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CFO Atwater Announces Dozens More Arrests Made During Operation Flames and Floods 2

5/20/2015

Contact: Ashley Carr
(850) 413- 2942
 
MIAMI, Fla. – CFO and State Fire Marshal Jeff Atwater, alongside Miami-Dade State Attorney Katherine Fernandez Rundle, today announced 30 more arrests made during the second wave of a collaborative state and local operation known as “Operation Flames and Floods.” The investigation exposed an extensive scheme in which a Miami public adjuster named Jorge Espinosa recruited homeowners to stage fire and water damage claims in residential homes in order to defraud multiple insurance companies. Previously arrested in February 2014 for crimes related to this fraud ring, investigators have since uncovered 25 more fraudulent claims tied to Espinosa, representing total losses of more than $14 million.

“It is clear that this scheme was driven by greed, and unfortunately, it is the honest policyholders in our state who are left on the hook to cover the millions of dollars that were stolen,” said CFO Jeff Atwater. “I am proud of the work of our investigators, and I am grateful for the support of the Miami-Dade Police Department’s Arson Unit and Miami-Dade County State Attorney Katherine Fernandez Rundle for helping us to hold these individuals accountable.”

"These insurance thieves were making their money by reaching into the wallets of every honest citizen of Florida", said Miami-Dade State Attorney Katherine Fernandez Rundle. "Their profits come from our pain and hard work. That is why these arrests are so important."

Operation Flames and Floods began in November 2012 as a joint investigation between the Florida State Fire Marshal’s Office and the Miami-Dade Police Department’s Arson Unit. In February 2014, 14 people were arrested after 13 homes were intentionally set on fire and five more reported staged water damage. As a result of the fraud, multiple insurance carriers incurred more than $7.6 million in reported losses.

Further investigative efforts uncovered 25 more claims tied to this fraud scheme, representing an additional $6.7 million in fraudulent claims paid by the following insurance companies: Tower Hill Insurance Group, Citizens Property Insurance, Federated National Insurance Company, GEICO, Bankers Insurance Group, Southern Fidelity, Mercury Insurance, State Farm, Florida Peninsula, Ascendant Commercial Insurance, United Property and Casualty, Ark Royal Insurance and Southern Oak Insurance.

“Insurance fraud is not a victimless crime,” said Tower Hill Insurance Group President Don Matz. ”In fact, it impacts insurance policyholders around the state through increased rates that are required to recoup the funds stolen through these fraudulent acts.”

“We applaud the efforts of CFO Atwater’s office and the Miami-Dade State Attorney Katherine Fernandez Rundle, and we are glad to have played a part in this investigation,” said Joseph Theobold, Citizens Director of Special Investigations. “Insurance fraud translates into millions of dollars in costs paid by our policyholders. We must remain diligent in rooting out fraud.”

The Sarasota, Lee, Collier and Highlands County Sheriffs’ Offices assisted with this week’s arrests, along with the Florida Fish and Wildlife Conservation Commission.

Anyone with information about suspected insurance fraud is asked to call 1-800-378-0445. Anyone with information about suspected arson is asked to call 1-877-NO-ARSON, and those who provide tips can choose to remain anonymous. The Department of Financial Services has awarded $365,000 to 63 people as part of its Anti-Fraud Reward Program. The program rewards individuals up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.
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Chief Financial Officer Jeff Atwater, a statewide elected official, oversees the Department of Financial Services. 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. Follow the activities of the Department on Facebook (FLDFS) and Twitter (@FLDFS.)