussion at this week’s meeting of the Kentucky Insurance Fraud Council, presented by the Insurance Institute of Kentucky. Attendees included officials from the state DOI, insurers and other interested parties. Kim Kuster from research study partner the SAS Institute joined the Coalition’s Matthew Smith to summarize highlights of how insurers use technology to fight insurance fraud. With the survey being completed every two years over the past decade, insurer tech trends also show more reliability and dependability as a major component of identifying potentially fraudulent activities.
Minnesota lawmakers are moving forward on an omnibus funding bill that would strengthen the state fraud bureau housed in the Department of Commerce. The bill cleared the House Ways & Means Committee this week and is headed to a floor vote. The anti-fraud provisions include hiring five new investigators. It also would expand the bureau’s jurisdiction to include financial fraud beyond solely insurance fraud. Sponsors also argue the bureau needs more General Fund dollars to support future work outside of insurance fraud. Current anti-fraud efforts are funded by insurer assessments. If passed, the bill would also provide more funding for auto-theft prevention efforts.
A record number of 41 insurers participated in the Coalition’s recently completed 5th Benchmarking Study conducted in conjunction with Aon. Those companies represent 40% of all property and casualty premiums written in the U.S. On Wednesday more than 60 insurance leaders from participating companies took part in a webinar where the findings were presented by Vince Albers of Aon who oversaw the study and compiled the results. In the coming weeks a summary of the Benchmarking Study findings will be published for review by all Coalition members. The Coalition, and especially our Research Committee, continue to believe this study is a valuable way for P&C insurers to assess key issues related to staffing, financial resources and training so they are better equipped in the fight against insurance fraud.
May 23-27 are the dates for the special session of the Florida legislature to address property insurance losses and rates in the Sunshine State. The Governor issued a proclamation calling for the session and setting the dates on Tuesday. What can, and will, be accomplished remains to be seen. While the Governor’s proclamation cites “frivolous lawsuits” and “insurance company underwriting losses,” it sadly fails to even contain the words “fraud” or “insurance fraud.” Florida CFO Jimmy Patronis did issue a statement urging legislators to act: “Since I’ve been in office, we’ve worked every year to combat fraud, fight rising rates and protect consumers and my office stands ready to provide policy support to aid the Governor and the Legislature in tackling this important issue." Time will tell, but hopefully the Governor and legislators will focus on the need to fight fraud to truly help and protect Florida consumers.
Coalition co-founder the Consumer Federation of America issued its latest newsletter yesterday. It led with a story about their request for state insurance departments to investigate potential racial bias in claims handling and anti-fraud efforts. CFA directed a letter last month to all state regulators requesting they act following a story on such alleged practices in the New York Times. The story and CFA’s request were a frequent topic of discussion at the NAIC’s recent spring conference, where the issue received extensive attention and discussion at various committee and task force meetings. According to CFA’s Michael DeLong, “exposing and fighting insurance fraud is critical for well-functioning insurance markets and for preventing escalating rates. But fighting fraud must never be an excuse for unfair denials of claims or discrimination.” DeLong and the Coalition’s Matthew Smith both serve as Consumer Liaison Representatives to the NAIC.
Note: Texts of anti-fraud bills are available on the Coalition’s website here.
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Join us at our 2022 Midyear Meeting on June 6-7 in Orlando!
Click here to register today! |
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It’s been a long time coming — a definitive update on how much insurance fraud steals every year, across all lines. |
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We’ll unveil a new and larger fraud estimate at the Coalition’s Midyear Meeting, June 6-7 in Orlando. For years, the Coalition’s familiar $80-billion loss estimate has been a benchmark. We now think fraudsters have been stealing much more. You’ll learn the definitive new fraud estimate — for each line — after a year-long study by a Coalition task force of your peers. Register today to attend the unveiling in person. You’ll also network with fellow decisionmakers, learn the newest fraud trends, plus updates on court decisions that directly affect your work — and much more.
