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Two Unlicensed South Florida Clinic Owners Use Straw Owner to Defraud Insurance Companies of More Than 650,000

1/22/2016


Contact: Ashley Carr
(850) 413-2842
 
MIAMI, Fla. - The Florida Department of Financial Services’ Division of Insurance Fraud (DIF) today announced the arrest of two unlicensed clinic owners from Miami-Dade County. Noel Ruiz of Miami and Alberto B Franco of Hialeah were involved in a “straw owner” scheme that defrauded numerous insurance companies, resulting in more than $650,000 in financial losses.

An investigation led by DIF revealed that in the time between December 2012 and September 2014, Alberto Franco and Noel Ruiz both failed to carry the proper licensing required to own a rehab clinic and allegedly used a “straw owner” to bypass Florida’s licensing requirements.

A “straw owner” is a person who owns a business or property on someone else’s behalf. By portraying legal ownership of the property or business through legal documentation, the actual owner of the business is essentially left off of the books. In some cases, this scenario would occur as a legal way to keep the identity of the actual owner of the entity hidden. In other cases, a “straw owner” would act as a pawn to establish a business in order for unlicensed agents to conduct nefarious or illegal transactions under a legitimate license.

DIF’s investigation revealed that Noel Ruiz was the actual owner of Rehab and Wellness Inc., a physical therapy clinic in Miami. Alberto Franco was the actual owner of Magic Hands Rehabilitation Center Inc., another physical therapy clinic in Miami. Unbeknownst to their straw owners, Ruiz submitted dozens of claim files to insurance companies for fictitious rehabilitative services totaling over $361,880 and Franco also submitted dozens of claim files to insurance companies for illegitimate rehabilitative services totaling $297,677.

Both Ruiz and Franco were arrested on January 14, 2016, and booked into Turner Guilford Knight Correctional Center on charges of operating an unlicensed clinic, insurance fraud, grand theft, and an organized scheme to defraud. 
 
These cases are being prosecuted by the office of Miami-Dade County State Attorney Katherine Fernandez Rundle and if convicted, Alberto Franco and Noel Ruiz face up to 30 years in prison.
 
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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).