Volume 1 Number 24
June 14, 2004

TEXT-ONLY VERSION

Insurance and financial fraud costs us all, whether through higher premiums or through higher costs for goods and services.

In an ongoing effort to help educate consumers about fraud, the Department of Financial Services issues an annual Top 10 Fraud List that summarizes some of the costliest or boldest fraud cases that resulted in arrests or convictions during the past fiscal year. The cases cited in the 2003-2004 Top 10 Fraud List, released today, add up to more than $820 million in financial losses.

One of my top priorities as Florida’s Chief Financial Officer is to educate consumers so they can make informed financial decisions. The department’s web site at www.MyFloridaCFO.com provides sites for checking the license status of agents, brokers and companies authorized to transact business in Florida, offers free consumer information on a range of important issues, and allows consumers to file a complaint or question on line.

Remember to “Verify Before You Buy.” Visit our web site or call our toll-free consumer helpline at 1-800-342-2762 if you have questions about an insurance policy or are considering an investment.

CFO GALLAGHER RELEASES ANNUAL TOP 10 FRAUD LIST

2003-2004 Top 10 cases add up to more than $820 million in losses

Florida’s Chief Financial Officer Tom Gallagher released the Department of Financial Services’ annual Top 10 Fraud List, which summarizes 10 of the costliest or boldest securities, financial and insurance fraud scams that resulted in arrests or convictions during the fiscal year that began July 1, 2003, and ends June 30, 2004. The 10 cases, listed in no particular order, add up to more than $820 million in financial losses.

“Fraud schemes are becoming more complex and more costly,” Gallagher said. “My best advice for consumers continues to be - if it sounds too good to be true, it probably is.”

The release of the annual Top 10 Fraud List coincides with the 12^th annual Florida Insurance Fraud Education Council Conference, which begins today in Orlando. Hundreds of insurance fraud investigators and prosecutors are expected to attend the three-day conference to learn about the latest insurance fraud schemes and investigative techniques. In December, the department’s Division of Insurance Fraud was again identified in an annual study by the Coalition Against Insurance Fraud as leading the nation in insurance fraud arrests.

Gallagher said consumers must conduct their own due diligence. “Ask questions, read all paperwork and give yourself plenty of time to make an informed decision,” he said. CONTINUED

GOVERNOR BUSH SIGNS 'AFFORDABLE HEALTHCARE FOR FLORIDIANS ACT' ^{^{Bill
will improve care, increase access to healthcare insurance and enhance
transparency.}}

Governor Jeb Bush signed House Bill 1629, the Affordable Healthcare for Floridians Act. The legislation will provide increased access to healthcare insurance by creating a more stable and competitive market, raise the quality of care and patient safety and improve transparency by giving consumers the information they need to make the best healthcare choices.

"This bill improves access to affordable health insurance in our state," Governor Bush said. "By signing this legislation, we will open the door to improvements in the health insurance market, create a more consumer driven market and ultimately increase access to healthcare insurance for all Floridians."

"We have heard from so many hardworking individuals and small employers who are struggling to obtain, and even maintain, health insurance," said Chief Financial Officer Tom Gallagher, who co-chaired the Governor's Task Force. "Signing this healthcare package into law will help employers maximize their insurance purchasing power, offer consumers increased protections and access to health information, and expand coverage options, especially for low-income Floridians." CONTINUED

Pete Dunbar will serve as general counsel for the Department of Financial Services

CFO GALLAGHER TAPS SEASONED PUBLIC SERVANT AS DEPARTMENT OF FINANCIAL SERVICES’ GENERAL COUNSEL

Florida’s Chief Financial Officer Tom Gallagher announced today that Pete Dunbar, a 30-year law veteran who has served as a state representative and as general counsel for former Governor Bob Martinez, has been chosen to serve as general counsel for the Florida Department of Financial Services.

Dunbar, a partner at Pennington, Moore, Wilkinson, Bell and Dunbar, P.A., will join the department in his new role on July 1.

“Pete Dunbar brings tremendous experience and expertise to a department that carries a wide range of responsibilities, from overseeing the state’s accounting and auditing functions, to investigating insurance fraud, to helping thousands of insurance consumers each year,” said Gallagher, who oversees the Department of Financial Services. “I am extremely pleased that he has agreed to lead our legal division.” CONTINUED

HOMESTEAD COMPANY OWNER MUST PAY RESTITUTION

The owner of a South Florida drywall and plastering company has been ordered to pay $110,000 in restitution after entering a no contest plea to two counts of workers’ compensation insurance fraud.

Kraig Wayne Bryan, 33, owner of B&D Drywall, Inc., was arrested in May 2003 following an investigation by the Department of Financial Services, Division of Insurance Fraud. State fraud investigators determined that Bryan underreported his payroll by at least $800,000 to avoid $140,000 in workers’ compensation premiums. CONTINUED

TEMPORARY STAFFING COMPANY ORDERED TO STOP WORK

State investigators discover that business employed Russian college students without providing workers’ compensation

ST. AUGUSTINE-A local temporary staffing company which employed visiting Russian college students has been ordered to cease business operations after state investigators with the Department of Financial Services learned the company was operating without required workers’ compensation coverage.

“Employers who avoid paying workers’ compensation premiums contribute to the rise in workers’ compensation rates and gain an unfair advantage over competitors,” said Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services. “We will continue to aggressively investigate instances of fraud and abuse of the workers’ compensation system.” CONTINUED

MASCOTTE MAN ARRESTED FOR ATTEMPTED MURDER AND ARSON

Investigators with the state’s Division of State Fire Marshal and the Mascotte Police Department have arrested a local man for setting fire to the home of his ex-wife, while his three children and the woman were inside. All escaped unharmed.

Investigators say Epifanio Rodriguez, 32, of Bocaciega Road in Mascotte, forced entry into the home and started a fire in the family room on fire while the children and their mother hid in another room. Rodriguez was charged with four counts of attempted murder and one count of 1st degree arson. Rodriguez’s ex-wife and children escaped through a window and fled to a neighbor’s home. ^CONTINUED

TWO MIAMI INSURANCE AGENTS FACING FRAUD, THEFT CHARGES

Two insurance agents are facing charges of insurance fraud and grand theft for allegedly collecting more than $25,000 by padding legitimate automobile accident claims with fictitious victims.

Harold Rasco, 29, of Hialeah, was arrested this morning at his 5362 W. 20th Ct. home, and Abel Henriquez, 27, of Miramar, has agreed to surrender on the charges later today. Rasco is charged with two counts of insurance fraud and one count of grand theft, while Henriquez faces six counts on each charge. The Department of Financial Services’ Division of Insurance Fraud, began an investigation after receiving information about the alleged scheme from U.S. Security Insurance Company’s Special Investigations Unit.

“The potential loss was much bigger, and I am grateful to U.S. Security for uncovering this so quickly,” said Florida’s Chief Financial Officer Tom Gallagher, who also oversees the Department of Financial Services. “Insurance fraud costs us all and wreaks havoc with Florida’s economy.” CONTINUED