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FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY NEWSLETTER

Volume 4, Number 33, August 17, 2007

Fellow Floridian:

On October 1, our state's Motor Vehicle No-Fault law will expire  along with the requirement to purchase Personal Injury Protection (PIP) coverage, assuming no legislative action is taken. Payment for injuries sustained during an accident will be the financial responsibility of the at-fault driver.

Under the current No-Fault law, Florida drivers are required to carry PIP coverage, which pays the first $10,000 of the drivers’ and their passengers’ medical costs, regardless of fault.

We advise consumers to review their auto insurance coverage in the next six weeks and to purchase coverage to provide proper medical treatment in case of an accident.

In the event one is at fault in an accident after the expiration of No-Fault, sufficient auto insurance coverage can also help protect financial assets.

Find out more about this important issue on our Web site, MyFloridaCFO.com. FAQs, charts and in-depth discussion of the issues will help prepare Floridians for life without No-Fault and help protect families and their assets.

Sincerely,

--Alex Sink


HURRICANE DEAN GROWS INTO A MAJOR STORM

As this week progresses, Dean is sweeping through Jamaica and the Cayman Islands, on the way to Mexico and possibly Texas.

Florida has been spared the wrath of this storm but our guard should be up for future developments in the tropical storm arena.

Be ready for future storms by making preparations to protect your family and property. Make sure you have storm supplies on hand such as bottled water, batteries and other necessary items.

Most of all, follow any evacuation notices from your local authorities. This storm can easily make a turn towards Florida and we will be prepared.

When a hurricane is projected to hit our state, the Department of Financial Services activates a special consumer helpline for Floridians to seek assistance on insurance matters. The number is 1-800-22-STORM, or 1-800-227-8676. Hearing-impaired residents may use a TDD to call 1-800-640-0886.

Long-term, mitigation is the best way to reduce the potential threat of damage from a hurricane or tropical storm. For more information on what steps to take to harden your home, please visit My Safe Florida Home.


SOUTH FLORIDA TV INTERVIEW WITH CFO SINK

One-on-one with Chief Financial Officer Alex Sink
“Mass confusion” and more lawsuits—that’s what Chief Financial Officer Alex Sink believes will happen if Florida’s PIP No Fault insurance is allowed to sunset in October. On the program she’ll explain why and how her department will still investigate PIP fraud even if the law is not renewed or reformed in a special session.

Guest: Alex Sink, Florida Chief Financial Officer

Chief Financial Officer Alex Sink will be the guest on South Florida's WPBT Channel 2 show Issues on Friday, August 17, at 7:30 p.m.

This episode of ISSUES will air again on Sunday, August 19th at 12:30PM.

ISSUES is hosted by Jeff Yastine of the Nightly Business Report. 

On Monday, August 20, the interview will be online at this address: www.channel2.org/issues


QUESTIONS ABOUT LIFE WITHOUT NO-FAULT?
GET ANSWERS AT MYFLORIDACFO.COM


Florida Chief Financial Officer Alex Sink announced that Florida’s auto insurance consumers can log onto her Web site, MyFloridaCFO.com, and click on the “Life without No-Fault” link to learn about the new insurance laws in effect after the sunset of No-Fault.

In absence of legislative action, Florida’s Motor Vehicle No-Fault Law will expire on October 1, 2007, along with the requirement to purchase Personal Injury Protection (PIP) coverage. Beginning October 1, whether someone is at fault in an accident could make all the difference as to which driver will be liable to pay for damages.

“The best advice we can give to consumers is to purchase enough auto insurance coverage to provide proper medical treatment for themselves and their families,” said CFO Sink, who oversees the Department of Financial Services. “In the event someone is at fault in an accident after the expiration of No-Fault, sufficient auto insurance coverage can help protect that family’s financial assets.”

“Life without No-Fault” contains useful information for Florida consumers, such as answers to frequently asked questions and the definitions of popular insurance terms. Floridians can review a chart, courtesy of the Ft. Myers News-Press, detailing which driver in an accident is liable for payment of injuries or damages. Additionally, consumers will find CFO Sink’s previous outline of policy considerations in a post-No-Fault world.

