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CFO Sink Joins U.S. Attorney, Fbi in Announcing 25-count Indictment in $100 Million Fraud Case

4/19/2007

CONTACT:  Tara Klimek or Nina Banister 
(850) 413-2842   
 
JACKSONVILLE—Florida Chief Financial Officer Alex Sink today joined Acting U.S. Attorney James R. Klindt and Federal Bureau of Investigation (FBI) Special Agent in Charge Michael J. Folmar in announcing a 25-count indictment charging five suspects in a $100 million workers’ compensation fraud scam that left hundreds of workers in Florida and throughout the United States without urgently needed medical care.
 
“We found one victim homeless, living in her car, because of mounting medical bills, and five families left with no death benefits after fatal accidents,” said CFO Sink, who oversees the Department of Financial Services. “Floridians suffered greatly and did not receive needed medical care and workers’ compensation benefits because these individuals were interested only in enriching themselves.”
 
The indictments unsealed today named Jerry M. Brewer, 56, Capistrano Beach, Calif., currently residing in England; Donald E. Touchet, 53, El Cajon, Calif.; Dr. Richard E. Standridge, 58, Tempe, Ariz., Robert J. Jennings, 59, Danville, Ill.; and Joshua Poole, 33, Atlanta, Ga.  Three of the men are facing 215 years or more in prison if convicted on the counts against them.
 
The joint investigation began in 2002 after the department’s Division of Workers’ Compensation issued a stop-work order for failure to secure workers’ compensation insurance against now-defunct Jacksonville-based MiraLink Group, Inc., a leasing company with 20,000 employees.  Detective Tommy Clark with the department’s Division of Insurance Fraud determined that MiraLink was using an unauthorized entity, Regency Insurance of the West Indies, and that Regency was issuing bogus workers’ compensation policies throughout the United States.   As the investigation broadened to include the Federal Bureau of Investigation and the U.S. Attorney’s Office, evidence mounted that various employee leasing organizations knowingly bought Regency’s bogus policies and knowingly put workers at risk.
 
Thomas King, owner and operator of MiraLink, is facing a possible 20-year prison sentence, and an order to pay $5.8 million in victim restitution, at his sentencing scheduled May 6.  King was arrested in 2005 on 23 federal counts of wire fraud, mail fraud and money laundering and was found guilty on all 23 counts last September.
Michael Lee McCafferty, the former chief executive officer of TTC Illinois, was sentenced on Wednesday to 33 months in prison and was ordered to pay $7 million in restitution for his part in the scheme. Before filing for bankruptcy in 2001, TTC was one of the nation's largest employee leasing organizations with headquarters in Kankakee, Ill., branches in Tampa and Boca Raton, and clients in 40 states.
 
In addition to the Division of Workers’ Compensation and the Division of Insurance Fraud, the department’s Division of Agent and Agency Services also played a key role in the investigation.  The Office of Insurance Regulation also assisted.
 
After Detective Clark began to realize the scope of the alleged scam, he sought assistance from FBI Special Agent Doug Matthews and United States Attorney Mark Devereaux. Clark and Matthews conducted interviews of suspects in Arizona, Illinois, Alabama, Kentucky, and South Carolina in relation to the Florida victims.  As a result of their collective work, the FBI designated the investigation as a “major case” in 2004, drawing in more resources.
 
“I want to thank every investigator, every attorney, and every crime analyst who helped bring these men in to justice,” said CFO Sink.  “Providing workers’ compensation coverage is both a legal and a moral obligation, and we owe it to these injured workers and surviving families to make these individuals answer for what they did.”

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.