Gallagher Announces New Resource, Legislative Remedies to Fight Insurance Fraud
CONTACT: Tami Torres or Nina Banister
MIAMI—Tom Gallagher, Florida's chief financial officer, announced today that a new resource for fighting insurance fraud, coupled with legislative remedies he is pursuing, will strengthen efforts to combat auto insurance fraud, including tougher criminal penalties for "paper" and "phantom" automobile accidents, and revoking the licenses of drivers who commit auto insurance fraud.
The new resource, Miami-Dade County Assistant State Attorney Erika Isidron, will be the second prosecutor in Florida dedicated to putting criminals who commit auto insurance fraud behind bars. Isidron, a prosecutor for the last six years, most recently served as a chief of one of the felony trial divisions in the Miami-Dade State Attorney's Office, overseeing prosecution of serious felony offenses such as sexual battery, armed robbery and homicide.
"Increasing our investigative force and pursuing tougher laws will strengthen our ability to put scam artists behind bars and enforce our message that we intend to put the brakes on this costly crime," said Gallagher, who oversees the state's Division of Insurance Fraud (DIF).
Many auto insurance fraud cases involve unscrupulous lawyers, doctors and clinic owners who illegally bill for services covered by personal injury protection (PIP) coverage, which provides up to $10,000 for medical bills from an auto accident, regardless of who is at fault. Florida law requires drivers to carry a minimum of $10,000 in PIP coverage and $10,000 in property damage liability coverage.
Isidron joins Nina Vivenzio, another Miami-Dade assistant state attorney, who has been dedicated to prosecuting PIP fraud for almost two years. Gallagher said that having a dedicated prosecutor like Vivenzio on insurance fraud cases has resulted in at least a 20-percent increase in prosecutions.
Building on hard-hitting legislation passed in 2001 and 2003, Gallagher this year will ask the Legislature to approve additional reforms including:
• Make it a second-degree felony to do "paper" or "phantom" automobile accidents, with a minimum mandatory two-year prison sentence. "Paper" or "phantom" accidents occur when a driver files a fraudulent accident report on a crash that never happened and then bills the insurance company for medical services never rendered.
• Make it a third-degree felony for any service provider, such as a clinic or body shop, to waive insurance deductibles as a general business practice. Waiving deductibles makes it easier for individuals to profit from PIP fraud schemes.
• Revoke a person's driver license if they commit auto insurance fraud.
• Re-enact the crash reports exemption to restrict the release of police accident reports, which are often used for illegal solicitation.
• Require medical clinics to post the state's Fraud Fighter reward program hotline and reward program information.
Gallagher said that fraud detectives have made more than 1,000 PIP fraud-related arrests since 2001. In Miami-Dade County, PIP fraud arrests have steadily increased, last year by 25 percent when 254 arrests were made. PIP fraud arrests in 2005 included 185 "patients" of which 159 were involved in staged accidents, 17 clinic owners, 18 clinic employees, 1 doctor and 31 runners.
"I commend our investigators and prosecutors for their tenacity in making our state a national leader in combating insurance fraud," Gallagher said. "We will not give up the fight to protect Floridians from the danger and cost inflicted by insurance fraud schemes."
Gallagher's anti-PIP fraud proposals are sponsored by Rep. David Rivera (House Bill 561) and Sen. J.D. Alexander (Senate Bill 1596).
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Tom Gallagher 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. Gallagher also serves as the State Fire Marshal.