One of the largest changes for consumers will be that payment for injuries sustained during an accident will now be the financial responsibility of the at-fault driver. Under the current No-Fault Law, Florida drivers and motor vehicle operators are required to carry PIP coverage, which would pay the first $10,000 of the drivers’ (and their passengers’) medical costs, regardless of fault.

CFO Sink also operates a consumer helpline that receives more than 450,000 calls annually from Florida’s insurance and financial consumers, many of whom have begun to ask about the upcoming changes in Florida’s auto insurance laws.


CFO SINK ANNOUNCES MIAMI-DADE FRAUD ARRESTS FOR PIP, PROPERTY DAMAGE FRAUD

Florida Chief Financial Officer Alex Sink announced arrests of individuals accused of various insurance fraud schemes including auto body damage, Personal Injury Protection (PIP), and hurricane claim fraud. Two of those arrested face up to 55 years in prison on multiple felony charges and are suspected to be the ringleaders in organizing more than 70 “paper” motor vehicle crashes since 2003.

The arrests stem from investigations by the Department of Financial Services, Division of Insurance Fraud (DIF), a sworn statewide law enforcement agency that last year made more than 800 arrests and currently leads the nation’s fraud bureaus in the number of cases presented to prosecutors and the amount of court-ordered restitution.

“The arrests we are announcing today represent another victory for consumers as we continue to root out fraud that increases rates that Floridians pay,” said CFO Sink, who oversees the Department. “I want to assure Floridians that even after the sunset of No-Fault, we will continue to vigorously pursue those who defraud the system and put our officers’ lives at risk.”

Among the arrests CFO Sink announced today were Jesus Joel Trujillo, 44, and his mother, Elda Castro, 63, both of Homestead, who were arrested at their homes this morning for creating auto crashes on paper and sending fraudulent claims to at least six different insurance companies.

The two were booked into the Miami-Dade County Jail on nine counts each of grand theft and one count each of organized fraud. Bond was set at $52,500 for each. If convicted on the charges, they face up to 60 years in prison. The Miami-Dade County State Attorney’s Office is prosecuting the charges.

Trujillo and Castro allegedly set up fictitious auto body shop corporations along with corresponding bank accounts to make it appear they were conducting legitimate business, then obtained several vehicles and damaged them to look like they had been involved in crashes. Then, other individuals were recruited, ownership of vehicles was transferred among participants and claims were filed with their insurance companies for crashes that never occurred.

To support fraudulent claims, Trujillo allegedly would locate particular models of vehicles in which the participants had claimed to have had accidents and then use the name and vehicle information of the unsuspecting vehicle owner as the claimant, and another participant in the scheme would pose as the driver of those targeted vehicles during contact with the insurance companies.

Detectives said insurance checks were deposited into one of two bank accounts that Trujillo and Castro had established. Corporation and bank records showed one account, Jesse T. Enterprises, Inc., was a residential address in Hialeah, while the second account, E&R Paint and Body, Inc., was Castro’s home address.

Through investigations by both the insurance companies’ Special Investigations Units, the National Insurance Crime Bureau (NICB) and the DIF it was determined that damaged vehicles were used over and over for the claims, including one vehicle used eight times. Insurance companies paid out $32,827.23 in fraudulent claims in this case.

Other arrests CFO Sink announced today:

