Fighting Insurance Fraud

Posted by on Tuesday, March 27th, 2012

According to the FBI, the total cost of insurance fraud, excluding non-health insurance, is estimated at more than $40 billion per year. They calculate that insurance fraud costs an average American family between $400 and $700 per year in the form of increased premiums. The FBI, local law enforcement, insurance companies, The National Insurance Crime Bureau (NICB), the Coalition Against Insurance Fraud (CAIF), and private investigation agencies work to fight insurance fraud and save you money on premiums.

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Earlier this month, the Florida Legislature passed reforms to Florida’s Motor Vehicle No-Fault Law. Gov. Rick Scott made it his mission to get this bill passed and reduce insurance fraud in Florida.  In an interview with the Tampa Bay Times, Gov. Scott stated “We are the No. 1 state for staged auto accidents where people fake an accident. If we don’t fix this — it’s already $1 billion in fraud — it will go up 30 percent year after year after year.”

Last week, The National Insurance Crime Bureau (NICB) released its 2011 questionable claims (QC) referral reason analysis. The report examines six categories of claims: property, casualty, commercial, workers’ compensation, vehicle and miscellaneous referred in 2011, with those referred in 2009 and 2010.

“Questionable claims are those claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons. Within the casualty category, “faked/exaggerated injury” and “excessive treatment” posted the highest number of 2011 referrals with 17,581 and 8,485 respectively. In the workers’ compensation category, “claimant fraud” received the highest with 2,085 referrals. In the vehicle category, “questionable vehicle theft” logged the most referrals in 2011 with 11,451 and—after posting 2,182 referrals in 2010—a 450 percent increase from 2009—“auto glass fraud” saw the steepest decline across all categories dropping to 817 referrals—a decrease of 1,365 from 2010. ”

The NICB  has published a list of the most stolen vehicles for the past 25 years. It might surprise you that year after year, most of the vehicles are not high end cars, but Honda Civics and Accord, or Toyota pick up trucks. The Ford Mustang is not on the list. NICB issued a special report on Mustang thefts this month.

“NICB reviewed Mustang theft data from 1964-2011 and identified 611,093 theft records. Although data for all years is available, confidence in pre-1981 records is low due to the inconsistency in reporting protocols and vehicle identification number (VIN) systems in use prior to 1981. Overall, from 1981 through 2011, a total of 411,155 Mustangs were reported stolen. The most thefts occurred in 1981 (20,708) and the fewest in 2011 (4,347). ”

The NICB provides this interesting tale:  A 1965 Shelby GT-350 Mustang owned by a young Marine was stolen in 1982, in North Carolina, where he was stationed. The Marine was deployed and had given up hope of getting his car back. Fast forward to 2007. An NICB agent contacted Scott Evans with the good news: his Mustang was located in Maryland.

The NICB also reports on a Personal Injury Protection (PIP) fraud ring busted in Cape Coral, Florida:

“United States Attorney Robert E. O’Neill announces the unsealing of two indictments charging twelve individuals with charges including health care fraud, mail fraud, money laundering, conspiracy to commit health care fraud and mail fraud, and conspiracy to commit money laundering. Each of the counts in the two indictments carry a maximum penalty of 20 years in federal prison.

Joanna Capote (23, Cape Coral), Dr. Stephen M. Lovell (54, Windermere), Francisco Huici Fernandez (39, Cape Coral), Ernesto Diaz (30, Cape Coral), Karen Carmona Jackson (29, Lake Wales), Jeanine Lastres Huici (41, Cape Coral), Marylda Santana (21, Cape Coral), Sonia Arroyo (52, Cape Coral), and Indra Lemus Castellanos (19, Cape Coral) are charged with conspiracy to commit health care fraud and mail fraud, health care fraud, mail fraud and conspiracy to commit money laundering and money laundering.

The indictment also notifies Lovell that the United States intends to forfeit an airplane and motor vehicle purchased by him, with proceeds from the fraud, and bank accounts which are alleged to be traceable proceeds of the offense.

In a separate indictment, Abel de Jesus Perez (43, Cape Coral), Victor Caballero Duarte (22, Cape Coral), Francisco Huici Fernandez (39, Cape Coral), Marylda Santana (21, Cape Coral) and Adrian Perez (21, Cape Coral) are charged with conspiracy to commit health care fraud and mail fraud, health care fraud, mail fraud and conspiracy to commit money laundering.

According to the indictments, Xtreme Care Rehabilitation Center Inc. (“Xtreme Care”) and C & A Family Rehab Center Inc. (“C& A”) were operating in Cape Coral, Florida as unlicensed health care clinics since 2009. The State of Florida licensing requirements were circumvented by the conspirators as a result of the purported exclusive ownership of these clinics by licensed health care practitioners, including licensed chiropractor Dr. Stephen M. Lovell.

As a result of the purported ownership of the clinics by a licensed health care practitioner, these clinics avoided greater regulatory scrutiny. In actuality, other conspirators including Francisco Huici Fernandez, Ernesto Diaz and Abel de Jesus Perez were the true owners of the clinics.

In furtherance of the health care fraud, the conspirators caused individuals to be recruited who purported to be involved in staged accidents and received injuries. These individuals would then go to Xtreme Care and C & A in exchange for payment. Xtreme Care and C & A then billed insurance companies by submitting false claims, through the mail, for purportedly medically necessary treatments that these patients received. However, as the indictment alleges, treatment was either never provided to these patients or was not medically necessary.

Upon payment by the insurance company, the proceeds of the fraudulent activity were then transferred to corporations created by the conspirators to launder the proceeds of the criminal activity.”

Natural disasters are becoming a major cause of insurance fraud. While most claims resulting from such tragedies are legitimate, some people take advantage of the situation.

“After a disaster, contractors and others will often go door-to-door in neighborhoods, which have sustained damage to offer clean up and/or construction and repair services. Most of these business people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims. One such scheme is to pocket the payment and never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work not up to code in order to pocket more profit.”

“Anyone with information concerning vehicle theft and insurance fraud can report it anonymously by calling toll-free 1-800-TEL-NICB (1-800-835-6422), texting keyword “fraud” to TIP411 (847411) or by visiting our Web site at”

Sheer Investigations is a major player in the fight against insurance fraud. Our experienced insurance fraud investigators use state-of-the-art technology and advanced surveillance techniques to assist insurance companies with fraudulent claim investigations.


Former FBI Assistant Director Tom Sheer has recruited the best from the FBI, DEA, IRS and Secret Service to build a formidable team at Sheer Investigations. Our private investigators have the sensitivity and experience to handle the most delicate investigations.

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