Spiraling homeowner claims abetted by sleazy contractors and adjusters have driven Florida’s home-insurance market into a crisis. An editorial in the Palm Beach Post, however, speaks to broader concerns that could put fraud fighters in other states on alert: “… state attorneys are not always prosecuting fraudulent claims, even when state regulators pursue investigations. This disincentivizes fraud investigators from utilizing their limited resources on building cases against many bad actors,” the Post warns. We are all paying the price with fewer choices and higher premiums. We need to commit to enforcing property insurance laws and giving them appropriate time and resources to make an impact.”
The Coalition’s Fraud Risk Management Task Force kicked off on April 22. Fraud risk professionals and leaders from 12 Coalition member insurers began collaborating to share best practices that will contribute to the collective maturity of fraud risk management — thus strengthening the fight against all forms of insurance fraud. Fraud risk management expert and former SIU leader James Ruotolo summarized the five fraud risk-management principles in a guest presentation. Task force member insurers also benchmarked their fraud risk management programs against the five principles. The task force meets monthly — with roundtables delving more deeply on each risk management principle. The next meeting is scheduled for 4 pm (EST) May 26, focusing on fraud risk governance. All Coalition member organizations are welcome to participate. Member insurers include: AIG, BlueCross BlueShield Association, Erie Insurance, Farmers Insurance, The Hartford, Intact Insurance, Kemper, MassMutual, Nationwide, Northwestern Mutual, Sentry Insurance, State Farm, USAA and Zurich North America. To learn more, contact co-chairs Arteniece Lee or James Rumph.
Union carpenters across the Midwest called out contractors for committing payroll fraud to gain an unfair leg up in bidding for construction jobs. In Minneapolis, members of the North Central States Regional Council of Carpenters picketed a home construction site. They went after project contractor Painting America for allegedly undermining area wage and benefit standards. Painting America has faced charges from the Minnesota Department of Labor & Industry for illegally misclassifying employees as independent contractors. Builders that follow the law and pay workers fairly struggle to compete on cost with dishonest bidders. The practice is most-prevalent on multifamily, wood-frame construction sites, officials say. Minnesota loses $136 million in state revenues annually due to construction payroll fraud. Nationally, tax fraud in the construction industry costs the public $8.4 billion per year, says the Carpenters Union. Workers misclassified as independent contractors or paid off the books aren’t eligible for workers comp if they’re injured on the job.
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Paul Hicks wore a wig and custom-made rubber mask to look like his girlfriend so his home security cameras seemed to record her burning down his house in Clermont County, Ohio. |
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In fact Hicks torched the place for $400,000 of insurance payouts. Two masked intruders carrying gas cans entered his house and removed two large TVs, his security cams showed. Then they poured gasoline throughout the place and set the home ablaze. One person looked strikingly like his girlfriend. Hicks wore the rubber mask custom-ordered from a company called That’s My Face. He then tried to convince investigators that she did the fiery deed. Hicks also kept his home surveillance cam locked in a fireproof safe inside the home to preserve the footage during the fire. And he maneuvered two years of his girlfriend’s phone calls to him, making it appear she had a motive to start the fire. Hicks made a damage claim of more than $180,000 with Allstate. Yet given his income, he had only $11,000-$33,000 of property. His girlfriend was cleared. Hicks pled no contest. He’ll serve no jail time though must repay the $400,000.
A crash ring that has terrorized truckers in New Orleans continues being rolled up. Here’s the latest: A 2014 Dodge Avenger owned and driven by Doneisha Gibson maneuvered a collision with Hotard bus on I-10 in New Orleans. Ishais Price also was in the Avenger. Gibson recruited Chandrika Brown and Price as passengers for a crash ring that ram commercial vehicles to exploit their robust insurance coverage. The Avenger’s driver switched seats with Gibson after the crash. Gibson and the other passengers lied that the bus illegally changed lanes and caused the crash. Brown, Gibson, Price and the driver hired lawyers and falsely received $677,500 of injury payouts. Another recent ring crash: Aisha Thompson lied she was a passenger in Erica Lee’s 2015 RAV4. They intentionally crashed into a tractor-trailer owned by Averitt Express. The driver exited the RAV4 and Lee got behind the wheel to make it appear she drove. Passenger “A” also lied to the insurer that she was Thompson. The passengers got medical care and hired a lawyer to pressure the trucking firm and its insurer. Thompson’s insurance settlement was $30,000. She was handed 18 months in federal prison, and Brown three years of probation. They were convicted, along with Keishira Richardson in yet another setup crash. This trio must repay $5.5 million in Operation Sideswipe, which has earned 36 federal convictions so far.
