Volume 3 Number 44
October 30, 2006

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GALLAGHER ANNOUNCES 33 ARRESTS IN ONGOING CRACKDOWN ON STAGED ACCIDENTS, AUTO INSURANCE FRAUD  

Tom Gallagher, Florida’s chief financial officer, announced the arrests of 33 individuals suspected of setting up or participating in more than a dozen staged accidents and fraudulently billing 11 auto insurance companies nearly $1 million for treatment of non-existing injuries and auto damage claims. 

The arrests follow a two-year investigation that is part of a major crackdown by the Department of Financial Services’ Division of Insurance Fraud working together with the National Insurance Crime Bureau (NICB) and representatives of the insurance industry in fighting a problem that costs consumers millions of dollars a year.  One estimate indicates auto insurance fraud costs the average Florida family nearly $250 a year in higher premiums and higher costs for goods and services.

Staged accidents extract a toll on all of us as consumers and taxpayers, and both time and dollars are wasted by police and emergency services when they respond to a fake accident scene,” Gallagher said.  “We are committed to continuing this fight against auto insurance fraud and protecting our citizens from this abuse.”

In staged accidents, the planners and organizers, usually in connection with unscrupulous clinic owners, target the personal injury protection (PIP) insurance of drivers, and bill as much as $10,000 to insurance companies for each patient.  Florida law requires drivers to carry at least $10,000 in PIP coverage and $10,000 in property damage liability coverage. 

The department’s aggressive efforts along with tougher enforcement measures passed by the Legislature have been credited with lowering auto insurance rates in recent years.  The department’s Division of Insurance Fraud has made more than 1,100 PIP fraud arrests associated with $36 million in PIP fraud since 2001, and consistently has been recognized as leading the nation’s fraud bureaus in insurance fraud arrests and convictions.

Also, in an effort to combat this type of insurance fraud, the Legislature authorized the department to partner with the Florida Automobile Joint Underwriting Association and the Miami-Dade State Attorney’s office to hire two dedicated PIP prosecutors, Nina Vivenzio and Erika Isidron.  Together, they have overseen more than 500 PIP arrests in the past two years, significantly increasing the number of convictions.

The Division of Insurance Fraud was assisted with these arrests by Hialeah Police Department and the Florida Department of Corrections.  The insurance companies defrauded in this investigation include Allstate, Dairyland, FAJUA, Geico, Inscorp, Mercury, Ocean Harbor, Progressive, Reliant, Southern Group and State Farm.  Fourteen of the suspects face a minimum two-year prison term if convicted, and more arrests are anticipated. 

The case, dubbed “Totaled Recall,” involved suspects who purchased used vehicles, many with previous damage, for use in staged accidents.  Investigators said on several occasions tow truck drivers would transport an inoperable vehicle to a crash site and then wait for the police to finish their report so they could tow the same vehicle away.  Several body shops were also allegedly involved in creating additional damage to some vehicles to make the claims for property damage higher. 

The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance.  Anyone with information about this case or another possible fraud scheme should call the department's Fraud Fighters Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to a conviction.

Attached is a list of those arrested so far as part of this operation.

Arrests Made in Operation ‘Totaled Recall’

Staged Accident 08/30/02 – Fraudulent claims in excess of $143,000
Francisco Martin, 48, Miami

Staged Accident 11/20/02 - Fraudulent claims in excess of 70,000
Bairo Oliva, 47, Miami
Idas Oliva, 39, Miami
Giovanny Sierra, Miami
Juan Sierra, 29, Miami  

Staged Accident 01/16/03 - Fraudulent claims in excess of $182,000
Rosa Fernandez, 35, Miami
Alain Garcia, 36, Hialeah
Roxy Lohuis, 34, Miami
Miguel Plaza, 32, Miami

Staged Accident 02/20/03 - Fraudulent claims in excess of $39,000
Roberto Alvarez, 66, Miami
Osmani Cruz, 39, Miami

Staged accident 02/22/03 - Fraudulent claims in excess of $57,000
Pedro Olivera, 39, Miami

Staged Accident 04/27/03 - Fraudulent claims in excess of $74,000
Vila Castro, 40, Miami           

Staged Accident 07/14/03 - Fraudulent claims in excess of $73,000
Rolando Anton, 46, Miami
Iraida Enriquez, 29, Miami          

Staged Accident 09/20/03 - Fraudulent claims in excess of $52,000
Claudia Bermudez, 35, Miami
Maria Garcia, 49, Miami
Yolanda Ramos, 72, Miami
Berta Garcia, 52, Miami 

* Staged Accident 11/01/03 - Fraudulent claims in excess of $52,000
Pedro Benavides, 26, Miami
Ricardo Carrillo, 47, Boca Raton
Nidia Velez, 61, Pembroke Pines 

* Staged Accident 01/09/04 - Fraudulent claims in excess of $44,000
Caren Garcia, 36, Miami
Edgar Ibarra, 45, Miami           

* Staged Accident 01/18/04 - Fraudulent claims in excess of $33,000
Maria Dagostino, 27, Hialeah
Alejandro Madrigal, 30, Hialeah 

* Staged Accident 01/27/04 - Fraudulent claims in excess of $40,000
Miguel Diaz, 29, Miami
Zuleika Osorio, 25, Miramar
Pedro Puente, 41, Hialeah
Max Ricardo, 24, Miramar

* Staged Accident 02/27/04 - Fraudulent claims in excess of $27,000
Martha Gonzalez, 36, Miami
Gisela Medrano, 28, Miami
Ruben Salgado, 38, Miami 

(* = alleged offenses occurred after a new law took effect in October 2003 requiring a minimum mandatory two-year sentence for anyone convicted of participating in the staging of an accident) 

These participants were previously arrested in July 2004 for a staged accident on 02/10/04 with fraudulent claims in excess of $34,000:
Adriana Diaz
Mario Diaz
Miudis Diaz 

The clinics where participants were “treated” are:
Clinic Center – 3800 West 12 Ave, Hialeah
Healthright – 1414 NW 107 Ave, Suite 310, Miami (closed)
Injuries Rehab Center – 7801 Coral Way, Suite 132, Miami
JMC Medical Care – 7821 Coral Way, Suite 101, Miami (closed)
Physical Therapy & Medical Center – 285 NW 27 Ave, Suite 15, Miami (closed)
S L Medical Center – 4230 West 16 Ave, Hialeah (closed)