ARRESTS MADE IN $2 MILLION MORTGAGE FRAUD RING

Florida Chief Financial Officer Alex Sink announced today the arrests of two title agents believed to be part of a six-member mortgage fraud ring suspected of duping several mortgage lenders and a homeowner out of nearly $2 million. 

The arrests stem from a joint investigation between the Department of Financial Services, Division of Insurance Fraud (DIF), and the Office of Financial Regulation (OFR), and focused on real estate transactions on five properties located in Dade, Broward, Palm Beach and St. Lucie counties. On all of these properties, bogus mortgages were obtained using false HUD-1’s, sham appraisals, bogus second mortgages, false verifications of employment, earnest money that was never received and other fraudulent documents.

“These kinds of schemes cause real economic harm to Floridians and our state’s economy,” said CFO Sink.  “I commend the investigators for unraveling this scheme and working with the Office of Statewide Prosecution to get charges filed against these individuals.”

On Friday, the investigation led to the arrests of Pamela Jones Johnson, 38, of Parkland, and Elena Gunter Granderson, 43, Pembroke Pines, each on a charge of organized scheme to defraud.  If convicted on that charge, each could face up to 30 years in prison.  Four other defendants are still being sought; one is believed to be in South Florida and three are being sought in the New York area.

The charges stem from alleged mortgage fraud connected to two properties in Port St. Lucie, one property in Tamarac, one property in Hialeah and one property in West Palm Beach. The scheme involved falsifying borrower qualifications and submitting fraudulent documents to mortgage lenders which reflected non-existent second mortgages.  The scheme also caused a homeowner to lose their home after it was sold to a straw buyer in lieu of foreclosure and the homeowner was ultimately evicted.

DIF’S lead detective was Ted Padich, and OFR’s lead investigator was Steven Brignola. 

Anyone with information about this case or any other suspected fraud case is asked to 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 an arrest and conviction.

CFO SINK BANS AGENT WHO MISLED SENIOR, ORDERS SON TO PAY RESTITUTION

Florida Chief Financial Officer Alex Sink announced today that she has permanently barred an insurance agent from involvement in Florida’s insurance industry and his son, also an agent, has been ordered to pay restitution for duping an elderly client into annuity deals that resulted in her suffering surrender charges and adverse tax consequences.

Hunter Stephen Bowen, Sr., 57, and Hunter Stephen Bowen Jr., 32, both of Ocala, allegedly convinced the woman to surrender several annuities, which she had bought over a period of time from Bowen, Sr., in favor of a new annuity carrying with it years of surrender charges.

“It is unconscionable that anyone would knowingly take advantage of a senior citizen who is relying on his or her advice to help with their financial security,” said CFO Sink.  “I especially encourage seniors who have any questions about financial decisions to call the department for guidance, because there are people out there who will target them because they have a lifetime of savings.”

In lieu of fighting the administrative charges filed against him, Bowen, Sr. agreed to the revocation of his license, and he is also permanently banned from the insurance business in Florida.

Hunter Stephen Bowen Jr. has been ordered to pay restitution of $6,000 and an administrative penalty of $2,500.  He has also been ordered to cease and desist from engaging in any future violations of the Insurance code, including conduct involving the misrepresentation of the terms or conditions of annuity or life insurance products. Misrepresentation in the sale of annuity and life insurance products may include either the misrepresentation of the terms and conditions of products and transactions, but also material omissions with respect to those products and transactions.

CFO Sink urges Floridians preparing to make financial decisions to read all documents, make sure their questions are answered and to verify information about agents and companies by logging on to www.MyFloridaCFO.com or calling 1-800-342-2762. 

Viatical Company Pleads Guilty to Racketeering, Fraud

Chief Financial Officer Alex Sink and Attorney General Bill McCollum announced that Mutual Benefits Corp., once the largest viatical settlement company in the country, pled guilty in Broward County Circuit Court to criminal charges of racketeering and numerous counts of investment fraud. The criminal charges filed by the Office of Statewide Prosecution were a direct result of the investigation conducted by the Department of Financial Services, Division of Insurance Fraud. The Florida Office of Insurance Regulation has since revoked the company's certificate of authority.

