Publications

Many new faces have joined legislative bodies as a result of November’s midterm elections. With most statehouses operating on two-year calendars, this is the first legislative cycle to kick off as the world tries to move beyond COVID-19. The result is a literal flood of new legislation being filed, including already 18 anti-fraud bills. All proposals are available on the Coalition’s interactive searchable map database of anti-fraud laws, regulations and pending legislation. Just a few highlights of bills already in the hopper: In Texas, a bill would require insurers to pay public adjuster fees if the insurer’s actions “force'' the insured to hire the PA. Coalition member the National Association of Public Insurance Adjusters opposes the bill. Kentucky lawmakers will consider creating a healthcare all-payer claims database. In New York, a bill may both add and increase criminal penalties for identity theft. South Carolina legislators will consider mandating appraisal provisions in auto policies and prohibiting insurers from colluding with vendors , legislators there will also consider creating a new state false claims act whistleblower law. 

After several insurance commissioners stepped down at the end of 2022, the new year sees several familiar faces continuing to oversee regulatory efforts in their states. Following successful re-election campaigns, Kansas Insurance Commissioner Vicki Schmidt was sworn into office on Monday for her second term. The same day saw Oklahoma Commissioner Glen Mulready also taking the oath for his second term at the DOI helm. In Wisconsin, Gov. Tony Evers this week reappointed Nathan Houdek as Commissioner of Insurance Houdek has served as commissioner since January 2022. Wisconsin does not have an anti-fraud bureau but has expressed an interest in potentially starting one in the commissioner’s new term. While not officially sworn into office yet, Pennsylvania Governor-Elect Josh Shapiro has also announced his plan to nominate current Interim Insurance Commissioner Mike Humphreys to serve in the role permanently in his new administration.  

Will Florida’s massive property insurance reforms passed in December actually have an impact? That is a question the Florida Office of Insurance Regulation wants to answer. Their first step is collecting information on all closed residential property claims for calendar year 2022. On Wednesday, the OIR issued a data call mandating insurers to report all personal and commercial residential property claims closed in Florida during 2022. The deadline is March 1. Each policy-writing company within a group must submit its filing on an individual company basis. The data call is mandatory as part of the state’s insurance code reporting laws.
 

A carry-over public adjuster bill in Illinois from the 2021-2022 legislative session was signed into law on Wednesday by Gov. JB Pritzker. The new law provides that a public adjuster contract must contain the email address of the public adjuster. The adjuster must also provide an exact copy of the contract to the insurer's authorized representative for the PA to receive notice of any loss or damage regarding the claim. And public adjusters may also provide emergency services before a written contract with the insured is executed. 
 

Note: Texts of anti-fraud bills are available on the Coalition’s website here.

Two investigations: A driver said their car was stolen and wrecked by fire. A plastic container used to hold laundry detergent pods was found near the burned car. Yet the driver and vehicle were spotted earlier that day at a gas station, filling the same plastic container. In another case, a driver claimed injury payments, citing a concussion, headaches, dizziness and muscle pain. Yet surveillance caught the driver walking long distances, shopping, lifting bags of groceries and driving a motorcycle. 

Medicare spent $2B on COVID-19 tests last year to make the life-saving tests easily available to the public. That’s a sharp spike over the $1.5B in 2020. Fraud and overspending contributed to the increases, experts say, because federal money for COVID-19 testing doesn’t have all the financial and regulatory constraints as other tests covered by Medicare. Loose federal incentives to offer tests attracted price-gougers, fraudsters and people with no experience in the lab business. The resulting chaos ranged from fraud to bungled tests and confusion over new requirements. “It was an unprecedented wave of fraud,” Michael Cohen, of the HHS Inspector General, tells reporters. Which leads some observers to ask: Should Medicare ditch its relaxed standards for entering the COVID-testing business, and install tougher rules to stop more millions of tax dollars from flying out the window?

The Portland-area woman stole insurance money she negotiated for often gravely injured and vulnerable clients. Deveny defrauded 135 clients out of more than $4.5M that she held in trust for them. She stole her clients’ IDs, forged insurance checks made payable to them, deposited client funds into her personal bank accounts, and lulled clients into a false hope that their expensive medical bills would be paid for. Many of Deveny’s victims had serious brain and bodily injuries. They never received their urgently needed insurance payouts — lifelines to medical treatment. Deveny spent stolen client money to pay $150K for foreign and domestic airline tickets; $173K for African safari and big game hunting trips; $35K for taxidermy; $125K for home renovations; $195K in mortgage payments; more than $220K for cigars and related expenses; $58K for pet boarding and vet costs; $41K for recreational vehicle expenses; $50K for a Cadillac luxury vehicle; and $60K for stays at a luxury nudist resort in Palm Springs, Calif. Deveny pled guilty and was handed more than eight years in federal prison.