  • Johnny Hill, 33, Miami, for knowingly purchasing a fake State Farm insurance card. Johnny Hill purchased the fake card for $50 and then gave the card to his mother to present to the insurance company. Hill is charged with one count of possessing a fake insurance card and faces up to five years in prison if convicted on the charge.
  • Milagros Pedraza, 46, Miami, and Susana S. Estevez, 55, Miami, are accused of participating in a staged auto crash that resulted in more than $11,000 in fraudulent PIP claims through a Hialeah clinic, Havana Treatment Center. The staged crash occurred on January 26, 2006. The three were booked into the Miami-Dade County Jail and face a minimum mandatory sentence of two years in prison if convicted.
  • Amalia Soto, 37, Miami, charged with insurance fraud and grand theft. She allegedly altered a receipt for replacement of an air conditioning unit following Hurricane Wilma and submitted to First Community Insurance Company a claim for $3,290 instead of $2,200. She was booked into the Miami-Dade County Jail. If convicted, she faces up to five years in prison.
  • Rogelio Alonso, 41, Miami, owner of Gables Medical Center, Corp, and clinic therapist, Marcia Alonso, 49, Miami, both charged with insurance fraud and grand theft for fraudulent bills in excess of $8,000 for alleged treatment of two participants in a staged accident. If convicted on the charges, they both face up to 10 years in prison.
  • Eran Oliva-Sotomayor, 40, Miami, therapist at T&A Diagnostic Center, and Larry Yanez, 20, Miami, the latest arrests as a result of an undercover sting operation called “Operation TGIF” that netted 33 people in June. That operation, initiated by a call to the DFS’ fraud hotline following an interview of DIF detectives on a local radio show, identified 10 staged accidents between December 2006 and April 2007, which resulted in more than $328,000 in fraudulent PIP claims

CFO Sink emphasized that while Florida’s No-Fault Law and the requirement to carry PIP coverage are set to expire on October 1, 2007, DIF detectives will continue to investigate PIP fraud for several years because these criminal charges carry a five-year statute of limitations. “Floridians should continue sending in tips and referrals so we can work together to hold individuals responsible for this costly crime,” said CFO Sink.

For more information on the expiration of Florida’s No-Fault Law, visit www.myfloridacfo.com and click on Life without No-Fault.

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 Hotline at 1-800-378-0445. A reward of up to $25,000 may be offered for information leading to an arrest and conviction.


RESOLUTION OF THE GOVERNOR AND CABINET TO SOLDIERS TO SCHOLARS

WHEREAS, the Soldiers to Scholars program was established in 1996 by Dr. Alzo Reddick as a mechanism to encourage U.S. military veterans to further their post-secondary education and pursue second careers as teachers and nurses in Florida; and

WHEREAS, by volunteering 5 hours a week to mentor at risk children in inner-city areas, Soldiers to Scholars participants that live in designated housing can receive up to 100% of the tuition, books and required supplies at either a community college in the Orlando area or at the University of Central Florida; and

WHEREAS, the Soldiers to Scholars participants live in inner-city housing, making them visible 24 hours a day, seven days a week to serve as mentors and role models to vulnerable children while instilling valuable principals of moral strength, self-discipline, responsibility and integrity; and

WHEREAS, military retirees, separating active duty personnel, and current drill members of the reserve are discovering new and rewarding careers in teaching and nursing, thus enriching the quality of Florida’s education by placing mature, motivated, experienced and dedicated personnel in our classrooms; and

WHEREAS, working in tandem with the Florida Department of Veterans’ Affairs, the Florida Housing Finance Corporation, and the University of Central Florida’s (UCF) University Relations Division, the College of Education, and the College of Health, the Soldiers to Scholars program pays 100% of tuition and provides a housing allowance for individuals living in approved housing while they are earning a bachelor’s degree in instructional education or nursing; and

WHEREAS
, the program has been successful in producing quality educators in high demand areas — more men and minorities with experience beneficial to successful teaching in mathematics, science, special education and health care related fields who desire to give back in economically disadvantaged urban and rural schools and communities.

NOW, THEREFORE, BE IT RESOLVED
that the Governor and Cabinet of the State of Florida do hereby recognize the

SOLDIERS TO SCHOLARS

program in Florida and encourage other universities and community colleges to implement similar programs across the state.

BE IT FURTHER RESOLVED that the Governor and Cabinet of the State of Florida do express their appreciation to all active and non-active personnel in our armed forces for their sacrifices.

IN TESTIMONY WHEREOF the Governor and Cabinet of the State of Florida have hereunto subscribed their names and have caused the Official Seal of the State of Florida to be hereunto affixed in the City of Tallahassee on this 14th day of August, 2007.


