FLORIDA CHIEF FINANCIAL OFFICER TOM GALLAGHER'S WEEKLY NEWSLETTER
Volume 3, Number 33, August 14, 2006
After being pummeled by eight hurricanes in 15 months that left nearly $40
billion in insured losses, we have learned how important it is to take every
step possible to protect our homes and families against these devastating
Now, thousands of Floridians will have an unprecedented opportunity to get a
free home inspection and learn how they can strengthen their homes. The
Department of Financial Services is now taking applications for a $250
million program that will inspect as many as 50,000 homes over the next
The department is proud to be able to roll out this program within 60 days
of it becoming law on July 1. In addition to working fast, we have worked
hard to make this program available to as many Floridians as possible while
working to provide the most qualified inspectors.
As we are entering the height of this year’s hurricane season, please also
take the time to review your family’s hurricane plan. You should have a
hurricane kit, available on the department’s website at
www.MyFloridaCFO.com, that includes all of your
important financial documents, as well as a hurricane pack with supplies for
everyone in your family, including pets, to last at least 72 hours.
We each must take responsibility for our own preparedness, both in the
short-term and in the long-term. Make sure you are ready for the current
hurricane season, and then log on to
learn how you may qualify for a free inspection to prepare for future
-- Tom Gallagher
GALLAGHER FILES CHARGES AGAINST DIRECT GENERAL AGENTS FOR ‘SLIDING’ EXTRA
CHARGES TO DOZENS OF CUSTOMERS
Tom Gallagher, Florida’s chief financial officer, announced that he has filed administrative charges against 12 agents and
customer representatives of Direct General Insurance Agency for “sliding”
ancillary products in consumers’ automobile insurance policies without their
knowledge or consent, a scheme that cost policyholders as much as 44 percent
extra on their premiums.
Gallagher oversees the Department of Financial Services, and the charges
follow an investigation by the department’s Division of Agent and Agency
Services, Bureau of Investigation, and the Division of Legal Services.
Direct General operates more than 100 agencies in Florida doing business as
Florida No Fault Insurance, Insurance Options Plus, Friendly Auto, and Cash
Register among others. If the charges are upheld, the licensees could face
revocation of their licenses. Gallagher said he will also seek restitution
for affected consumers.
“Florida’s insurance professionals should be driven by their clients’ best
interests, not commissions,” Gallagher said. “This department will continue
to rigorously prosecute agents who violate the law and violate that trust.”
Those agents charged are Thomas Aquinas McCullom of Gulf Breeze (12 counts);
Paula Beckett (four counts) and Roger Dale Scites (seven counts), both of
St. Petersburg; Kim Suzanne Velez of Ft. Myers (eight counts); Radcliffe H.
McKenzie (12 counts) and Alberta Mitchell (nine counts) both of Sunrise;
Katherine Anne Fitzgerald of Zellwood (four counts); Jenny R. Caddell of
Middleburg (five counts); and Lekeisha Chavon Paige of Jacksonville (three
In addition to eight counts of sliding, customer representative Cecilia Maus,
of Cottondale, was charged with three counts of sliding products she was not
licensed to sell, and Marie B. Jean, of Riviera Beach, another customer
representative, was charged with eight counts of sliding and two counts of
unlicensed activity. Earlier this month, Direct General customer
representative Denise D. Turnbull settled sliding and unlicensed activity
charges leveled by the department, by agreeing to pay restitution and
serving a six-month suspension of her insurance licenses followed by a
To verify an agent’s license or file a complaint, consumers should log on to
www.MyFloridaCFO.com or call the department’s toll-free consumer helpline at
GALLAGHER: ONGOING CRACKDOWN ON
PIP FRAUD SNARES 3
Tom Gallagher, Florida’s chief financial
officer, announced that the Department of
Financial Services’ ongoing crackdown on personal
injury protection (PIP) insurance fraud has led to
the arrests of three individuals – including a
father and daughter – on felony charges stemming
from staged accidents and more than $40,000 in
fraudulent auto insurance billings. Four others were
previously arrested in related cases, and further
arrests are anticipated.
“We are sending a clear message that we will not
tolerate abuse of our citizens, and fraud steals
from our citizens,” said Gallagher. “Our efforts
have led to lower auto rates in recent years, so we
will continue to aggressively pursue those who would
defraud the system.”
These investigations are part of an ongoing
crackdown by the department’s Division of Insurance
Fraud in collaboration with the National Insurance
Crime Bureau (NICB).
Lorenzo Morales, 51, is accused of arranging and
directing a February 2004 staged accident in which
his daughter, Yuliana, 19, participated. According
to witnesses, Lorenzo Morales drove the at-fault
vehicle into a second vehicle and then fled the
scene before police arrived. Morales and his
daughter billed State Farm Insurance Company for
more than $25,000 for unnecessary medical procedures
Berlitz Bourjolly, 45, of Pembroke Pines, is accused
of organizing a July 2003 staged accident that
resulted in more than $15,000 in fraudulent PIP and
bodily injury claims filed with Geico Insurance
Company. Bourjolly, also known as “Dr B,” allegedly
paid the cost of the rental car used for the
accident, and also paid participants up to $1,000
for their involvement. Bourjolly then referred
participants for bogus medical treatment to a clinic
called ECM Medical, located at 8325 NE 2 Avenue,
Suite 100, in Miami.
