Miami Man Charged with Conspiracy to Commit Health Care Fraud

On November 17, 2016, Satellite Press Releases and News reported the arrest of 21-year-old Eduardo Arango Chongo in connection with the arrests of 31-year-old Osmaro Ruiz and 25-year-old Raymel Betancourt for conspiracy to commit health care fraud.

According to the complaint, the co-conspirators had established fake medical facilities in Union County, New Jersey and were fraudulently billing insurance companies for services that were never rendered. The “phantom providers” allegedly submitted false claims for services worth more than $6 million, raking in hundreds of thousands of dollars from insurance companies. The defendants also utilized an electronic healthcare network used by medical practices to access the health insurance information of individuals who were not aware of their fraudulent activities.

The defendants could face up to 10 years in prison and a $250,000 fine if found guilty of the crimes they were accused of. U.S. Attorney Paul J. Fishman credits special agents of the U.S. Postal Inspection Service and special agents of the FBI with the investigation leading to the charges.

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Filed under Florida, Health care, Insurance, Insurance Fraud

Former Mayor of Tavares, FL Admits to Committing Insurance Fraud

According to WFTV Action 9 News, Robert Wolfe, former Tavares Mayor admitted to committing insurance fraud as part of a plea deal he made with the state. Wolfe was arrested in July after investigators found that Wolfe had reported to the insurance company that he had rented a home for $2,350 a month and had to board his dogs for $1,800 a month due to a leak in his home that needed to be repaired. However, investigators found that Wolfe never moved into the rental.

Wolfe will be placed on probation for 18 months and has been ordered to pay all investigative and court costs. He was also removed from his mayoral seat in July and has since resigned. Once Wolfe completes the 18 month pretrial intervention program, charges will be dismissed.

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Filed under Florida, Insurance, Insurance Fraud

Andrew v. Matthew: The Evolution of Investigative Tools in Insurance Investigations

I am sure right now many of our insurance carriers are out there running themselves ragged, trying to quickly and efficiently adjust the thousands of claims that are pouring in from Hurricane Matthew.

As the dust settles, I want to remind you of all the great resources and tools you have to investigate and adjust claims that were not available during the time of Hurricane Andrew. Although there are many, the most impactful are cellphones, portable computers and trade-specific tools of laser distance meters, moisture meters and thermal imaging devices.

Clearly, we have come a long way from the time of paper files, pay phones and disposable cameras. During Hurricane Andrew, if you wanted to review a prior claim file, you would need to retrieve it from storage or an archive. If you wanted to make an appointment to inspect the property, you would need to leave messages for the insured at their home or office, and wait for them to call you back at the office. Finally, if you wanted to take pictures of the damage, you would have needed to use a disposable camera (which date back to 1986) and hoped you captured the images you needed.

The most significant technological advancement we have at our fingertips is our cell phones. Cell phones give us the ability to take photographs, take videos, record audio and otherwise document an event. As an example, the first cameras on cell phones arrived in 2000. Since then, cellphones quickly evolved into what we know today. With that in mind, ensure that the insured is asked whether they have any photographs of the property taken prior to your inspection as well as any photographs of the damaged areas prior to them being damaged.

Ask for this information early on in the claim handling, so that if it exists, it can be secured prior to a coverage decision. A photograph is worth a thousand words, and you do not want a few of those words to be “if I’d seen that …. ”

Also, be aware that pursuant to Florida Statute 626.854 (15)(c), which states in pertinent part that an insurer shall not be prevented from “timely conducting an inspection of any part of the insured property for which there is a claim for loss or damage,” you are entitled to inspect all areas claimed as damaged. As such, make sure you are asking to see just that — all damaged areas.

Tools Of The Trade
Advancements specific to the trade have been measuring tools, moisture meters and thermal cameras, to name a few. Although the spring-click tape measure was invented in 1868, it was not until the early 1990s that laser distance measures began to circulate. These electronic tape measures not only provide precise measurements, they also assist in obtaining measurements of hard to reach or unsafe areas, common in many homes after the passing of a major hurricane.

Moisture meters and thermal-imaging devices in their current form are fairly recent concepts that have significantly impacted the trade. These two items, when used together, are very effective in locating sources of leaks, water patterns and extent of moisture. The thermal-imaging device will depict a pattern of temperature differences through contrasting colors, while the moisture meter will indicate whether an item is wet or not and can even provide the percentage of wetness depending on the device.

However, please keep in mind that thermal-imaging devices only measure differences in temperature, and the manufacturers of those devices strongly suggest verifying the thermal readings with moisture meters for that very reason. A change in temperature does not equate to moisture in and of itself.

