Publications

Damian Labeaud

Busy freeways stretching around New Orleans were frightening ordeals for truckers passing through town.

Damian Labeaud led a sprawling crime ring that maneuvered innocent big rig drivers into at least 40 sideswipes and collisions. 

Labeaud packed cars with passengers like motorized sardine cans. Then he and his cohorts staged the freeway crashes, claiming the innocent truckers were at fault. The passengers were unharmed, yet lied they had painful neck and back whiplash injuries. Many passengers were ghosts. They weren’t even in the cars, yet claimed they were hurt.

Labeaud feasted on the truckers’ insurers with millions of dollars in dummied-up injury claims. Whiplash is a hard-to-prove soft-tissue injury. Unlike broken bones that can easily show up in X-rays, whiplash is easy to fake and hard for insurers to medically dispute. 

Piles up false, expensive lawsuits 

A personal-injury lawyer in cahoots with the ring knew the trucking firms were required to carry at least $1 million of insurance. The lawyers piled on large lawsuits, draining insurers for up to $200,000 apiece in false injury claims. 

In one setup wreck, Lois Russell, Tanya Givens and John Diggs teamed with passenger James “Curtis” Williams to stage a separate wreck with a tractor-trailer. Roderick Hickman drove Russell’s car. He rammed the 18-wheeler and fled with Labeaud in a getaway car. Russell lied to police that she drove the attack car. She made false injury claims, along with Givens and Diggs. Insurers paid out $272,500.

In another case, four ring motorists sued after claiming a truck rammed them while turning into a truck stop. The driver and three passengers claimed no injuries in the police accident report. The report also cited only minor damage to the car — and not even a scratch on the truck. The officer even cited the car driver with two tickets and arrested her. 

Yet the driver and her passengers sued the trucker’s insurer nine months later. They claimed “severe and disabling injuries.” The case was settled out of court.

Unhurt, yet endure neck surgery

Labeaud was just as active. He drove a Chevy Avalanche into a truck — yet claimed the trucker caused the wreck. Labeaud’s colluding attorney arranged bogus injury treatment for his “passengers” — some who weren’t even in the vehicle. Lucinda Thomas was unhurt, yet endured worthless neck surgery to increase her insurance take. The truck’s dashcam tipped off investigators, showing the entire bogus collision as it unfolded. That helped blow the lid off the ring, leading to the arrest of Labeaud and his crash cohorts. Many of the same ring members kept showing up in the same crashes and lawsuits, further fueling the months of investigations.

Federal prosecutors methodically dismantled Labeaud’s ring in court. Most members now have criminal records. The Louisiana State Police played an invaluable role in the successful investigations. 

Labeaud will spend up to five years in federal prison when he’s sentenced. As he discovered to his dismay, insurance fraud was a freeway straight to jail.

*****

Ali F. Elmezayen

Onlookers heard the tires screech as Ali F. Elmezayen’s car sped down a commercial fishing wharf and shot into the harbor at Los Angeles.

The Honda Civic quickly sank in 20-30 feet of murky salt water. Elmezayen swam out through the open driver-side window. His two autistic kids were tightly strapped in child seats. They never had a chance and drowned, still in their seats. 

Elmezayen also tried to drown his ex-wife. Rabab Diab couldn’t swim yet luckily she was rescued by fisherman after barely escaping through the car window.

Elmezayen portrayed the wreck as a horrible accident. In fact it was stone-cold murder. Elhassan (age 13) and Abdelkrim (age 8) needed high levels of medical care, including state support. So the Egyptian native bought more than $7 million of life and accidental-death policies on himself, the kids’ lives and Diab. 

The accelerator pedal was his chance to cash in. His kids and wife were mere profit centers, not a family.

Insurance money buys real estate, boat

Elmezayen earned less than $30,000 a year in wages. Yet he somehow found the money to pay more than $6,000 of insurance premiums annually to keep the policies afloat.

He frequently contacted the insurers, asking to confirm they wouldn’t investigate for fraud if he made the claims two years after buying the policies. That’s the time window that life insurers typically require for investigating deaths of insureds.

So sure enough, Elmezayen raced his car off the pier just two years and 12 days after the policy purchases. He soon collected more than $260,000 on his dead sons’ lives. He used part of the money to buy real estate in Egypt, and a boat.  

Elmezayen garbled his stories when investigators questioned him after the kids died. He may have accidentally pressed the accelerator, he said. Or maybe he passed out from medicines he took for a blood disorder. Or maybe he fell prey to an “evil inside of me that pushed me to go.”

Killer wants a second wife

At trial, prosecutors said Elmezayen beat Diab and phoned her parents in Egypt, “threatening to send her home in a coffin.” He’d “bury her alive” and take a second wife.

