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CFO Atwater Announces 17 Arrests in Miami-Based Auto Insurance Fraud Bust

3/2/2011

Contact: Alexis Lambert
(850) 413-2842

TALLAHASSEE- At a press conference today in Miami, Florida’s Chief Financial Officer Jeff Atwater joined Miami-Dade County State Attorney Katherine Fernandez Rundle to announce the results of Operation Dark Horizon, the largest Personal Injury Protection (PIP) bust since the CFO took office.  The Miami-based investigation by Atwater’s Division of Insurance Fraud today resulted in the arrests of 17 individuals including a clinic owner, doctors, clinic employees and staged accident recruiters.  Eight additional individuals have been charged and are being sought by investigators.

“This case is just one example of the hundreds of similar fraud schemes run daily by accident clinics operating throughout Florida,” said CFO Atwater. “The fraud schemers bill insurance companies for procedures that never happen, and we all get stuck with the bill through increased auto insurance premiums.”

According to the Insurance Information Institute, on average Floridians pay an additional $100 for two cars in the driveway to cover auto insurance fraud.  According to CFO Atwater, “If you multiply that by the 11 million cars in our state it amounts to a nearly billion dollar fraud tax.”

“When professional healers become professional criminals in order to make some easy cash, all of us lose, and this insurance fraud scheme could not have worked without medical professionals claiming serious injuries where none existed,” said Miami-Dade State Attorney Katherine Fernandez Rundle.  “Lies upon lies upon lies led to dollars upon dollars upon dollars for all the parties charged today.  I applaud the work of the Division of Insurance Fraud investigators, who put the evidence pieces together to allow my prosecutors to properly charge these individuals.  This is far from the end of our efforts to fight such frauds.”

The 25 individuals charged so far in Operation Dark Horizon face 142 various charges including racketeering, staging an accident, insurance fraud, grand theft and organized scheme to defraud, and now collectively face up to 1,115 years in jail.  Those charged with staging an accident face a minimum mandatory sentence of two years in prison, if convicted on the charge, and up to 30 years in prison if convicted of organized scheme to defraud.  Additional arrests are anticipated.
 
The arrests stem from fraudulent billings filed by five clinics, including New Horizon Practice in Miami, Medico de la Familia in Hialeah, Coral Way Rehabilitation Services, Therapium Health Corp. and AB Diagnostic. 
 
Fraud detectives’ investigation uncovered that New Horizon Practice owner, Elsa Terrero, allegedly solicited the staging of accidents and directed the participants where to go for treatment, and Dr. Gerald Amado signed documents for follow-up visits that never occurred and treatments that patients never received.

At Medico de la Familia, employees recruited and paid patients to come to the clinic, and coached patients on how to commit fraud by advising they go through at least one treatment so they know what is involved should the insurance company ask questions.  Dr. Gustavo Acosta signed documents for examinations he allegedly never provided.  Employees at all of the clinics involved obtained or created fraudulent documentation that was then submitted to insurance companies for payment.
 
The special investigation units of each of the insurance companies targeted in this fraud scheme, Gainsco, Imperial Fire & Casualty, Mercury Insurance, Geico, and State Farm, provided substantial assistance in the operation, along with the U.S. Secret Service Miami Electronic Crimes Task Force and the National Insurance Crime Bureau (NICB).

According to the NICB, Florida has three of the top five cities nationally for questionable medical claims associated with staged accidents—Tampa, Miami and Orlando.  During the upcoming legislative session, CFO Atwater is recommending several policy solutions to strengthen billing practices, create civil penalties and tighten requirements for clinic ownership to help bolster the fight against PIP fraud.

This case is part of a continuing crackdown by CFO Atwater’s Division of Insurance Fraud and the National Insurance Crime Bureau in the fight against auto insurance fraud in Florida.

Chief Financial Officer Jeff Atwater, a statewide elected official and officer of the Florida Cabinet, oversees the Department of Financial Services including the Division of Insurance Fraud.  CFO Atwater’s priorities include fighting financial fraud, abuse and waste in government, reducing government spending and regulatory burdens that chase away businesses, and providing transparency and accountability in spending.