Finally, the best technological advancement for claims handling has been the portability of the computer, i.e. tablets and laptops. These portable computers were invented in 1981 and provide the ability to retain and organize the information obtained by all of the other advancements mentioned. They also allow you to carry large amounts of information regarding weather conditions, aerial photographs of insured properties and claims history.

Knowledge Base
Ultimately, the one thing that has not changed since Hurricane Andrew is that the insured continues to be your best source of knowledge. Remember that Florida Statute 626.854(15)(b) states in pertinent part that a “person acting on behalf of the insurer” should have “reasonable access at reasonable times to any insured or claimant.”

Use that reasonable access to chat with your insured about the loss while it is still fresh in their mind. Topics of interest should include the specific details of the loss, when the loss was first discovered, efforts at mitigation, and any individuals and companies that have helped with the claim. As to efforts at mitigation, make sure to ask what was done, who did it and how they did. This information will be essential to your handling of the claim to ensure all of the insured’s proceeds are used as efficiently as possible to put the home back to its pre loss condition.

Coupling your best source of knowledge with the information you secure during your claims handling and your grasp of the relevant law will be your recipe for success during the aftermath of Hurricane Matthew.

If you are in need of a quick refresher on the rights and duties included in the applicable statutes, get in touch with registered continuing education instructors who may already have this information in a course approved by the state.

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Filed under Claims Handling, Florida Statute 626.854 (15)(c), Hurricane Andrew, Hurricane Matthew, Insurance, Insurance Claims

Miami Woman Arrested and Charged in Insurance Fraud Scheme

According to the Palm Beach Post, Carmen Montalvo-Rivera of Miami was arrested and charged in Lake Worth, FL on Thursday, October 27th after investigators say she defrauded SUNZ Insurance Company. The arrest report states that Montalvo-Rivera’s shell company, Enterprises Remodeling Group Inc., used uninsured employers to do construction work. Once the job was finished, she would then cash the checks made out to the shell company in order to pay the workers in cash and severely underreport her company’s wages to the insurance company.

Montalvo-Rivera reported Enterprise Remodeling Group’s wages at $26,665 when they were actually $4,307,092.48. Her insurance premium should have been between $327,000 and $525,000 instead of the $1,796 premium she had been paying due to her fraudulent reporting.

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Filed under Florida, Insurance, Insurance Fraud, Miami-Dade County, Uninsured

Sixth Person Found Guilty in Unlicensed Chiropractic Clinics Scam

According to Southwest Florida Online News, a federal jury found Nesly Loute guilty of fraud after a six day trial where he and five others testified that they had conspired to operate five unlicensed chiropractic clinics and fraudulently billing auto insurers for Personal Injury Protection benefits. This ruling was the culmination of a two-year law enforcement investigation dubbed Operation Fraudulent Pain.

Loute and five other individuals who have also pleaded guilty are facing a maximum penalty of 20 years each in federal prison and must make restitution to the insurance companies they have defrauded. The unlicensed chiropractic clinics had received more that $2 million in fraudulent PIP payments.

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Filed under Auto Insurance Fraud, Florida, Insurance Fraud, PIP/No Fault, Uncategorized

Driverless Cars Will Fuel Surge In Product Liability Coverage

According to Law360, a surge in demand for product liability insurance will become a trend as advances in autonomous car technology continues to increase. These autonomous cars are removing humans from the equation, resulting in liability for accidents being shifted away from the drivers and toward the manufacturers of driverless vehicles and their hardware and software systems.

Questions regarding who would be held liable in crashes involving self-driving cars arose after a fatal accident in May involving a Tesla Model S that was equipped with partially autonomous braking and steering features. Although Tesla did state that the Model S brakes were to blame for the crash, not the autopilot feature, this event continues to attract concern from regulators and consumers.

“Experts say that as autonomous cars become more sophisticated and require less human input, the manufacturers of self-driving vehicles and their components will face more liability for accidents while individual drivers will face less.”

Subsequently, personal auto insurance pricing is expected to decrease significantly due to the decline in driver liability, while auto manufacturers and suppliers will see an increase in price for their product liability coverage.

“The entire auto insurance industry may be radically changed,” Pillsbury Winthrop Shaw Pittman LLP partner Peter Gillon said. “Drivers are the real risks these days and not the cars. The more you take driver error out of the equation, the more you are looking at an auto insurance market based on safety system performance and product liability.”

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Filed under Insurance

Federal Agents Arrest Participants in Medical Fraud Ring

On August 28, 2016, the Sun Sentinel reported the arrest of two women and a man who were part of a South Florida ring that staged fake car crashes. The ring aimed to defraud insurance companies by charging for massage therapy and chiropractic services to victims that did not need the medical treatment.