The viatical industry frequently involves the discount purchase of life insurance policies from an insured individual who has been diagnosed as being terminally ill. Investors become named beneficiaries and upon death of the insured are paid the full amount of the policy. The profit is based upon the projected life expectancy of the insured. Fraudulent life expectancies issued by Mutual Benefits left many investors with false expectations and investments that could not meet their advertised terms.

“Thousands of investors were financially harmed by the extensive fraud perpetrated by this company, and I am pleased that our investigation has resulted in criminal and civil actions that reflect the serious nature of these crimes,” said CFO Sink. “We will continue to do all we can to protect Floridians and to aggressively pursue anyone who seeks to defraud our citizens.”

Today’s plea concludes a lengthy joint investigation by the Attorney General’s office and the Department of Financial Services, Division of Insurance Fraud. The Department of Financial Services began investigating criminal allegations against Mutual Benefits in 1999. Authorities discovered that during the bidding process for the policies, principals of the company were setting the life expectancies of the insured persons prior to any medical review and sending backdated life expectancy letters to the investors. As a result of this fraudulent scheme, policies were not maturing as promoted in marketing materials and investors were not realizing the investment return promised by Mutual Benefits. The company sold policies worth more than $1 billion to over 30,000 investors worldwide.

“This company intentionally defrauded thousands of people, offering the ‘once-in-a-lifetime’ deal,” Attorney General McCollum said. “My office and the Department of Financial Services share the common goal of protecting the citizens of our state. I thank them for partnering with us to bring this company to justice.”

The U.S. Attorney’s Office filed criminal charges against Peter Lombardi, the president of Mutual Benefits, who was sentenced to 20 years in prison earlier this year. Federal charges were also filed against Clark Mitchell, the doctor who falsified the life expectancies. Mitchell pled guilty and faces up to 10 years in prison. He is scheduled to be sentenced later this month. Victim restitution is being handled by a receiver who will be monitored by a federal district judge.

In February of 2000, the Fifteenth Statewide Grand Jury issued a report on the viatical industry which led to broad legislative changes regulating the industry in the State of Florida, primarily geared to consumer protection. Since that time, there have been sweeping changes in the operations of viatical settlement companies licensed in the State of Florida.

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 any other suspected fraud case is asked to 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 an arrest and conviction.

As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.

BROWARD COUNTY DENTIST FACES GRAND THEFT CHARGE

Florida Chief Financial Officer Alex Sink announced today the arrest of a dentist who allegedly billed the Fort Lauderdale Police Health Trust Fund for more than $18,000 in dental services that were never rendered.

Dr. Amy Masri, 35, was arrested Wednesday and charged with grand theft following a joint investigation between the Department of Financial Services, Division of Insurance Fraud (DIF), and the Fort Lauderdale Police Department.  She was booked into the Broward County Jail.  If convicted on the charge, she faces up to five years in prison in addition to possible fines and restitution.

“This individual is accused of stealing money needed to provide care to police offers and their families,” said CFO Sink.  “This is an affront to the men and women who serve and protect our citizens, and it is a crime that should be aggressively prosecuted.”

The Fort Lauderdale Police Health Trust Fund is operated by the Fort Lauderdale Fraternal Order of Police Lodge 31 and is a self-insured fund that provides health insurance coverage for active as well as retired members of the Fort Lauderdale Police Department and their families. 

According to investigators, Masri not only submitted fraudulent claim forms for services that were not rendered to actual patients, she also allegedly submitted fraudulent claim forms under her maiden name, Amy Kienast, claiming to be the patient receiving the treatment. The fraud allegedly began in 2003.

An internal claims review by the Economic Crimes Unit of the Fort Lauderdale Police Department brought the suspicions to light.  Ultimately, the execution of a search warrant led to interviews with several patients, which resulted in the charge.  John Swope was the lead detective for DIF.

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 any other suspected fraud case is asked to 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 an arrest and conviction.

PENSACOLA MEN CHARGED WITH ARSON AND CONSPIRACY

Florida Chief Financial Officer Alex Sink, who also serves as State Fire Marshal, said two men, including one who has been convicted twice before of arson, are facing numerous felony charges after setting fire to a mobile home in January.