Kansas courts have jurisdiction over a vehicle-damage scam partly committed in Kansas by a person who commits a crime against a Kansan — or if the crime has an effect in Kansas. So ruled the state’s highest court in a case involving Missouri resident Ivan Rozell. He allegedly filed a false auto-damage claim against a Kansas policy after a collision in Kansas City, Mo. Rozell’s out-of-state actions led to the investigation in Kansas of the claim on a Kansas insurance policy held by a Kansas resident caused a consequence or effect in Kansas. Rozell was in a minor collision with Saul Lopez in Kansas City, Mo. Lopez’s father owned the vehicle, and lived in Kansas. Lopez didn’t obey the right of way and hit Rozell's vehicle. The vehicles made minimal contact. Rozell told Lopez he was fine and declined Lopez’ offer to call police. Lopez billed State Farm $52,000 for crash injuries — including a bill for treatment given two days before the fender bender.
Suspects across eight states exploited the pandemic for nearly $150 million of illicit gains, federal prosecutors charge in a series of takedowns. In Los Angeles, a lab defrauded Medicare of over $214 million for false tests, including more than $125 million in fraudulent claims for COVID-19 and respiratory pathogen tests. In separate Maryland and New York cases, medical clinics obtained confidential info from patients seeking drive-through COVID-19 testing, and made false claims for phantom telemed visits. The profits were laundered through shell corporations in the U.S., transferred abroad, and used to buy real estate and other luxury items. A postal worker in New Jersey made thousands by selling more than 400 fake vaccination cards. She used a printer at the post office where she worked. She hid the electronic payments as items like “movie tickets” or “dinner and drinks.” A Colorado man forged hundreds of customized vaccination cards for people in at least a dozen states. He asked an undercover agent if they preferred specific dates for when they purportedly got their shots. He explained if they were flying soon, airlines wanted the second dose to be given at least two weeks before the flight. Some 21 suspects are charged.
Clad only in shorts, Timothy Brooks’ lifeless body sat in his orange lounge chair with a gunshot wound to his stomach. A 12-gauge shotgun with the muzzle pointed upward lay between the Duncan, Okla. man’s legs. Brooks’ son killed his father for $500,000 of life insurance and disguised the murder to look like suicide, prosecutors contend. Here’s allegedly why: James Kyle Brooks was estranged from his father. He secretly took out the life policy without his father’s knowledge. Brooks said he went to Tim’s home the day before to talk. They cleaned the shotgun together, then his father began “talking crazy talk” while reloading the weapon and threatening to shoot himself, Brooks claimed. His father then lifted the gun and said “watch this” and then shot himself, Brooks claimed. A spent shell rested on the floor to the left of Tim. Yet the shell exit port is on the right side of the gun. And because the gun is a pump action, it would’ve been hard to manipulate it with enough force to eject the spent shell from his father’s position. Nor was there evidence of anyone cleaning the shotgun; there were no “soiled cloth patches in the gun cleaning kit or in the trash. And Timothy could’ve shot himself only after moving his body in an unusual way. His son also called the life insurer almost daily about getting the payout.
Insurers lost $12 million in false prescription claims maneuvered by call centers that set up bogus telemed appointments, the feds alleged in St. George, Utah. The suspected plot: David Gary Bishoff and Brycen Key Millett allegedly ran the outfit. Their call centers contacted consumers, offering them free migraine meds, pain cream and other meds without exams. Often the ring set up bogus telemed appointments with staff who used the doc’s IDs. Docs on the take also issued the scripts without examining the patients — even when patients had refused the meds on the calls. Pharmacies owned by Bishoff and Millett sent the meds to the patients, billing their private insurers. Often the meds weren’t even sent — merely billed to their insurers. In many cases, the ring issued scripts using the IDs of docs who didn’t know their info was being abused. When insurers caught onto the billing scheme, Bishoff and Millett ditched their pharmacies and started new ones. They’re charged with conspiracy to commit health care fraud.