Investigators believe that Bourjolly was a runner
who graduated to operating his own clinic. In fact,
Bourjolly was arrested outside his clinic, Fast
Recovery Rehabilitation, located at 6151 Miramar
Parkway, Suite 206, in Miramar, which was
incorporated in June 2005.
In staged accidents, the planners and organizers,
usually in connection with unscrupulous clinic
owners, target the personal injury protection (PIP)
insurance of drivers, and bill an average of $10,000
to insurance companies for each patient. Auto
insurance fraud is estimated to cost the average
Florida family as much as $250 a year.
Since 2000, the department’s Division of Insurance
Fraud has made more than 1,100 arrests, bringing to
a halt more than $36 million in fraudulent PIP
claims. In Miami alone, those arrests include 741
patients, 81 clinic owners, 31 doctors, 67 clinic
employees and 159 runners.
In an effort to step up the fight against this
fraud, the division entered into a partnership with
the Florida Automobile Joint Underwriting
Association and the Miami-Dade State Attorney’s
office and hired Nina Vivenzio as a dedicated
prosecutor for PIP fraud in 2004. There are now two
dedicated PIP prosecutors, after Erika Isidron
started in February 2006. Together, they have
overseen more than 450 PIP fraud arrests.
The Department of Financial Services, Division of
Insurance Fraud, investigates various forms of fraud
in insurance, including health, life, auto, property
and workers' compensation insurance. Anyone with
information about this case or another possible
fraud scheme should call the department's Fraud
Fighters Hotline at 1-800-378-0445. A reward of up
to $25,000 may be offered for information leading to
PROGRAMS GEARED TOWARD YOUNG
Today's students are a purchasing powerhouse.
Teenagers spent $175 billion in 2004, according to Chicago-based Teenage
Research Unlimited. The average American teen spends $103 a week!
But while teens are spending billions of dollars, most of them have little
or no "real world" financial experience. Many young people do not realize
that the financial decision they make on a daily basis will affect their
The Florida Department of Financial Services (DFS) has taken an active
role in helping young consumers — including students, singles and young
married couples — learn more about financial responsibility.
In 2004, Chief Financial Officer Tom Gallagher launched the Web site,
comprehensive public education initiative designed to help students, young
people and families learn the basics about personal finances.
This Web site is tailored to meet the needs
of Florida residents. It offers clear, reliable, helpful advice on financial
topics confusing to many — yet absolutely vital to all of us.
With the help of some of Florida's most trusted financial institutions, the
Web site aims to cover every important money topic under the Florida sun —
from buying a home or car, to saving for retirement, investing, reducing
debt, establishing good credit, planning for college, and defending against
Wheels, Deals & Spiels is a program designed by DFS for high school and
college students to introduce them to the concept of making financial
decisions on their own.
The program discusses important financial topics such as credit card
management, purchasing consumer products, how to calculate payment options,
auto insurance, verifying licenses of car dealers, lenders, and insurance
agents and other businesses, as well as identity theft.
Students have the opportunity to use the interactive calculator at
see what their monthly payments would be on purchases such as an automobile.
There are nine interactive calculators to help consumers see where their
finances stand and where they may need to improve.
DFS takes an active role in assisting local governments and community
agencies that provide HUD-approved first time home ownership training.
This training provides many young people with the decision-making tools to
make the many financial choices involved in purchasing their first home.
DFS provides the future homeowners an educational class that explains the
essentials of homeowner's insurance, the features and benefits of their
policy and what the policy does or does not pay for.
The Florida Fair Lending Act and how to avoid deceptive loan tactics are
also a part of the presentation. The Web site offers a mortgage payment
calculator to take consumers through the process of finding out how much
they can borrow.
A consumer fills in the data entry fields and clicks on the "View Report"
button to see a complete amortization schedule of their mortgage payments.
The goal of the first-time home ownership training is to make sure young
consumers purchase a home they can afford and maintain (taxes, insurance and
repairs) over a reasonable amount of time without causing a financial
Chief Financial Officer Tom Gallagher's annual essay contest is a part of
DFS's statewide public education initiative aimed at encouraging investor
education among middle and high school students.
The contest, "Cash in on Your Money Smarts," offers teens a chance at more
than $7,500 in prizes statewide.
Finally, I'd like to challenge businesses and chambers of commerce to
work with their school districts to create a financial literacy programs at
all grade levels, if they do not have one already.
Young consumers will be purchasing, saving and investing their money for a
long time. The more enhanced their financial decisions, the more they will
increase Florida's economic growth for many years to come.
If your school, business, chamber or community group would like to
sponsor a program or want more information about DFS's Financial Literacy
programs, contact us at the phone number below. You can also visit our Web
site, www.MyFloridaCFO.com, or contact the division of Consumer Services at
Consumer Services HelpLine (800) 342-2762