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Miami Auto Agents Charged in Sliding Scheme

3/1/2002

TALLAHASSEE - An owner of Miami-Dade auto insurance agency Salem Discount Insurance and several of his agents are facing charges of racketeering and conspiracy to commit racketeering for allegedly sliding undisclosed coverages and hidden costs to thousands of customers.

Investigators with the Department of Insurance, Division of Insurance Fraud, said Jason Salem, 38, president of Salem Discount Insurance, and agents Yaudat Ohan, 27, and Michael Hashem Durdunji, 36, have already surrendered. Expected to surrender today are Ramon Wallace Goodman, 64; Aquileo E. Hernandez, 41; and Henry Levern Myers, 50. Like Salem, the agents are each charged with racketeering and conspiracy to commit racketeering.

"This underhanded scheme is illegal and further burdens people who may be struggling to pay for insurance they are truly required to carry," said Florida Treasurer and Insurance Commissioner Tom Gallagher.

Sliding is an industry term for representing to a policy applicant that a specific additional coverage or product is required by law when it is not; that a specific additional coverage or product is included in the motor vehicle policy at no additional charge when a charge is required; or charging an applicant for an ancillary coverage or product without the applicant's informed consent.

Salem Discount Insurance had six offices throughout Miami-Dade: 1465 Collins Ave., Miami Beach; 740-1 71st St., Miami Beach; 8839 S.W. 40th St., Miami; 904 E. 25th St., Hialeah; 2574 N.E. Miami Gardens Dr., North Miami; and 2750 N.E. 183rd St., Aventura. Several of the offices have since closed.

Investigators said agency employees were instructed that they should charge as many hidden costs as they could get away with, ranging from $40 to $200, with commissions of up to 90 percent paid on those hidden ancillary charges.

One former employee told investigators that while she worked with the agency between September 1995 and November 1996, she witnessed as many as 5,000 customer files with hidden charges added. She said the practice was directed by Salem and included threats of salary cuts to employees who did not want to participate. Department investigators posing as customers at several of the agency locations said they were slid hidden charges of between $10 and $50.

Salem's bond is set at $250,000, and the agents each have bonds set at $100,000. They will be booked into the Miami-Dade County Jail.

The Department of Insurance, 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 is offered for information leading to a conviction.