Police found Samuel Thompson lying dead in the street at an intersection in Rochester, N.Y.  The 67-year-old was pronounced dead of head trauma. Prosecutors allege this much: Gina Inguagiato allegedly struck Thompson around 3 a.m. on June 8, then drove away without reporting the incident. Inguagiato arranged to have her motor vehicle moved to another intersection. She then called 911 and filed a false report that her vehicle was stolen. She wanted to hide that she drove her vehicle and fatally struck Thompson. Inguagiato later filed a false claim with her insurer, saying her vehicle was stolen. She’s charged with insurance fraud, leaving the scene of an incident without reporting, tampering with evidence and making a false written statement.

Convicted felon LaShawn Ziegler wants his lengthy court records sealed. Among other things, the Warren, Ohio man lied that his BMW was stolen in 2008. Ziegler claimed he paid $9K for the car, though told his auto insurer it was worth $35K when he filed a theft claim. Ziegler also fraudulently obtained an Ohio title for the car. Police found the BMW at Ziegler’s home when they entered with a search warrant. They also found a 2007 Chevy Corvette there, for which Ziegler had obtained a fraudulent Ohio title. He was given five years of probation for the car scam, marijuana and other schemes. Ziegler also ran three notorious bars that caused headaches for Warren police. Patrons were shot outside of his Benji Brown’s, Soul 77 and Sunset Lounge. Prosecutors want to keep his court records public in case he tries to open another bar. Ziegler wants them sealed. Now a truck driver, he insists he has no intention of opening another bar.

An agent made false applications to obtain or renew policies and steal $75K of undeserved commissions, prosecutors charge in Newark, N.J. The allegations: Jean Estil also forged the victims’ names on eight insurance applications, obtained another person’s personal info to represent himself as that person in a phone call with an insurer. And she illegally stole commissions from four insurers. Estil is charged with insurance fraud and theft by deception, attempted theft by deception and impersonation, and forgery.

A top exec for a billionaire insurance mogul accused of trying to bribe North Carolina’s insurance commissioner illegally moved money among Greg Lindberg’s insurers. Christopher Herwig was Lindberg’s chief investment officer. The pair extracted hundreds of millions of dollars from several insurers using a series of loans and other transactions. Then they used the money to acquire and operate other insurers, federal prosecutors say. Some transactions involved $96M of sham repurchases. Lindberg earlier was convicted of trying to bribe commissioner Mike Causey to ease up regulatory oversight of Lindberg’s ailing insurers. Causey had the FBI wire him and recorded the bribery attempt. Herwig pled guilty and will be sentenced later. Lindberg was convicted in 2020, though was granted a retrial due to issues with the jury instructions.

Phil Esformes drove a custom Ferrari and lived in a huge mansion in South Florida. He also was majordomo of a $1.3B Medicare gouging with corrupt nursing homes. Then-President Donald Trump commuted his 20-year federal term in 2020. Yet a federal court recently upheld parts of his sentence — including his being liable for $44M of penalties. Esformes’ scheme ranks among the largest insurance scams ever. Esformes dolled out kickbacks to keep 14K patients churning through his facilities, overbilling for services the patients didn’t need. Esformes bribed docs in cash to refer patients to his facilities. He used kickback code words like “fettuccine.” Esformes then inflated invoices to account for kickbacks and bribes. He disguised them as payments for high-end escorts flown to Orlando and chauffeured in limos for liaisons at the Ritz Carlton. Esformes even bribed a health regulator to provide a schedule of unannounced facility inspections. Other providers also bribed Esformes to send patients to their facilities and falsely bill Medicare. He even bribed a basketball coach to have his unqualified son admitted to Penn as a basketball player. Esformes drove a custom $1.6M Ferrari Aperta, flew private jets, and bought expensive homes in Miami and Los Angeles. Esformes was inducted to the Insurance Fraud Hall of Shame in 2019. 

Jamie Daniels died of a drug overdose at a sober home run by Dr. Michael Ligotti in Delray Beach, Fla. Jamie was the son of the play-by-play announcer for the NHL Detroit Red Wings. Ligotti was “medical director” of more than 50 sober homes. He billed insurers more than $746M for bogus tests and rehab. He repeatedly authorized false tests and treatments — billing for urine tests, blood tests, office visits and therapy whether patients needed them or not. In some cases, he billed insurers for tests that never happened. Sober homes then routinely sent patients’ urine specimens to clinical testing labs. Then they billed health insurers for unneeded urine drug tests — often thousands of dollars for one test. In exchange for Ligotti’s authorizing urine drug tests, the treatment centers required patients to regularly visit Ligotti’s clinic, Whole Health, for more treatment and tests. Or they let his staff visit their facilities to give tests and treatment. Ligotti pled guilty and received 20 years in federal prison.