A chiro stole the IDs of toddlers and children then billed for treating them as adults in a $2.2-million billing con. Susan H. Poon attended health fairs for employees of UPS warehouses and Costco locations in the Santa Ana, Calif. area. She gathered their personal info, including the IDs of the kids. Poon never even met the patients, yet billed for diagnosing and treating them and their parents. She also sent fraudulent durable medical equipment prescriptions — based on the ghost patient visits — to a DME manufacturer. And she fabricated medical documentation containing the IDs of the fake patients to mislead an auditor. Poon received 70 months in federal prison.
Illegal kickbacks and patient referrals earned medical sales rep Steven Monaco a federal fraud conviction. The Sewell, N.J. man led two related schemes that resulted in $4.6 million of losses to public health plans. First scheme: Monaco was a sales rep for a medical diagnostic lab. He launched a kickback scheme with a doc, Daniel Oswari. Monaco arranged for Oswari’s medical assistant to be placed on the lab’s payroll laboratory while continuing to work as a medical assistant for Oswari’s practice. In exchange, Oswari referred all his lab work to the laboratory for testing. The lab paid Monaco $36,000. Second scheme: Monaco and pharma sales rep Richard Zappala received a percentage of the insurance payouts for compound med scripts they arranged. Monaco and Zappala paid docs to sign medically unneeded prescriptions for the compound meds. Monaco bribed Oswari and his staff to prescribe the compound meds to Oswari’s patients insurance plans without examining the patients. Monaco also arranged for other medical providers to sign medically unneeded prescriptions for Monaco’s family members and others without exams. Monaco paid the providers cash and tickets to sporting events — he earned $350,000 in illicit payouts in return. Monaco will be federally sentenced later.
Click the map to read about these and other fraud cases around the U.S.
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As a former Florida Deputy Insurance Commissioner and Deputy CFO, Lisa Miller has a passion for public policy and client success.
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She founded Lisa Miller & Associates to do just that — guide clients by advocating for sound public policy and help insurance consumers understand the coverage they buy and how they can avoid being victimized by unscrupulous contractors. LMA also is the newest Coalition member. As Deputy CFO, Lisa led the My Safe Florida Home program, a $250-million legislative initiative to encourage Floridians to strengthen their homes against hurricanes. With experience in insurance and disaster recovery, she provides clients and the public a wealth of knowledge. Currently, LMA provides government consulting and advocacy in Florida’s legislative and executive branches, business development and public relations. LMA encourages clients to vividly tell their stories, putting a personal face on issues to create a deep emotional impression. LMA’s services include issue development, legislative preparation, lawmaker visits, campaign volunteering, bill tracking, regulatory rule hearings and state agency monitoring. LMA also works with insurers, reinsurance brokers, analytics and rating firms, healthcare companies, architectural design and engineering consultancies, real estate interests, associations, and emergency management and mitigation firms. As we can see, Lisa’s passion runs deep. The Coalition welcomes her company and knowledge of an anti-fraud cause that she is as passionate about as we are.
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Global Volunteer Month wraps up this week, and I want to recognize and celebrate the impact of IASIU members who volunteer your time to make our international anti-fraud community so great! We have many volunteers who go above and beyond every day to make an impact and contribute to our mission. The fraud-fighting community is stronger for your many efforts. IASIU appreciates every one of our members who volunteer your time, share your expertise, and support your fraud-fighting community. Thank you for your service! And if you’d like to step up as a volunteer and are interested in contributing to IASIU at a higher level, consider joining a local chapter, an IASIU committee, or run for an IASIU Board of Directors position for 2022-2024. Nominations are open now!
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FACES OF FRAUD |
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Jay Wickey
Sergeant Bluff, IA
Fraud general
CONVICTED
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Christopher Robinson
Cerulean, TN
Auto giveups
ARRESTED
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Tonya Taylor
Albany, NY
Medical fraud
ARRESTED
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Keyon Dooling
Salt Lake City, UT
Medical claims
CONVICTED
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