His intentions were clear during a recorded call to an insurer. Elmezayen is heard in the background, speaking in Arabic with Diab. “May God compensate us for the kids. …” he said. “May God give us better than them.”

The federal judge compensated Elmezayen with 212 years in prison. 

“These two boys deserved a loving father,” said U.S. Attorney Nick Hanna. “Instead they got a man who put his greed and self-interest above their lives.”

*****

Wade Walters

Bland-looking tubes of creamy compound medicines were worth more than gold and diamonds to Wade Walters. His low-key pharmacy in Hattiesburg, Miss. began as the nerve center of a sprawling $510-million siphoning of health insurers — especially Tricare, the federal military insurer. 

Walters rapidly grew rich by hawking expensive and medically worthless compound medicines — mostly to young U.S. military service members around the U.S. who didn’t need the stuff. 

And hard-working taxpayers footed his insurance bills.

Compound meds are flypaper for insurance fraud. They cost insurers much more than standard medicines. Ideally, compounds are hand-mixed and customized for each patient. That makes the stuff expensive — billed to insurers for thousands of dollars per tube.

Targeting military members made sense to Walters. Military life can be hard and physical. So Walters’ fraud ring pureed compound pain and scar creams, and vitamin pills. For Tricare, the service members plausibly needed the medicines.

More to the point, the glop was lucrative for Walters. Some pain creams, which contained ketamine or tramadol — both controlled substances — were falsely billed to Tricare and other insurers for up to $14,000 per tube.

Military service members bribed

Walters’s fast-growing network included doctors, pharmacies, patient marketers and others. Marketers bribed hundreds of military service members to hand over their insurance information. They were covered by Tricare.

In some cases, marketers convinced Marines they were joining a drug trial for pain and scar creams. Marines were paid about $300 in illegal cash kickbacks each month after handing over their insurance information for billing.

Corrupt doctors prescribed the compound ointments without meeting the patients — or even determining if they needed the ointments. Ring members rigged prescriptions to ensure the highest possible insurance payouts. 

Pharmacies then mixed tubes of the medicines, and bottles of pills. The service members’ medical exams were forged to ensure the fraudulent bills fooled insurers.

Tubes of compound medicine were repeatedly mailed to service members on a recurring basis. This maximized each prescription’s illicit insurance profits. Yet service members didn’t use the ointment, because they didn’t need it.

Insurance money poured in. Walters’ scam rapidly expanded into a loosely built criminal network around the U.S. as word spread that compound medicines meant easy insurance money.

Patient paralyzed, in pain

Leslie Cook had a severe reaction to a compounded vitamin pill she took. “It felt like I was vomiting blood,” said Cook. She was paralyzed and couldn’t speak when searing pain overtook her. Cook was alone at home for hours until her husband arrived and rushed her to the hospital. 

She later asked the pharmacist what was in the pills. They contained capsaicin, the ingredient that makes chili peppers hot. 

Needy military vets were victimized as well. Walters’ ring stole so much insurance money that Tricare was forced to reduce healthcare programs that vets depended on. Tricare even had to ask the feds for more money to operate at full strength.

Justice finally caught up with Walters. He pled guilty, and streams of convictions have shelved other ring members. Walters was given 18 hard years in federal prison, and must repay more than $287 million. 

“My life has turned upside down,” Walters said. “I’ve embarrassed my family, my friends and my church family. I’m tired. I’m ready to move on and serve my time.”

*****

Imad and Bahaa Dawara

Imad and Bahaa Dawara’s flailing efforts to run a hookah bar had fizzled. They were $64,000 behind on rent, and feuding with their landlord. Their final bet to make money on the failed venture: torch the place for $750,000 of insurance money.

The brothers botched insurance fraud even worse than they ran their hookah bar. The explosive gasoline fire ruined a scenic old neighborhood on Chestnut Street in the heart of Philadelphia’s historic district. Flames and smoke drove hundreds of people from their businesses and homes, killed pets and caused millions in damage.

The Dawaras’ landlord had reached the end of his patience. Unpaid rent piled up, and the landlord also wouldn’t let them hire a DJ or use hookahs. So the brothers shuttered the bar, and the landlord permanently ejected them. 

Blaze flares out of control

Their last hope of recouping their losses after screwing up: Insurance fraud. The Dawaras had been uninsured for years. Then they suddenly bought a $750,000 policy that covered accidental fires — just 16 days before their arson fire. And even though their club had closed its doors. They ignited a gasoline fire in the basement at 3 a.m. The combustible brew quickly flared out of control. 

