Texas Department of Insurance Fraud Unit opened investigations into more than 550 insurance fraud cases in 2013.
More than $10.3 million in insurance fraud was identified in criminal cases referred for prosecution in 2013, the department said. Court-ordered restitution for cases that reached final adjudication during this same period totaled more than $7.5 million.
“The amount of insurance fraud committed in Texas is growing and the schemes to make false claims for insurance benefits are becoming more complex,” Texas Insurance Commissioner Julia Rathgeber said. “I would like to thank local prosecutors for their diligent efforts to combat fraud with all of the tools available to them. Together, we can build a strong line of defense against these crimes.”
These are the fraud unit’s top 10 cases for 2013:
Mike Klein filed continuous injury claims with his health insurer after his retirement from the San Antonio Fire Department. Klein forged paperwork from his doctor and supervisor in support of the claims. Klein pleaded guilty to insurance fraud, a second-degree felony. He was sentenced to 120 months deferred adjudication and ordered to pay $2,000 in fines and $117,140 in restitution.
- George Martinez was employed by multiple employers while he was receiving workers’ compensation benefits after being injured at his primary place of employment. Martinez did not notify his workers’ compensation insurance carrier of his other employment as required by law. Martinez pleaded guilty to insurance fraud and was sentenced to 48 months deferred adjudication. He was also ordered to pay $2,000 in fines and $7,196 in restitution.
- Christopher Purser and Robert S. Mills sold fictitious marine insurance to the owner of Shoreline Cruises of Lake George, NY. When the cruise ship Ethan Allen sank and killed 20 elderly tourists, the company was left with no valid insurance coverage. Purser and Mills pleaded guilty in U.S. Federal Court – Southern District of Texas to federal charges stemming from an investigation by the TDI Fraud Unit, the Internal Revenue Service, and the Federal Bureau of Investigation. Purser was sentenced to 188 months in prison. Mills was sentenced to 120 months in prison and was ordered to pay $2.45 million in restitution.
- In Dallas County, Sylvia Leyva-Talamantes billed Blue Cross and Blue Shield for 110 health claims for services that were not rendered. She received more than $28,131 in benefits from these false claims. Leyva-Talamantes pleaded guilty to insurance fraud, a second-degree felony. She received 120 months deferred adjudication and was ordered to pay $2,000 in fines and $28,131 in restitution.
- Leslie Ray Collins of Sugar Land, also a former insurance agent whose license was revoked in 2009, collected insurance premiums for fictitious residential and commercial insurance policies that he created. Collins failed to forward the premiums to an insurer to bind valid coverage but instead used the funds for personal benefit. He also obtained premium financing agreements on fake policies and kept those funds. Collins used the funds in a commercial real estate scam that resulted in the loss of several millions of dollars to investors. The Harris County 338th District Court convicted Collins of a first-degree felony of misapplication of fiduciary property with value of more than $200,000 and sentenced him to 12 years in prison. The court also ordered payment of $162,424 in restitution. This case was initiated by a complaint to the TDI Fraud Unit.
- Olanrewaju “Larry” Omoyele posed as owner/operator of Rose Tree Medical Clinic and caused different attorneys to file false claims with various insurers for treatment of patients allegedly injured in auto accidents. Neither the clinic nor the patients named on the insurance claims existed. Insurers paid a total of $114,382 to either Rose Tree Clinic, the attorneys, or to the people allegedly involved in the accidents. Omoyele went to trial and was found guilty of insurance fraud, a first-degree felony. He was sentenced to 84 months in prison and ordered to pay $131,182 in restitution.
- Former insurance agent Leon “Randy” Sinclair III of Houston convinced more than 30 elderly customers to liquidate insurance products and other assets and place the proceeds in charitable gift annuity accounts. Sinclair then misappropriated more than $16 million from the accounts. A Harris County District Court convicted Sinclair of first-degree felony misapplication of fiduciary property and sentenced him to 20 years in prison. The conviction followed a 16-month TDI Fraud Unit investigation.
- Sylvia Vazquez submitted false cancer treatment claims to her insurer, when in fact she had not been treated for cancer. Vazquez pleaded guilty to insurance fraud, a third-degree felony, and was sentenced to 120 months deferred adjudication, 120 hours of community service, and was ordered to pay $50,025 in restitution.
- Former licensed escrow officer Pearl J. Whitworth of Huffman fraudulently diverted customer funds to a Texas corporation for which Whitworth was the registered owner. Thirteen wire transfers, totaling more than $299,000, were made from the title company business account where Whitworth worked to her personal bank account. She pleaded guilty to first-degree felony theft, was sentenced to 120 months probation, and ordered to pay the full amount of the wire transfers in restitution. TDI revoked Whitworth’s escrow officer license.
- Richard Trevino, DBA Chiro-Health Inc., billed health insurers for $515,063 of chiropractic services that were not rendered and received $153,536 in reimbursements. Trevino pleaded guilty to insurance fraud, a first-degree felony. He was sentenced to 60 months probation, 200 hours of community service, and ordered to pay full restitution.
TDI is hosting its 16th annual Fraud Conference April 29 to May 1, 2014, in Austin. The conference provides an opportunity for insurance company investigators and local, state, and federal law enforcement to learn about new investigative techniques, fraud scams, changes in laws, and the capability to network with other professionals. More information about the conference can be found online at http://www.tdi.texas.gov/fraud/ConfMain.html
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