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CFO Gallagher Releases Annual Top 10 Fraud List


Nina Banister
(850) 413-2842 

2004-2005 Top 10 cases add up to more than $2.7 million in losses
TALLAHASSEE – Florida's Chief Financial Officer Tom Gallagher today released the Department of Financial Services' annual Top 10 Fraud List, which summarizes 10 of the costliest or boldest securities, financial and insurance fraud scams that resulted in arrests or convictions by the Division of Insurance Fraud during the fiscal year that began July 1, 2004, and ends June 30, 2005. 
 "Fraud schemes are becoming more complex and more costly, and the cost is passed on to every consumer in higher insurance premiums and higher costs for goods and services," said Gallagher, who oversees the department. "But working together, we can fight back against these criminals and hit back hard.  The most important thing consumers can do is verify before they buy."
This year's Top 10 fraud schemes ranged from title insurance trickery to the perennial list maker, Personal Injury Protection auto insurance fraud, or PIP fraud.  On the list is one PIP fraud case in which eight individuals posed as journalists to gain access to police accident reports in order to solicit crash victims to go to unscrupulous medical clinics.  In another, more than two dozen individuals were arrested in a complex scheme that involved staging crashes in order to create "patients" for fraudulent medical clinics.  The ringleader is suspected of staging more than 90 auto crashes.  The 10 cases, listed in no particular order, add up to more than $2.7 million in financial losses.  Additional potential losses in these 10 cases – losses that may have occurred if an arrest had not been made when it was – add up to more than $1 million.
 The department has a number of online resources, including a Verify Before You Buy page that includes links that allow consumers to check the licensure status of an insurance or financial services company, broker or agent; a Senior Resource Center that specifically addresses concerns and needs of Florida's senior citizens facing important financial decisions; and a Service Point link where consumers can ask a question or file a complaint and track the status of their request.  These resources and more can be found at or by calling 1-800-342-2762. 
 Gallagher also said that the department is willing to pay up to $25,000 for information that directly leads to an arrest or conviction in a fraud scheme.   "That's very likely a whole lot more than one might make participating in one of these schemes, and we want to award law-abiding citizens who get involved and help make a difference."
 So far this fiscal year, the department's Division of Insurance Fraud has made more than 700 arrests.
 The release of the annual Top 10 Fraud List coincides with the 14th annual Florida Insurance Fraud Education Council Conference, which continues through tomorrow in Orlando.  Hundreds of insurance fraud investigators and prosecutors are expected to attend the three-day conference to learn about the latest insurance fraud schemes and investigative techniques. 
On Thursday in Ft. Myers, Gallagher will ask Gov. Jeb Bush and other Cabinet members to sign a resolution declaring June as Fraud Awareness Month.  The signing will take place during the Cabinet meeting at "Capital for a Day."
The department's 2004-2005 Top 10 Fraud List is below.
Please note: $2.7 million is the estimated amount of losses in these 10 cases only.
Not Flying Straight
SARASOTA—An attorney who continued to work while collecting more than $130,000 in disability benefits likely won't get a chance to cash in his frequent flyer miles anytime soon.  Peter W. Martin, 58, faces up to 15 years in prison after insurance fraud detectives uncovered that he submitted false information on a disability claim.  Martin reported that, following a motor vehicle accident, he became partially disabled and that his condition deteriorated making him totally disabled in September 2003.  Detectives, however, found that Martin had continued to practice law in Florida as well as in New York while he collected disability benefits.
This is Not Monopoly
CLERMONT—A title agent accused of stealing more than $1.1 million in customer escrow funds took the money – along with her boyfriend and coworkers – on a Las Vegas junket, but didn't bet on getting caught.  Kathryn Knight, 37, also known as Kathryn Weed, was operating Weed & Associates Title Services when American Pioneer Title Insurance Company conducted an audit and discovered discrepancies in Weed & Associates' escrow account.  Fraud detectives determined that Knight misappropriated in excess of $1.1 million from the escrow account and used these funds to buy vehicles, the Las Vegas getaway and make a down payment on a $9 million Lake County land purchase.  Her title agent license was immediately revoked and she faces up to 60 years in prison if convicted on the charges.
The Reporter's Instinct
PLANTATION—Eight individuals who illegally obtained traffic accident reports from police departments throughout Palm Beach, Broward and Dade counties posed as reporters to gain access to the reports.  They used the information in the reports to solicit accident victims to go to medical clinics and auto body shops for the purpose of collecting money on fraudulent auto insurance claims.  They pretended to work for media publications such as Impact News Weekly, South Florida Journal and Greek American Herald. 