Searing flames and menacing smoke rapidly flared through the neighborhood. Panicky business owners, hotel guests and apartment dwellers bolted for safety amid the fiery chaos. The blaze destroyed the Dawaras’ historic brick building, wrecking a treasured landmark. 

More than 400 firefighters had to combat the flames. Around 160 people were evacuated; some sought shelter in a city bus that was set up as a refuge. At least 10 pets died. The neighborhood remained shut down for months. The damage drove several restaurants out of business permanently. Many neighbors lost their homes. 

Guests in one neighborhood hotel were forced to evacuate in the middle of the night. They waited for days before they could return to retrieve their belongings. They found that most of their possessions were destroyed. Most of the hotel’s 25 employees lost their jobs.

Calls crippling fire merely a “mistake”

The Dawaras’ rushed to pull down their false $750,000 claim — contacting their insurer the day after the blaze. 

The federal judge shared the community’s outrage after the Dawara were convicted. They each were handed nine years in prison, and must somehow repay $22 million. Bahaa showed little remorse in court. He merely called their ruinous insurance scheme a “mistake.”

“You took gas and poured it into a basement. What did you think was going to happen? Mistake?” U.S. Chief District Judge Juan R. Sánchez shot back. “You were playing with fire and you never thought there was a threat to people, property and the life of the city? You think this was a mistake?”

*****

Dr. Javaid Perwaiz

Women trusted Dr. Javaid Perwaiz, their tragically reassuring OB-GYN. Today, many former patients wrestle with consuming anger, betrayal and chronic pain. Perwaiz convinced them to have painful hysterectomies and other irreversible surgeries they didn’t need, maiming many for life.

Perwaiz’s supercharged scalpel made him Ferrari-rich from nearly $21 million of dollars he received from false and inflated insurance billings.

Fully 173 women reported unneeded surgeries under the Chesapeake, Va. OG-GYN’s supposed care. Perwaiz also botched many of the procedures; some women still suffer from chronic pain and other complications. Patients often were left with large scars as permanent reminders of his money-churning insurance scheme. 

Phony cancer threats fool patients

Perwaiz ran a hard-charging medical insurance fraud factory. He performed up to 30 surgeries a day. Staff could barely keep up with Perwaiz as he rushed from procedure to procedure. 

Cancer was imminent and Donna Ingram-Allen needed a hysterectomy right away, Perwaiz warned her. She chose to have her ovaries removed instead. 

When Ingram-Allen awoke in recovery, she discovered Perwaiz had inflicted a total abdominal hysterectomy. He also perforated her bladder. Ingram-Allen was rushed back to the hospital with blue skin, three days later. She’d developed a bad infection and was hospitalized for six days. She later obtained her medical files; they didn’t even mention precancerous cells.

Angela Lee suffered from complications after a hysterectomy led to heavy bleeding. She was placed in an induced coma for days. Another patient says she can no longer use the bathroom normally after an unneeded hysterectomy.

A patient Perwaiz treated for pregnancy problems discovered her fallopian tubes were “burnt down to nubs” without her knowledge or consent. She no longer can conceive naturally. Perwaiz also pressured patients to have permanent sterilizations, lying that the procedures were easily reversed.

At least 33 pregnant women had early induced labor without a valid medical reason. Rushing their childbirths let Perwaiz deliver the babies on days he worked at the hospital — and thus would be paid by insurers.

Cons patients into repeated surgeries

Many patients were lower-income Medicaid women who trusted Perwaiz’s medical diagnoses. Perwaiz persuaded them to keep having unneeded surgeries. Some came back every year, yet didn’t even know what surgeries he performed, or why.

Perwaiz also billed insurers hundreds of thousands for diagnostic procedures he didn’t perform. Perwaiz even charged for hysteroscopies — used to view a woman’s uterus — yet his office scope was broken.

Insurance money rolled in from Medicaid and private insurers. Perwaiz spent more than $2.3 million on credit card purchases. And he bought a fleet of luxury cars, including a Bentley, Jaguar, Mercedes and red Ferrari. 

Perwaiz’s samurai scalpel also bought him 59 years federal prison. The Virginia AG provided invaluable assistance in the case. 

“He doesn’t care about any of us. It was all about greed, money and a lavish lifestyle. That’s all he ever wanted,” former patient Anita Fuller said in court.

*****

Melissa Alvarez Torres and Jose Luis Olmos

More than 250 pregnant women from Mexico believed they bought affordable health insurance that let them legally give birth in the U.S., while covering the large maternity expenses.

Instead the trusting women were foils for a scheme that stole premium dollars the lower-income women could scarcely afford to lose. The ruse also imperiled their U.S. non-resident visas — their lifelines to an income and better living. 