Detectives in the State Fire Marshal’s Office, Bureau of Fire and Arson Investigations (BFAI), arrested William Charles Schrader, 50, on charges of first-degree arson, burglary and conspiracy. He faces up to 30 years in prison, in addition to fines and possible restitution, if convicted on all of the charges. Joseph Anthony Donovan, 37, was arrested on charges of first-degree arson and conspiracy and faces up to 25 years in prison, in addition to fines and possible restitution, if convicted on all of the charges. Both men were booked into the Escambia County Jail.

“Arson will not be tolerated in this state,” said CFO Sink. “These men put the lives of innocent people at risk, including firefighters and other responders, and we will do all we can to assist prosecutors in ensuring these men get the maximum penalty under the law.”

Investigators said the two men were in Donavon’s home on Independence Avenue and, according to witnesses, began discussing ways to burn down the mobile home next door because they considered it an eyesore. The two men then allegedly walked out toward the mobile home and moments later the home was in flames. No injuries were reported.

Schrader was previously arrested in September 1997 by Lt. Kevin Fiedor of the BFAI on charges of arson, burglary, and criminal mischief after burning his estranged wife’s shed. He served four years and seven months and was released in November of 2001. Schrader also was convicted of arson in 1979 after being charged by Holly Hill Police Department.

The lead detective in the investigation that led to this week’s arrests is Chris Powell.

The Bureau of Fire and Arson Investigations is a law enforcement branch of the Division of State Fire Marshal that assists other state and local fire and law enforcement agencies in the investigation of fires of suspicious origin. Anyone with information about this case or any incident of fire is asked to call 1-877-662-7766 (1-877-NOARSON).

BROWARD COUNTY MAN CHARGED WITH INSURANCE FRAUD

Florida Chief Financial Officer Alex Sink, who also serves as State Fire Marshal, announced the arrest this week of a Broward County man on a charge of filing false and fraudulent insurance claims in connection with two fires at his mobile home.

Carl Hickey, of Weston, allegedly used old photos of his home, taken before it was damaged by the first fire, to apply for new insurance. He then submitted a claim for the second fire allegedly based on the fraudulent application. Hickey was arrested Tuesday by State Fire Marshal arson investigators and was booked into the Broward County Jail. If convicted on the charges, he faces up to five years in prison on each charge in addition to restitution and possible fines.

“Insurance fraud is a costly crime that results in higher premiums for everyone,” said CFO Sink. “That’s why we take insurance fraud seriously and will pursue investigations aggressively.”

The fires remain under investigation, and anyone with information is urged to call 1-877-662-7766 (1-877-NOARSON).

Investigators said that in late 2005 the Coconut Creek mobile home park where Hickey’s home was located was being sold and that the mobile homes had been ordered vacated from the park. On December 26, 2005, a fire occurred at Hickey’s mobile home and caused extensive damage. Hickey filed an insurance claim with Citizens Insurance Company. After the first fire, Hickey again insured the mobile home and told the new insurance agent that there was no damage and allegedly presented old photographs showing an undamaged mobile home. On January 15, 2006, the mobile home had a second fire, and Hickey submitted a second insurance claim to Citizens Insurance.

The Bureau of Fire and Arson Investigations is a law enforcement branch of the Division of State Fire Marshal that assists other state and local fire and law enforcement agencies in the investigation of fires of suspicious origin. Anyone with information about this case or any incident of fire is asked to call 1-877-662-7766 (1-877-NOARSON).

ST. LUCIE COUNTY WOMAN CHARGED WITH ARSON TO AN OCCUPIED DWELLING

 A St. Lucie County woman who allegedly set fire to an apartment to get revenge on her boyfriend has been arrested on a charge of arson to an occupied dwelling.

Detective Greg Gilkey, with the State Fire Marshal’s Office, Bureau of Fire and Arson Investigations, arrested Jeannette Tressley, 24, on Thursday.  She was booked into the St. Lucie County Jail on a $25,000 bond.   If convicted on the charge, she faces up to 30 years in prison.

No one was injured in the December 1, 2006, fire at the apartment complex located at 1905 Avenue North, but two apartments were heavily damaged including one that had residents in it at the time of the fire.

The Bureau of Fire and Arson Investigations is a law enforcement branch of the Division of State Fire Marshal that assists other state and local fire and law enforcement agencies in the investigation of fires of suspicious origin.  Anyone with information about this case or any incident of fire is asked to call 1-877-662-7766 (1-877-NOARSON).