CFO SINK ANNOUNCES ARREST IN UNDERCOVER OPERATION

A former insurance agent who had his license revoked last year by the Department of Financial Services is now facing criminal charges after he allegedly offered to sell insurance to an undercover insurance fraud detective.

Mark Dwain Hannifin, 45, owner and operator of Hannifin & Associates in Wellington, was arrested earlier this month on charges of soliciting insurance without a license and transacting insurance without a license. If convicted he faces up to five years in prison on each count in addition to fines and restitution. Detective Stacey Spirn with the Department of Financial Services’ Division of Insurance Fraud (DIF) was lead investigator, and was assisted by DIF Captain Simon Blank.

“We urge Floridians to check our Web site or call the department’s Consumer Helpline to ensure an agent is licensed,” said Florida Chief Financial Officer Alex Sink, who oversees the department. “No one should transact business with an unlicensed agent, much less one whose license was revoked for prior bad conduct.”

On August 1, 2007, an undercover DIF detective posing as a customer met with Hannifin at Hannifin’s office. The meeting was captured on both audio and video recordings. Hannifin allegedly asked the detective for information necessary to complete an application for general liability insurance, and then advised the detective that he would contact him regarding when he could pick up the certificate.

The next day, someone from Hannifin’s office called the detective and requested a facsimile number where he could send the application. The documents sent consisted of a letter from Hannifin with a general liability insurance quote from Western World Insurance Company and instructed the detective to sign the application and provide a check for the premium down payment to Hannifin & Associates. The detective arranged to drop off the application and payment in person, but instead delivered handcuffs.

Hannifan’s agent license was revoked in 2006 after he collected premiums but failed to place coverage and sold unauthorized insurance products. To check an agent’s license status, go to www.myfloridacfo.com.

The Division of Insurance Fraud is a statewide law enforcement agency that investigates fraud in all lines of insurance, including health, life, auto, property and workers' compensation insurance. Anyone with information about this case or any other suspected fraud case is asked to 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 an arrest and conviction.


RESOLUTION OF THE GOVERNOR AND CABINET TO THE 2007 TROOPER OF THE YEAR

WHEREAS, the Troopers of the Florida Highway Patrol are exposed to personal risk on a daily basis while serving and protecting the citizens and visitors of Florida; and, 

WHEREAS
, since 1965, the Florida Petroleum Council has sponsored the Trooper of the Year Award which is presented annually to an outstanding trooper in recognition of acts of heroism or exceptional performance of duties; and 

WHEREAS, Trooper Edward Pope is a 4-year veteran of the Florida Highway Patrol assigned to Troop F, Charlotte County, and has distinguished himself during the call of duty by exhibiting exemplary valor in the face of adversity; and   

WHEREAS
, Trooper Edward Pope was recognized as Trooper of the Month in January, 2006, for his persistent investigations and coordination with Ohio law enforcement officials regarding stolen goods and insurance fraud and separately for his actions leading to an arrest regarding felony possession of marijuana; and

WHEREAS
, Trooper Edward Pope was recognized as Trooper of the Month in May, 2006, for his compassionate and expeditious efforts that resulted in an averted suicide attempt; and 

WHEREAS
, Trooper Edward Pope was recognized as Trooper of the Month in July, 2006, for exceptional valor in his efforts to rescue two occupants of a vehicle sinking in waters infested with menacing alligators.  

NOW, THEREFORE, BE IT RESOLVED
that the Governor and the Cabinet of the State of Florida do hereby recognize and commend

TROOPER EDWARD POPE
AS THE 2007 FHP TROOPER OF THE YEAR 


and thank him for his consistent dedication to exemplary service to the citizens and visitors of Florida. 

BE IT FURTHER RESOLVED
that the Governor and Cabinet of the State of Florida do hereby recognize that Trooper Edward Pope has earned the distinction of being the only trooper in the history of the Florida Highway Patrol to be awarded Trooper of the Month an unprecedented three times in a single year for three separate acts of bravery and excellent police work. 

BE IT FURTHER RESOLVED
that the Governor and Cabinet of the State of Florida do hereby recognize all Florida Highway Patrol Troopers and thank them for their bravery and devotion to duty in protecting the motoring public. 