Melissa Alvarez Torres and Jose Luis Olmos Hernandez set up the women, who’d hoped for their private slice of the American Dream. The San Diego-area duo lured the women into buying coverage for which they weren’t eligible. The goal: steal their hard-earned premium money.

Ads tout fake health insurance

Facebook ads hawked phony maternity coverage. Torres and Hernandez promoted a bogus health insurance provider called Seguros Americanos Embarazo (American Pregnancy Insurance) to lure the women in. 

The women crossed into the U.S. mostly work or tourist visas. Alvarez and Hernandez lied that their so-called health plan was a safe and legal way to give birth, thus offering their babies U.S. citizenship by birthright. 

U.S. hospitals also were safer, some women with high-risk pregnancies also figured. 

So the victims believed they’d bought private pregnancy coverage. In fact, Torres and Hernandez secretly signed them up for Medi-Cal, the state-run health insurance plan. They lied that the women were California residents, and thus were eligible for a special Medi-Cal maternity healthcare program for working class women without health coverage. 

In truth, the Mexican women weren’t eligible for Medi-Cal because they were only in the U.S. on their visas.

Torres and Hernandez harvested the sensitive personal information the women submitted from the false Facebook ads. 

Pregnant woman reports scheme

The pair also convincingly faked the documents needed to create the illusion the women were California residents. They invented fake addresses, elaborate tax and employment documents in the women’s names, and supporting letters from U.S. employers who hadn’t hired the women.

One pregnant woman realized her purported health insurance was Medi-Cal, not the private insurance she was told she bought. The woman called authorities to report she was a fraud victim, then had her baby in Mexico. 

A state investigator looking into suspicious insurance applications knocked on doors in Imperial County to verify the women’s residences. That sleuthing prompted a call from a woman targeted by the scheme. She provided evidence that further helped break open the health ruse.

Each faces up to 20 years in federal prison when sentenced, and must repay the stolen $1.5 million. 

So Torres and Hernandez now have their own piece of the American Dream — one that’s reserved for criminals.

*****

Police raided a Miami-area house. They found a batch of prescription pills, seemingly being moved by a small-time drug ring. 

In fact, the basic search discovered a fast-growing criminal network that would balloon into a $78-million scheme that exploited a thriving black market for expensive prescription drugs around the U.S.

Joshua Ryan Joles was a key drug mover in the operation, which hauled in $78 million by reselling large volumes of stolen medicines for high-profit markups throughout the U.S. Life-giving drugs for HIV, cancer and psychiatric illnesses were the ring’s stock in trade.

Thousands of bottles of potentially defective drugs ended in the hands of unknowing consumers. They had no idea their health was imperiled by drugs that often were expired, deliberately mislabeled, or decayed from unsafe storage.

Steals from Medicare, Medicaid beneficiaries

Joles convinced Medicare and Medicaid patients who filled their prescriptions at discounted prices to sell their medications to his network for extra spending money. He also acquired the expensive drugs by cargo theft and burglarizing pharmacies. 

Joles’ network soon spanned the U.S., disbursing drugs in Florida, Arizona, Delaware, Washington and Puerto Rico. It was the largest prescription drug ring South Florida had seen in recent years.

Ring members picked up boxes of stolen black-market drugs by the hundreds in random parking lots or streets across South Florida. Ring members then repackaged the expensive medicines for resale to unwitting retail pharmacies and consumers. 

They removed the labels on drug bottles with lighter fluid and other chemicals. Then they forged new labels and glued them on to make the drugs seem fresh and legitimately obtained. In addition, they created phony paperwork saying the drugs came from mainstream wholesale suppliers. 

Drugs stored in unsafe conditions

Some drugs were past their expiration dates and stored in unsafe conditions. The operation also could be sloppy; one bottle contained pebbles instead of drugs. 

Joles sold his adulterated drugs to unwitting retail pharmacies that thought his medicine came from legitimate channels. His enticing wholesale prices — as much as 17% below normal wholesale rates — encouraged pharmacies to buy the drugs. 

The prices were low enough that pharmacies rushed to buy the drugs — though not low enough to appear suspicious.

Sham wholesale companies run by Joles and a crony resold the drugs as fast the criminal network’s suppliers could re-package and supply them. They even used return addresses of unrelated lawful firms to further create the appearance of legitimacy. 

Fast-flowing money from the drug purchased was laundered through bank accounts. 

Joles pled guilty, and was re-packaged into federal prison with a 76-month sentence. He joins most of the other ring members in jail. 

“This scheme strikes at the peace of mind we should all feel when we buy prescription drugs from a pharmacy,” says U.S. Attorney Ariana Fajardo Orshan. “We all expect and should rest assured, knowing that the drugs we are buying are safe, effective, and properly stored and handled.”

*****