Consumer eViews

Volume 3, Number 43, October 23, 2006

Whether we are fighting insurance fraud, arson or a financial scam, protecting Floridians from fraud and abuse is our top priority at the Department of Financial Services.   

Just a few years ago, we saw a rapid rise in complaints regarding viatical, or life, settlements. Viatical settlement brokers and providers match those who want to sell their life insurance policies at a discount with investors willing to buy the rights to those policies.  However, scam artists infiltrated the industry and the department ended up taking action against 16 viatical settlement companies for fraud and deception, among them Mutual Benefits Corporation, a company that defrauded nearly 30,000 investors.  Today, an accountant who headed up Mutual Benefits is expected to plead guilty to securities fraud.  

Last year, I stood with Gov. Jeb Bush as he signed a law defining viatical settlements as “securities” and placing regulatory authority over the viatical industry with the Office of Financial Regulation.  Our purpose in pushing for this legislation was to allow us to effectively root out and prosecute the fraudulent operators in this industry and protect Floridians from being duped out of their hard-earned savings because of pie-in-the-sky promises made by dishonest viatical operators.    

It is estimated that viatical fraud has cost investors at least $2 billion since 1996, and the average age of those defrauded by viatical companies is 70 and the average amount swindled is $40,000.   

We will not tolerate anyone taking advantage of our citizens, and the news of today’s plea indicates our aggressive actions are working. 

 -- Tom Gallagher


Tom Gallagher, Florida’s chief financial officer, announced that free home inspections will soon begin in Palm Beach, Martin, St. Lucie and Indian River counties for nearly 2,200 homeowners who applied through the My Safe Florida Home program. The program, funded with $250 million by the Florida Legislature, was created to better protect Floridians by strengthening their homes against hurricanes and to reduce the state’s exposure to hurricane damage.

“Before this hurricane season ends, my goal is to provide 12,000 free home inspections across the state to help Floridians strengthen their homes and better protect their families against catastrophic storms,” said Gallagher, who oversees the Department of Financial Services which administers the My Safe Florida Home program. 

Gallagher said that homeowners in Palm Beach, Martin, St. Lucie and Indian River counties who have already submitted completed applications will be contacted by a department-approved inspector to schedule an inspection.  The department has already received 1,935 completed applications and will be able to serve another 265 homeowners in these four counties.  Future applicants will be served with additional funding of the My Safe Florida Home program.

Following an inspection, homeowners will receive a report that outlines up to seven areas that could be improved to better protect the home against hurricanes, an estimate of how much improvements would cost, the expected insurance savings the homeowner would receive if improvements were made, and a rating of the home’s current ability to withstand hurricanes and its future ability to withstand hurricanes with improvements.

Gallagher said that the expansion into Palm Beach, Martin, St. Lucie and Indian River counties is possible thanks to a partnership with the Federal Alliance for Safe Homes (FLASH) to screen and train an additional 350 inspectors.

Applying and obtaining a free home inspection is just the first step of the program.  Homeowners who undergo the My Safe Florida Home inspection may also qualify for matching grants of up to $5,000 to fortify their homes.  As directed by the new law to reduce hurricane exposure and property losses in Florida, grants will be prioritized and awarded to homeowners who live in high-risk, hurricane-vulnerable areas of the state.

Since the My Safe Florida Home program launched in late August, approximately 5,300 inspections have been completed or scheduled in Broward, Miami-Dade and Lee counties.  To ensure each county receives a fair share of free home inspections, the My Safe Florida Home program is limiting the number of inspections in each county based upon population.  Applicants who do not receive a free home inspection before this limit is met will have their applications held for future phases of the program. 

Eligible Floridians must live in a single-family, site-built home with an insured value of $500,000 or less and have a valid homestead exemption.  Documents verifying this information must be submitted with a completed application.  Floridians can apply on-line at or by calling 1-800-342-2762 to get an application packet.


Tom Gallagher, Florida’s chief financial officer said that the Florida Department of Financial Services is partnering with Wal-Mart Stores and the local Better Business Bureau to host a 2006 Senior Day Expo in Pensacola.  The event will take place on Saturday, November 4 from 9 a.m. to 3 p.m. at the Wal-Mart Supercenter, located at 2650 Creighton Road.  The event is free and open to the public.

“Florida is currently home to more than 2.9 million Floridians over the age of 65 and that number is projected to grow by as much as 30 percent over the next 10 years,” said Gallagher, who oversees the department.  “Many seniors have so much to keep up with – their health, family and finances – and they are interested in getting information and assistance to help them juggle these priorities.  This Expo is a collaborative effort to help educate seniors about the services available to them in Northwest Florida.” 