The defendants, Guillermo Garcia, 46; Mayre Lopez, 39; and Taymi Gonzalez, 35, were said to have collected more than $1.6 million over a span of two years from different insurance companies, including Allstate Insurance Company, Geico, Infinity, Metlife, Progressive, State Farm and Travelers of Florida. They all pleaded not guilty and are currently awaiting trial.

According to the indictment filed on August 4, the ring began in December 2012 and was carried out until September 2014 in Miami-Dade and other areas of South Florida. The indictment stated that the defendants had conspired to send fraudulent information and billing through the mail to auto insurance companies for alleged medical treatment from the clinic, Rehabilitation Tomasa.

According to the indictment, Gonzalez, Lopez and Garcia not only helped prepare fraudulent claims to insurance companies to validate treatment at Tomasa but also took part in training the ‘victims’ on what they should say to insurance representatives to deflect suspicion. The indictment stated, “ Garcia, Lopez and Gonzalez would deposit the checks into bank accounts they controlled and then convert the proceeds to cash in order to pay the recruiters, accident participants and clinic employees, and to enrich themselves.”

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Filed under Florida, Insurance, Insurance Defense, Insurance Fraud

Miami Police Arrest Twelve for Medical Fraud Schemes

On August 8, 2016, police arrested a dozen people in Miami-Dade County for their involvement in medical fraud schemes. Three of those arrested were employees of Brothers Medical Clinic on West Flagler St; which included a doctor, therapist and a woman who worked at the front desk.

According to detectives, the investigation began in September when an undercover officer walked into the clinic claiming he was involved in a car accident and needed therapy. The officer only visited that clinic once, but his insurance was billed thousands of dollars for services that were never provided.

“There wasn’t any type of treatment whatsoever,” an undercover detective with the National Insurance Crime Bureau said. “They were just billing the insurance companies for services not rendered, and this is something that goes on time and time again.”

The other nine arrests took place at a clinic in West Kendall.

“South Florida has become the capital of the country for medical fraud, and these types of clinics are an epidemic in the country,” said Miami Police Officer Rene Pimentel.

These fraudulent schemes are affecting insurance rates across the United States and are costing insureds hundreds of millions of dollars, where the sole beneficiaries are the clinics and doctors who facilitate these schemes.

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Filed under Insurance Fraud, Miami-Dade County

Medicare Ban on Non-emergency Ambulance and Home Health Care Agencies Continues

Friday the Centers for Medicare and Medicaid Services extended a temporary ban on nonemergency ambulance and home health care agencies throughout six states, including Florida, as a continued effort to fight fraud.

In continuing the ban on nonemergency ambulance services, the ban on new emergency ambulance services was lifted. The ban, originally only implemented in Miami, Chicago and Houston, was expanded in January of 2014 to combat fraud in other metropolitan areas seen as fraud hotbeds, specifically in Michigan, Pennsylvania and New Jersey. The ban has been expanded for additional six months after being in place for three years so far.

According to CMS, Texas, Florida and Illinois are in the lower third for number of patients per home health care provider. Despite this statistic, these three states have the highest number of home health care providers according to CMS data.

Shantanu Agrawal, CMS’ deputy administrator for program integrity commented on the program:

CMS is continuing its efforts to tackle fraud, waste, abuse and protect benefits and services for those eligible for federal health care programs. . . CMS is also increasing its oversight efforts through the use of heightened screening and investigative tools for new providers in the moratoria areas.

According to the National Health Care Anti-Fraud Association, as much as $60 billion is lost due to fraud, waste and abuse of the federal health care programs.

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Filed under Florida, Insurance, Insurance Fraud, Medicare, Uncategorized

Three from Miami Sentenced in $40M Medicare Fraud

Jorge Lorenzo, Yahima Pardo and Roberto De Jesus Alonso, all of Miami, were sentenced to prison and ordered to pay more than $40 million as a result of their involvement in what is considered the Medicare fraud scheme that caused the greatest loss to the government in 2015.

In addition to the nearly $40.4 million in restitution, the government seized over $2 million in cash and personal assets including Rolex and Cartier watches and artwork by prominent Cuban artists.

The case, before U.S. District Judge William Dimitrouleas, centered around Lorenzo’s ownership or control of 8 home health agencies in Miami-Dade County that received in excess of $40 million from Medicare as a result of fraudulent claims by way shell owners at each agency funneling claim payments to other fictitious companies staffed by co-conspirators. Once indication of a Medicare fraud investigation arose, Lorenzo would close the home health agency, keeping them open for only 8 months on average.

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Filed under Florida, Insurance Fraud, Medicare, Miami-Dade County, Uncategorized