New York Superintendent Gregory Serio announced the Top 10 list of worst cases of insurance fraud in New York State during 2002. These ‘Rotten Apples’ were part of over 1,200 new cases investigated by the Department’s Frauds Bureau.
Worst among the offenders was a woman who claimed her ex-husband had been killed in the World Trade Center tragedy in order to collect on a life insurance policy. The investigation reportedly revealed that her ex-husband was alive and unaware of his ex-wife’s activities.
Another case involved a woman working for Blue Cross Blue Shield reportedly collecting money by fraudulently using the names of her family members on insurance claims. In another high profile case, in what is believed to be the largest ongoing investigation of insurance fraud in the State, the president, the vice-president and co-owner, and the general manager of a Suffolk County auto body shop were arrested for allegedly enhancing damages in order to jack up insurance claims. More than 450 arrests have been made thus far in this investigation, 305 in 2002 alone.
During 2002, the Frauds Bureau opened 1,205 investigations and made 707 fraud arrests. Below are the Top 10 ‘Rotten Apples’ for 2002:
Taking Advantage – A woman was arrested in Florida and returned to New York to face charges that she submitted a fraudulent claim for $500,000 in death benefits on behalf of the beneficiary, her 14-year old daughter. The defendant allegedly claimed that her ex-husband, whose life was insured by the policy, resided in New York City and died while at his job as an engineering maintenance worker at the World Trade Center on September 11. The investigation uncovered evidence that the insured was alive and living in Florida. He was unaware of his ex-wife’s activities.
Nice Digs – A resident and business owner in lower Manhattan was arrested in November and charged with insurance fraud and grand larceny. After being displaced from her apartment by the World Trade Center disaster, this suspect rented space at the Helmsley Carlton Hotel which she said was necessary for her to continue to operate her business. She reportedly filed a claim with FEMA for reimbursement of one month’s hotel bills and received payment. However, an investigation by the Frauds Bureau, FEMA, the Manhattan DA’s Office and Chubb Insurance Company revealed that she had previously filed a claim with Chubb for living expenses and received payment of $58,000.
Agent For Fraud – A licensed insurance agent was accused of taking insurance premiums from nine clients but reportedly failing to remit them to the appropriate insurer. He was also charged with issuing six fraudulent auto insurance identification cards and providing documents to a business owner indicating that the business had proper insurance coverage when in fact no coverage existed.
Electronic Shenanigans – Three Brooklyn residents were arrested and accused of defrauding Prudential Insurance Company of a total of $17,300. The charges allege that, in separate transactions, these defendants sought auto insurance by telephone, stating they would submit premium payments electronically to secure coverage. However, although no money was transferred, they were able to receive refunds when they later “cancelled” the coverage.
Daughter to the Rescue – A former insurance agent from Harrison, N.Y., was arrested and charged with stealing more than $91,000 from a life insurance company by allegedly forging the signature of an elderly client on an annuity refund check and keeping the proceeds. The theft was discovered by the victim’s daughter when she reviewed her family’s financial records.
Operation Street Sweep – Thirty individuals – including 24 car owners and six alleged middlemen – were charged in a $1.6 million undercover sting operation that resulted in the recovery of 68 reportedly stolen vehicles. Among those charged were a New York City public school teacher, a Long Island Rail Road engineer, a Manhattan registered nurse, a U.S. Postal Service worker and a Metropolitan Transportation Authority bus driver. According to the charges, the owners reportedly turned their cars over to middlemen to get rid of them, filed insurance claims falsely reporting the cars stolen and received settlements of as much as $32,000. The middlemen then sold the cars to undercover detectives posing as junkyard dealers for up to $1,500. The operation also led to the discovery of 33 false insurance claims that potentially could have cost various insurers $700,000.
I Do & I Do (Again) -Following the work-related death of her husband in 1980, a Long Island woman became the beneficiary of his workers’ compensation benefits, provided she did not remarry. On numerous occasions during the benefit period, she reportedly submitted written statements to the State Insurance Fund maintaining her single status. However, an investigation turned up evidence that she had remarried in 1990 and subsequently received nearly $110,500 in benefits under false pretensions.
Due Process – A claims processor for Blue Cross Blue Shield of Central New York was charged with insurance fraud, grand larceny and falsifying business records for reportedly submitting 138 fraudulent claims from November 2000 through March 2002, using the names of various family members. As result of these fraudulent claims, she received payments from Blue Cross Blue Shield of more than $103,000.
Assets Seized – In what is believed to be the largest ongoing investigation of insurance fraud in the State, the president, the vice-president and co-owner, and the general manager of a Suffolk County auto body shop were arrested for reportedly enhancing damages in order to jack up insurance claims. For the first time, investigators seized the assets of the body shop owners, including $117,000 in cash, $140,000 in various bank accounts and more than $1 million in commercial real estate. More than 450 arrests have been made thus far in this investigation, 305 in 2002 alone.
Ready, Willing & Able -An investigation resulted in charges being brought against 71 individuals and the recovery of 43 vehicles valued at more than $1 million. Among the 71 charged were 26 vehicle owners who allegedly falsely reported their cars stolen to obtain insurance settlements. This is the most recent in a series of undercover operations that are part of an investigation that began in July 2001 known as “Operation Ready, Willing and Able.” Working undercover, NYPD detectives set up a phony towing and wrecking garage called Able Towing and put the word out that owners could get rid of their cars with “no questions asked.” The illegal transactions were audio and video taped by the undercover investigators “working” at Able Towing.
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