Victims of a $600M disability scam — the largest-ever — may finally have their long-lost benefits restored. Attorney Eric Conn fooled Social Security into paying disability for thousands of perfectly healthy people. The Eastern Kentucky man built one of the nation’s largest disability practices through pushy self-promotion and dishonest dealings. Conn bribed a local judge, psychologist and doctors to rubber-stamp disability claims for clients, regardless of their health. Many patients weren’t even examined. Social Security stopped their disability payments while figuring out which clients were truly injured, and who was uninjured and making money from Conn’s scam. Hundreds of impoverished, truly injured people lost desperately needed disability money. Many victims were unemployed coal miners, scratching out a sparse living in pain. Conn promised he’d get them their disability checks to help pay for critical medical care. Social Security stopped coal miner Tim Dye’s checks after Conn was busted. Dye’s wife sold her jewelry and possessions from their home. She even begged for water from neighbors. Other Kentuckians lost their homes, and several committed suicide. Conn received 27 years in federal prison last year. Under a recent agreement, however, Conn’s former clients thankfully can have their disability benefits restored if they request new hearings.

Each week throughout 2023, we’ll recount a highlight moment of the Coalition’s history — or the fraud fight itself — to help celebrate our 30th anniversary. 

Congratulations to the Coalition Against Insurance Fraud on your 30th Anniversary!!  To think that an idea of bringing consumer groups, government agencies and insurers together to fight insurance fraud has grown into the dynamic organization it is today is remarkable. Over the last thirty years, the Coalition has become a respected national and global leader in the fight against insurance fraud.
 

What makes the Coalition stand out as a leader in the fraud fighting community is the make-up of the Coalition itself. Consumer groups, insurers, government agencies, legislators, prosecutors, academics, and other committed partners come together under one umbrella to protect consumers from any type of fraud. 
 

I was always impressed by the Coalition’s ability to tackle any insurance fraud related issue whether through public awareness, legislative affairs, amicus briefs or through communication with other groups such as the Consumer Federation of America, NAIC, NICB and IASIU just to name a few.
 

What makes the Coalition Against Insurance Fraud special to me is its people, the staff and membership.  The transition from Dennis Jay, Jim Quiggle, Howard Goldblatt and Kendra Smith to the current staff of Matthew Smith, Tracy Thompson, Joe Matos and Kendra has been smooth and seamless. They are all great at their jobs and most importantly, bring passion to the fight against insurance fraud every day.
 

I was fortunate enough throughout my career to be a member of the Executive Committee, former co-chair of the Coalition and the current chair of the Public Information Committee, where I’ve had the opportunity to meet and work with the finest people in the fraud fighting community.  To me, the annual and mid-year meetings are like high school reunions, where I get the chance to reconnect with old friends and meet new friends. I am truly blessed by the number of friends and mentors I’ve met over the years as a member of the Coalition!
 

Congratulations on your 30th Anniversary and thank you for letting me play a small part in the tremendous success of our organization!
 

Thomas Donahue CIFI, FCLS

Vice President, SIU Engagement/Claims Solutions
Verisk

WCF Insurance is an innovative insurance provider who, over the history of the organization, has primarily been in the workers compensation sector. In recent years, the company has taken the steps to expand its products and services into multi-line insurance coverage.  Like many other insurance carriers, WCF Insurance is constantly combating the threat of insurance fraud. Their special investigation unit works diligently to identify, investigate, and deter fraudulent activity within their company.

Currently, WCF Insurance faces the threat of a variety of fraudulent schemes, such as staged incidents, fake or falsified claim documentation, billing for services not rendered, and exaggerating loss. To combat these issues, their special investigation unit stays educated on current national insurance fraud trends through networking with other professionals within the industry. They also utilize current and effective technology to aid in their investigations.
 

In addition to these internal efforts, WCF Insurance is proud to be a new member of the Coalition Against Insurance Fraud which they understand brings together insurance professionals to share information and resources.
 

At WCF Insurance, they take insurance fraud seriously and their special investigation unit is committed to doing everything in their power to protect their policyholders and the integrity of the company, especially as they navigate through new territory as a multi-line insurance carrier. They will continue to stay vigilant and adapt their strategies to stay ahead of the ever-changing landscape of insurance fraud.
 

Their new membership to the Coalition Against Insurance Fraud will not only provide WCF Insurance access to the collective knowledge and experience of other insurance companies, but also provide a platform to lobby for improved laws, educate the public and collaborate on investigations. 

As we approach Martin Luther King, Jr. Day, IASIU recognizes the great sacrifices that were made for diversity, equity and inclusion by Dr. King and many others. This is a topic that remains at the forefront of our ideals, and that of the insurance world. Dr. King said, “Change does not roll in on the wheels of inevitability, but comes through continuous struggle.” Change is something that is never easy but it is necessary for growth and improvement. IASIU pledges to keep the idea of diversity and inclusion at the forefront of our practices. Please join us by becoming a member to help the fraud fight and continue to adopt change. Through webinars, certifications and networking we aim to build a broad and diverse community of members centered around the goal of fighting insurance fraud. Fraud affects all walks of life; it is up to the fraud-fighting community to fight for everyone. And that is exactly what IASIU plans to do!