Gallagher said the event will feature more than 20 different non-profit and service agencies whose missions are to serve Florida’s senior citizens, including the Council on Aging, Hospice of the Emerald Coast, and Consumer Credit Counseling Service.  Attendees can also take advantage of free preliminary eye exams and learn more about Wal-Mart’s new $4 generic drug program.  Free food and beverages will also be provided.

“Every opportunity we have to empower Florida’s seniors is an opportunity to better and strengthen our community,” said Cliff Long, community outreach coordinator for the department and chairperson for the event.  “We are excited to partner with Wal-Mart and the Better Business Bureau to make this event a success.” 

Gallagher said that the department also has a comprehensive website that offers Florida’s seniors valuable information, including shopping for long-term care or Medicare supplements, or finding ways to grow their money with investments or steer clear of financial scams. The Florida Department of Financial Services senior website can be found by logging on to


Florida’s Chief Financial Officer Tom Gallagher and Dade County State Attorney Katherine Fernandez Rundle announced the arrest of Charles I. Ogugua for stealing state education funds. Specifically, Ogugua is believed to have accepted state scholarship funds for students who were not enrolled in Ogugua’s school. The arrest stems from an investigation by the Department of Financial Services’ Office of Fiscal Integrity in cooperation with the Miami-Dade Public Schools Inspector General and the Dade County State Attorney’s Office.

Ogugua, 45, is the president, owner and operator of Heritage Schools of Florida, Inc., based in Miami. He has been charged with one count of grand theft in the second degree, two counts of grand theft in the third degree and one count of scheme to defraud.

“It is unfortunate that this man’s actions would harm a scholarship program that has helped thousands of children in Florida,” said Gallagher, who oversees the Department of Financial Services.

“School owners and school administrators are trusted with the future development of our children. Mr. Ogugua has sold our most needy children short by grabbing a few quick dollars instead of helping children boost their future to a better level,” said Miami-Dade State Attorney Katherine Fernandez Rundle.

Charges are based on evidence that Ogugua obtained 29 Opportunity Scholarship checks and one McKay scholarship check from the Department of Education totaling $33,928.25 by misrepresenting these 30 students were attending Heritage Schools of Florida, Inc. Based on sworn statements from students and parents, Ogugua had full knowledge the students were not attending Heritage Schools during the enrollment periods in which scholarship checks were applicable. The theft occurred between August 2002 and October 2003.

Under Florida law, the Opportunity Scholarship Program allows parents whose children are attending a failing school for two of the last four years to apply for state funds to pursue private school as an educational alternative. The McKay Scholarship Program provides parents whose children have disabilities to apply for state-funded scholarships to attend an alternative public school or a private school.


Members of the Florida Cabinet and the governor passed a resolution honoring the more than 30 years of public service by Max Mayfield, director of National Oceanic and Atmospheric Administration's (NOAA) National Hurricane Center located in Miami. Director Mayfield, who has led the National Hurricane Center since January 2000, will retire at the end of this year. Director Mayfield's career of service and leadership has resulted in improved forecasts, enhanced warning coordination and increased preparedness. Mayfield came to the National Hurricane Center in 1972, following a 2-year stint as a forecaster with the U.S. Air Force.

Mayfield has served the National Hurricane Center in various professional capacities, rising from the position of Satellite Meteorologist through the ranks to the position of Deputy Director in 1998, then Director in 2000. Early in his career, Max recognized that the battle against hurricanes is won outside of hurricane season. He has successfully developed the annual 'hurricane hunter' preparedness tours, visiting vulnerable locations along the United States and Caribbean coasts to educate residents on the dangers of severe tropical events. For more information on hurricane preparedness, please visit


Business and government leaders across Florida joined persons with disabilities in recognizing Disability Mentoring Day. Part of National Disability Employment Awareness Month, the event brings together community business leaders as mentors to persons with disabilities interested in exploring employment opportunities. The mentor/mentee relationships help break down barriers to employment while educating employers on the contributions persons with disabilities make to the workplace. As mentors, the Lt. Governor and I know firsthand the enrichment that comes from sharing work experiences with an individual who is anxious to join Florida's growing workforce. Nationally, Florida has been recognized for initiatives encouraging employers to recruit, hire and train persons with disabilities.

Persons with disabilities have on average a 65 percent unemployment rate while two-thirds of those who are unemployed would prefer to work. For more information on hiring qualified workers with disabilities, visit

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