CFO Alex Sink's Consumer eViews NewsletterFLORIDA CHIEF FINANCIAL OFFICER

Volume 6 Number 49 December 4, 2009


Dear Floridian:

As we enter the holiday season I know many of us are facing tight times, and our team at the Department of Financial Services is working hard to help Florida citizens on issues that are hitting close to home.

That’s why this year we have held over a hundred workshops throughout the state to help seniors learn to protect themselves against financial fraud and assist homeowners who are struggling to pay their mortgage. And that’s why this week I continued my fight for stronger oversight and greater accountability for the state pension fund that over a million Floridians depend on for a secure retirement, including Florida’s teachers, police officers, firefighters and state employees.

The holiday season is an important reminder of what we can achieve when we work together, and I am always proud of the work done by my team at the Department of Financial Services and grateful for the opportunity to serve the people of Florida.


Alex Sink
State of Florida

CFO Sink pushes for stronger pension fund oversight at Investment Advisory Council

Florida CFO Alex Sink presented her three proposals to improve the oversight of the state’s pension fund and protect Floridians’ retirement security at a meeting of the Investment Advisory Council (IAC) on Thursday morning. For nearly two years, CFO Sink has recommended reforms to strengthen the transparency, accountability and oversight of the state’s $110 billion public pension fund and other investment funds managed by the State Board of Administration (SBA).

“It takes more than three elected officials – none of whom are required to have prior investment experience – to oversee the $110 billion fund that our police officers, teachers and other state employees depend on for their financial future,” said CFO Sink. “I’ve proposed a more businesslike approach to overseeing the retirement security of almost one million Floridians who depend on our pension fund, and these common-sense reforms shouldn’t wait any longer.”

The latest of CFO Sink’s reforms to strengthen and enhance the oversight of the state’s pension fund were presented at a September 2009 Cabinet meeting. During that meeting, her motions were delayed by the other two members of the SBA Board of Trustees, Governor Crist and Attorney General McCollum.

The three specific reforms CFO Sink outlined today at the IAC meeting are as follows:

At the upcoming SBA Quarterly Board Meeting scheduled for next Tuesday, December 8, the trustees will vote on CFO Sink’s latest recommendations to expand the board and provide stronger oversight for Florida’s pension fund.

CFO Sink commends leaders headed to Copenhagen, calls for bringing green jobs back to Florida

Florida CFO Alex Sink on Wednesday commended the 25-person strong delegation from Florida attending the United Nations Climate Change Conference in Copenhagen this month. CFO Sink also called on the diverse delegation of leaders from the private and public sectors to seek out opportunities to grow Florida’s new energy economy during their trip.

“I’m hopeful that this strong delegation will help bring new, green jobs back to Florida, as we work to harness our state’s resources and make Florida an international leader in the green energy economy,” said CFO Sink. “I commend the delegation’s efforts to ensure that our state is well represented during these negotiations, and thank Enterprise Florida for their work to connect the delegation with important new energy businesses.”

CFO Sink has focused on new and renewable energy as an important part of growing Florida’s economy. During her tenure, she sponsored the CEO Roundtable for Florida Business on Renewable Energy; participated in an effort to mitigate the state's vulnerability to climate change through hurricanes; launched the "Conversations on Climate Change" series for the Florida Cabinet; and worked to help the insurance and investor community better understand climate change-related financial risk.

Orlando agent barred by CFO Sink found guilty for insurance fraud scheme

Florida CFO Alex Sink on Friday announced that an Orlando insurance agent she ordered barred for life from transacting insurance in Florida in August has been sentenced for third-degree felony grand theft after he submitted fraudulent insurance applications for family members and phantom employees in order to collect sales commissions. As part of his plea agreement, William Stanley Potocki, 44, was sentenced to 24 months of probation, 50 hours community service, and was ordered to pay more than $3,900 in restitution.

“Fraud doesn’t just hurt insurance companies, it inflicts real financial pain on families, businesses and communities because we all pay for fraud through higher insurance premiums,” said CFO Sink. “Our message is clear -- Florida will not tolerate fraud and if you attempt these types of scams you will be prosecuted. I also want to commend AFLAC for detecting and reporting this scheme.”

From November 2007 to February 2009, Potocki conducted business as an agent for American Family Life Assurance Company of Columbus (AFLAC) and provided insurance products to numerous businesses in Central Florida. An audit of his business records led the AFLAC compliance department to believe he was creating fraudulent insurance applications for family members and phantom employees of the companies he serviced. AFLAC‘s Special Investigative Unit referred the case to CFO Sink’s Division of Insurance Fraud for criminal investigation.