IN TESTIMONY WHEREOF the Chief Financial Officer and Cabinet of the State of Florida have hereunto subscribed their names and have caused the Official Seal of the State of Florida to be hereunto affixed in the City of Tallahassee this 14th day of August, 2007.


CENTRAL FLORIDA MAN CHARGED WITH SELLING FRAUDULENT IDENTIFICATION CARDS

Florida Chief Financial Officer Alex Sink announced that a Central Florida man is facing several felony charges after fraud detectives with the Department of Financial Services caught him allegedly selling fraudulent social security and resident alien cards from his home. Subsequently, a search warrant was executed, and detectives uncovered equipment used to make the fraudulent cards.

Jose R. Rojas Sanabria, 27, was arrested last week in his Wimauma home after detectives with the department’s Division of Insurance Fraud (DIF) had two informants buy fraudulent cards from him.

“The cost of fraud inevitably is passed on to all consumers,” said CFO Sink, who oversees the department. “But this kind of fraudulent activity carries the additional impact of undermining the security of our communities and our nation, and we are committed to protecting our citizens.”

In June, DIF arrested 26 individuals throughout Florida who were using fraudulent identification to gain employment. At one point during the investigation, it was uncovered that 115 individuals were using one 10-year-old Florida girl’s social security number.

Sanabria is charged with two counts each of forgery, uttering a forged instrument, identity theft and counterfeiting. If convicted on the charges, he faces up to five years in prison on each count in addition to fines and restitution. Sanabria was booked into the Hillsborough County Jail with bond set at $16,000. Detective Kevin B. Morris was DIF’s lead investigator, and the charges are being prosecuted by the Hillsborough County State Attorney's Office.

During an unrelated workers’ compensation fraud investigation, Detective Morris learned that fraudulent social security cards and resident alien cards allegedly were being produced and sold in Sanabria’s home. Two informants went into Sanabria’s home and for $100 each purchased two fraudulent social security cards and two fraudulent resident alien cards. Investigators said following the transactions, a search warrant was executed and detectives found blank cards and forms and other items needed to produce the fake cards.

The Division of Insurance Fraud is a statewide law enforcement agency that investigates fraud in all lines of insurance, including health, life, auto, property and workers' compensation insurance. Anyone with information about this case or another suspected fraud case is asked to 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 an arrest and conviction.


FINANCIAL LITERACY COUNCIL CONVENED THIRD MEETING IN TAMPA

In an ongoing effort to increase financial literacy and help Floridians make better financial decisions, Florida Chief Financial Officer Alex Sink reported that the Financial Literacy Council held its third meeting in Tampa this week at the Bill Poe Family Junior Achievement Center.

During the first two meetings the council met both in person and by phone to outline their goals, strategies and mission statement. The council heard from Department of Financial Services Consumer Outreach coordinators about call trends from the more than 450,000 calls made to the consumer helpline each year.

The council, authorized in 2006 by House Bill 825, was created to study the financial problems that affect consumers, particularly young persons, seniors, working adults and small business owners, which arise from a lack of basic knowledge of financial issues. The council will also develop recommendations to aid CFO Sink’s department-- the Department of Financial Services-- in developing programs and resources aimed at increasing financial literacy among Floridians.

The following are the Financial Literacy Council members: Paul Auslander, CFP, President, American Financial Advisors; James R. De Santis, M.Ed., Executive Director, Florida Council on Economic Education; Liana Fox, Ph.D., Professor, Hillsborough Community College; Richard George, President, Junior Achievement of West Central Florida; Cassandra J. Grayson, M.Ed., Sr. Vice President, Administration, Florida Credit Union League; Doug Heinlen, Member of Florida Executive Council, American Association of Retired Persons; Deidre Newton, M.B.A, President and CEO, Community Real Estate Services, Inc.; Obdulio Piedra, Miami-Dade Market President, Great Florida Bank; Dulce M. Suarez-Resnick, Senior Account Manager, HBA Insurance Group.

For more information regarding the Financial Literacy Council please visit www.myfloridamoney.com


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