Volume 2 Number 21 May 23, 2005

TEXT VERSION

Hurricanes pose a very real risk to Floridians, but with adequate and early preparation, you can effectively safeguard your family and property from devastating losses.  It is critical for families to take the time to prepare before storms threaten and this year dollars can be saved by preparing early. The Legislature has instituted a hurricane preparedness sales tax holiday for certain hurricane supplies. This is the first year for the tax break which provides that no sales tax, state or local, will be collected on hurricane items from 12:01 a.m. June 1 to midnight June 12. The governor signed this bill into law today in a ceremony in Pensacola. Items from inexpensive candles, flashlights, batteries, coolers, first aid kits, radios, tarps, and portable generators are among qualifying merchandise, but plywood is not. Families and business who were prepared prior to the 2004 disasters recovered better physically, emotionally and financially than those who were not prepared for the storms. Over the last nine months, my office has been helping Florida residents recover from the fury of Mother Nature. In order to learn lessons from last year’s storms and share them with all Floridians, I traveled the state and met with more than 3,000 Floridians during town hall meetings in Florida’s hardest-hit areas. My office has fielded more than 350,000 consumer assistance requests based on last year’s storms. By combining the invaluable testimony collected with my experiences in dealing with Hurricane Andrew and Hurricanes Charley, Francis, Ivan, and Jeanne, my office is able to make the following hurricane preparedness recommendations to all Floridians:  Review your homeowner’s insurance policy  If you don’t like your policy, shop around for a new one Conduct a home inventory and take stock in what you own and what it is worth  Invest in preventive measures like shutters, reinforced glass or even plywood  Take advantage of mitigation discounts for protecting your home  Start your own disaster savings account to assist your recovery in a worst-case scenario  These six steps Floridians can take, in addition to disaster planning recommendations by the Red Cross and National Hurricane Center, can help protect from the heartache experienced by so many last year. In addition, the Florida Department of Financial Services offers a wide range of consumer services. I encourage you to visit us at www.MyFloridaCFO.com or call us at 1-800-22-STORM. I urge that everyone take the necessary precautions, and I wish all Floridians a safe and uneventful 2005 hurricane season.   Lake County, the 43rd county, was established  May 27, 1887, being taken from Orange and Sumter counties and named for the large number of lakes within its boundaries. The courthouse, above, was built in 1924.

GALLAGHER WANTS FLORIDIANS TO BE BETTER PROTECTED THIS HURRICANE SEASON After an unprecedented hurricane season last year and experts predicting the formation of more than 13 named Atlantic storms this season, Florida’s Chief Financial Officer Tom Gallagher is issuing a warning to consumers: Prepare now.  The official start of hurricane season is June 1 and it ends November 30. “Last year’s storms were a powerful reminder that homeowners need comprehensive insurance coverage, including flood coverage,” said Gallagher, whose agency worked with tens of thousands of homeowners devastated by losses.  “Review your insurance coverage and make sure it’s adequate so you can protect what you’ve worked so hard to build.” Nearly 1.7 million insurance claims, representing $21 billion in losses, were filed after four hurricanes inflicted damage in 54 of Florida’s 67 counties last year.  CONTINUED

GALLAGHER ANNOUNCES ARRESTS IN PONZI SCHEME ARRESTS MADE IN PALM BEACH GARDENS AND DELRAY BEACH Florida’s Chief Financial Officer Tom Gallagher today announced the arrests of two insurance agents on first-degree felony charges following a year-long investigation.  Thomas A. Masciarelli and Steven Petrarca were each booked on one count of Aggravated White Collar Crime and one count of Fraudulent Investment Transactions.  Agents arrested Masciarelli at his home in Palm Beach Gardens and arrested Petrarca at his business in Delray Beach this morning.  They face up to six years in prison if convicted.  The two are charged with operating a Ponzi scheme which scammed an estimated $1.2 million from 31 investors.  They were arrested by investigators from the Department of Financial Services’ Division of Insurance Fraud, which Gallagher oversees. “It never ceases to amaze me the schemes these crooks come up with,” said Gallagher.  “The bottom line remains, we will not put up with Florida’s investors – particularly our vulnerable elderly investors – being preyed upon.  The investigators who sniffed this case out deserve a lot of credit, this was heads-up work.” CONTINUED

JACKSONVILLE INSURANCE AGENT SENTENCED TO THREE YEARS IN PRISON, $366,000 IN RESTITUTION FOR SWINDLING SENIOR CITIZENS An insurance agent is facing three years in prison and has been ordered to pay more than $366,000 in restitution after he convinced at least six elderly clients to cash in their annuities and reinvest in other insurance products, but instead he used the proceeds for his personal benefit.  Two of the victims, who ranged in age from 68 to 79, have since died. Thomas Larry Griggs, 48, operated Griggs Financial Services in Jacksonville and was a licensed insurance agent.  On April 28, Fourth Judicial Circuit Court Judge Michael Weatherby handed down the sentence on a first-degree felony charge of schemes to defraud, based on an investigation by the Department of Financial Services, Division of Insurance Fraud.  The restitution was ordered in a separate proceeding on May 5. “This individual rates among the lowest of the lowest in my book,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services.  “His clients trusted him to look after their best interest, and he betrayed that trust.  We will continue to pursue those who prey on our citizens with all the means at our disposal, and I thank everyone who helped bring this agent to justice.” CONTINUED

LOTTERY SCAMS RELY ON TRUST OF VICTIM Crooks convince people to help cash worthless tickets   A senior citizen from Naples was recently scammed outside of a grocery store in a fake lottery ticket swindle. Lottery ticket scams are not new - they are a derivative of the classic "pigeon drop," an example of a confidence game.   In a confidence game you are persuaded to buy worthless property. The expression "con man" originated from these types of frauds. There are three parties involved in confidence games, the con artist, an accomplice called a shill and the victim who is called a mark or pigeon.   The lottery ticket scam works like this:   You are approached on the street by someone who claims to have won the lottery. The swindler has the winning lottery ticket in his hand and shows it to you. The con man (or woman) wants you to cash in the ticket because he/she can't for a variety of reasons. CONTINUED

FLORIDA OFFICE OF INSURANCE REGULATION ISSUES ORDER  The Florida Office of Insurance Regulation has joined the ever-increasing tide of regulatory bodies seeking answers from American International Group, Inc. (AIG).  AIG operates 43 licensed insurance entities in the State of Florida.    The Office has issued an order to these companies that they must turn over information regarding AIG’s admitted misrepresentations on financial statements.   The financial community has been rocked with the results of investigations by the Securities and Exchange Commission (SEC) and other regulatory bodies which have led to subsequent admissions by AIG that certain reinsurance transactions were misrepresented on the company’s financial statements.   AIG’s admissions appear to indicate violations of both federal and state laws. CONTINUED