The Division of Insurance Fraud investigation confirmed that Potocki had submitted fraudulent insurance applications, and he was arrested on May 26, 2009. On August 24, 2009, the Division of Agent and Agency Services revoked the licenses of Potocki and his agency bearing his name, and permanently barred him from working in the insurance business in Florida.

DIF made over 800 insurance fraud-related arrests in the last fiscal year, and investigates various forms of insurance fraud relating to health, life, auto, property and workers’ compensation insurance policies. Depending on the estimated loss amount, the Department of Financial Services will pay up to $25,000 for information directly leading to an arrest and conviction. Anyone with information about this or any other suspected insurance fraud is asked to call CFO Sink’s Fraud Fighters Hotline at 1-800-378-0445 or visit to

Legal review confirms CFO Sink pension fund oversight reform can be done with legislative change

Florida CFO Alex Sink on Monday released an analysis from former Florida Supreme Court Justice Major Harding affirming that CFO Sink’s proposal to strengthen the oversight of the state’s $110 billion pension fund can be accomplished solely by a legislative change. When CFO Sink proposed expanding the Board of Trustees in September, it was questioned whether amending Florida’s constitution would be necessary, and Justice Harding’s legal analysis clearly states that it would not.

CFO Sink sent a letter to the Governor and Attorney General with Justice Harding’s analysis that “the Legislature has the power to redefine the composition of the authority supervising the Pension Fund.” CFO Sink has called for an expanded board to include one or more members with extensive relative investment experience and one or more members who is a beneficiary or participant in the Florida Retirement System.

“Nearly one million Floridians depend on the state pension fund for a secure retirement, and I have long advocated that oversight of these investments should include more than just three elected officials with no required financial experience,” said CFO Sink. “This independent legal analysis confirms that expanding the Board of Trustees can be done by a legislative change, and it’s time for the Governor and Attorney General to join me in pushing for this meaningful reform.”

CFO Sink’s letter and Justice Harding’s analysis are attached. She also copied the members of the Investment Advisory Council, whom she spoke to about her reforms at their meeting this Thursday, December 3.

The Advocate's Advice offers timely information for insurance consumers

The Office of the Insurance Consumer Advocate has just published its third quarterly newsletter, The Advocate’s Advice, with informational articles and advisories to communicate directly with the insurance consumers of Florida.

Headlines for this quarter’s newsletter include:

If you would like to subscribe to The Advocate's Advice, please select the “Subscribe” link in the left-hand column of the online newsletter. You may also visit past issues by selecting the previous issues link. Comments or suggestions  for future issues are welcome.

Read the newsletter:

The Insurance Consumer Advocate is appointed by Florida Chief Financial Officer Alex Sink and is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified.

CFO Sink busts Jacksonville insurance agent for hundreds of fraudulent applications

Florida CFO Alex Sink announced on Thursday that her Division of Insurance Fraud arrested Jacksonville insurance agent Kathren Zaazouh on two counts of insurance fraud. Zaazouh allegedly submitted approximately 225 bogus insurance applications and pocketed almost $46,000 in advance commissions. She faces a maximum sentence of up to 30 years in prison if convicted.

“Insurance fraud hits every single Floridian right in the wallet, because if unchecked it will hike up their premiums,” said CFO Sink. “We will continue to crack down on this type of insurance fraud and I commend our investigators for their diligent work in this case.”

Zaazouh worked for American Family Life Assurance Company of Columbus (AFLAC) until March 2009, when she was terminated following an investigation by AFLAC’s Special Unit Investigator. AFLAC then forwarded its findings to the Division of Insurance Fraud for criminal investigation.

The Division’s investigation found that Zaazouh submitted hundreds of applications with fake names of employees for several different businesses that had AFLAC group policies and created a fake business using a list of non-existing employees. Zaazouh was arrested December 1 and charged with Insurance Fraud and Organized Scheme to Defraud. She was booked into the Duval County Jail on a $250,000 bond.

CFO Sink’s Division of Insurance Fraud made over 800 insurance fraud-related arrests in the last fiscal year, and investigates various forms of insurance fraud, including health, life, auto, property and workers’ compensation insurance. Depending on the estimated loss amount, the Department of Financial Services will pay up to $25,000 for information directly leading to an arrest and conviction. Anyone with information about this or any other suspected insurance fraud is asked to call CFO Sink’s Fraud Fighters Hotline at 1-800-378-0445 or visit to

CFO Sink's department hosts 'Safeguard Our Seniors' workshop in Largo

Florida CFO Alex Sink’s Department of Financial Services, in partnership with the Lighthouse of Pinellas, presented a free workshop on Tuesday morning to educate seniors and their caregivers on how to be protected from financial fraud.