Home Repairs the Cheating Way (or Huff and Puff)
COCOA BEACH—A Brevard County homeowner claimed that renovation work to his home was the result of hurricane damage, but the work had begun almost a month before the hurricane hit.  Robert Milliken, 60, filed the fraudulent claim last September with Citizens Property Insurance Corporation for his home at 423 S. Atlantic Ave., claiming that Hurricane Frances caused nearly $60,000 in personal property damage.  Detectives, however, determined that Milliken contracted with Mack Mosier of Trade Wind Builders to remodel his residence, and the work, which involved the removal of all of Milliken's furniture as well as the roof and windows, began on Aug. 10, 2004.  Hurricane Frances struck the Treasure Coast on September 5, 2004
Fake Cards, Real Money
RIVIERA BEACH—A man who sold fake motor vehicle insurance cards to nearly 200 South Florida drivers was sentenced to three years in prison.  Howard M. McKinon, 58, of 481 W. 30th St., pleaded guilty to nine counts of marketing a false or fraudulent motor vehicle insurance card and one count of organized scheme to defraud. State fraud investigators determined that McKinon issued at least 196 cards, most of them to drivers in West Palm Beach and Riviera Beach.  The cards appeared to be issued by Progressive Insurance Company and purported to carry the minimum statutory levels of Personal Injury Protection and Property Damage coverage.  The cards had the same policy number, with different personal and vehicle information typed on them. 
The World is Your Stage
MIAMI—Fraud detectives in February arrested 25 individuals believed to have been involved in a ring that staged at least a dozen auto crashes and fraudulently billed insurance companies for $1 million.  If convicted, they will face a minimum mandatory sentence of two years in prison for organizing the staged crashes, and up to 15 years in prison on all charges.  The 53-year-old suspected ringleader Wilfred Cyriaque, also known as "Lopez" or "Blanc," is charged with 51 counts each of insurance fraud and grand theft, four counts of staging an accident, and organized scheme to defraud.  Investigators believe Cyriaque may have staged as many as 90 crashes during the last several years. 
Now You Can Panic
POMPANO BEACH—A man who allegedly lied on his application for disability income insurance and then filed a claim one week after getting the policy is facing felony charges that could land him up to 65 years in prison.  Bruce Sutherland, 43, had a real estate license but claimed he was unable to work due to panic attacks.  Department detectives said medical and hospital records confirmed that Sutherland provided false information regarding his medical history, and documents from the Social Security Administration indicated he provided false salary information as well.  Based on his application, Sutherland was issued a Disability Income policy that provided a monthly disability benefit of $3,000 until he turned 65.  Sutherland's maximum benefit for disability would have been approximately $828,000.  The claim was denied.
Who Are You?
ST. PETERSBURG—A couple and a relative are facing felony insurance fraud charges after state fraud detectives determined they fraudulently collected $39,000 from their insurance coverage stemming from a staged automobile accident.  Detectives determined that Azem Jakupaj, 41, his wife, Fikreta, 36, and Edin Muratovic, 26, gave false information to their insurance company following a January 2004 staged crash at 8th Street and 94th Avenue North.  The Jakupajes said they did not know Muratovic, who was in the other car, but a witness said they were seen talking prior to the accident, and the investigation revealed that they are related.  The Jakupajes' two young daughters were in the car at the time of the staged accident.   
Angling for Annuities
JACKSONVILLE—An insurance agent who stole $366,000 by convincing at least six elderly clients to cash in their annuities and reinvest in other insurance products was sentenced to three years in prison and order to pay restitution.  Thomas Larry Griggs, 48, operated Griggs Financial Services in Jacksonville and was a licensed insurance agent.  He persuaded several elderly victims to surrender their annuities and reinvest into other insurance products sold by Griggs, but insurance fraud detectives determined that once Griggs received the surrender proceeds from the annuities, he converted the monies to his own personal use.   Two of the victims, who ranged in age from 68 to 79, have since died.
Land Ho
PLANTATION—Three South Floridians bamboozled a title insurance company out of $1.2 million by playing with the paperwork.  Anthony Phillips, Suzanne Destefano and Chena Henry are accused of conspiring to steal $1.2 million from Attorney's Title Insurance Fund through a fictitious purchase of property.  The lending agent was advised to wire the money to an unlicensed broker (Chena Henry) for the property.  Henry then followed the instructions of Anthony Phillips and wired the money to Phillips and Suzanne Destefano in prescribed amounts.  Phillips used the stolen money to purchase property in which he had an interest in Miami-Dade County.