CFO Sink’s Safeguard our Seniors initiative, launched more than a year ago in response to increasing reports of financial scams targeting seniors, is focusing on educating and informing caregivers about how they can help protect the seniors they care for from financial fraud.

To learn more about CFO Sink’s Safeguard Our Seniors initiative and about what to consider when purchasing annuities, visit Floridians who believe they may have been victims of financial fraud should call toll-free 1-877-MY-FL-CFO or (850) 413-3089 or log on to to file a complaint.

Newspaper highlights Florida couple helped at Housing Help Workshop

Since January CFO Sink and the Department of Financial Services have held over 50 Florida Housing Help workshops throughout the state to assist homeowners who are struggling to pay their mortgage. At a workshop this week in Naples, CFO Sink’s Department and her community partners were able to help Rex and Sarah Fritchey of Lehigh Acres, both 71, who will now take steps to modify their mortgage in an effort to save their home.

The Naples Daily News reported on the Fritcheys’ experience at the workshop, which you can read here.

Other struggling homeowners like Mr. and Mrs. Fritchey can attend one of CFO Sink’s Florida Housing Help workshops to speak directly to lenders, legal aid, and community resources. To learn more about CFO Sink’s Florida Housing Help initiative, visit

Upcoming Florida Housing Help events:

Wednesday, December 9 at 5:00 p.m. Florida Housing Help - Free Legal Clinic War on Poverty-Florida (inside Gateway Mall) Gateway Mall, 5196-A Norwood Ave, Jacksonville, FL

Tuesday, December 15 at 6 p.m. Foreclosure Prevention Workshop Greenacres City Community Hall, Swain Blvd, Greenacres City, FL

Wednesday, December 16 at 5 p.m. Florida Housing Help Workshop Joseph P. D'Alessandro Office Complex (State Building) 2295 Victoria Ave., Fort Myers, FL 33901

Consumer Corner: Common mistakes when purchasing product warranties

The holiday shopping season is now in full swing as consumers hit the shopping aisles to find that perfect Christmas present for someone special. It’s easy to get in the holiday spirit with Bing Crosby’s “White Christmas” playing through the overhead speakers, and while you might think the greatest danger to your wallet is in the aisles, where you might be tempted to overspend, it’s really at the checkout line.

Store employees are often coached on how to encourage consumers to purchase a warranty or extended service plan to protect their purchases. And if you’re a consumer. it’s hard not to think about the dreaded possibility of your shiny new laptop breaking and needing an expensive repair. Time magazine points out that private companies offer warranties to make a profit because they need to take in more money than they pay out in warranty claims. The profit margin on extended warranties is reputed to be between 40 percent and 80 percent.

Consumer Reports (CR) states that extended warranties are almost always bad deals for consumers, and here's why:

If you're really leaning toward purchasing the warranty anyway, CR recommends that you not pay more than 20 percent of the purchase price of the product. Always try to negotiate a better price.

If you decide to purchase a warranty on electronics, keep in mind that many times you can get a better extended warranty from the manufacturer of the product, at a lower price. There are some extended warranties that may actually benefit you, and the key is to weigh the pros and cons rather than feel pressured by the salesperson.

My Family CFO: Beware the cyberscams of holiday shopping

According to Consumer Reports, cybercriminals have bilked $8 billion from consumers in the past two years. Watch for scams and cheats when you are web shopping this holiday season.

McAfee security company is warning of the most common swindles crooks will use to get your money as you cybershop. Crooks often pretend to sell you something that will never ship and also operate by grabbing your identity or gaining access to your bank account.

According to Jeff Green, senior vice president of McAfee Labs, these thieves follow seasonal trends and create holiday-related web sites, scams and other convincing e-mails that can trick even the most cautious users.

Scam 1: Charity phishing - be careful to whom you give
Scam 2: Fake invoices from delivery services to steal your money
Scam 3: Social networking - a cybercriminal wants to be your friend
Scam 4: The dangers of holiday e-cards
Scam 5: Luxury holiday jewelry comes at a high price
Scam 6: Practice safe holiday shopping - online identity theft on the rise
Scam 7: Christmas carol lyrics can be risky searches
Scam 8: Outbidding for crime – auction site fraud
Scam 9: Password theft is rampant
Scam 10: E-mail banking scams through official-looking e-mails

Read more about these cyberscams.

Don’t let the crooks get away with it! Never click on links in suspicious e-mails, which can easily redirect you to false or misleading web sites. If you create a new account use a unique password with letters and symbols, rather than using the same password for all of your logins.

Chief Financial Officer Alex Sink's Consumer eViews 1-877-MY-FL-CFO