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CFO Sink: Reporting PIP Fraud Pays More than Participating in It


Tara Klimek or Kevin Cate

TALLAHASSEE—With the economy down, staged accidents may be on the rise as some Floridians are tempted by fraud scams promising extra bucks. But Florida Chief Financial Officer Alex Sink, who oversees the Department of Financial Services (DFS) and Division of Insurance Fraud, warns that planning or participating in a staged accident can cost you more than you bargain for-- a minimum two-year prison sentence for starters.  

CFO Sink on Friday reminded Floridians that they can actually earn more money reporting these scams than participating in them. 

“If you are approached to participate in a staged accident, think before you act, and then call us,” said CFO Sink.  “Fraud drives up the cost of insurance for all of us, and Florida’s families don’t need any extra financial burdens.  If you provide information that leads to an arrest and conviction, you could make up to $25,000 – a lot more than you could ever make in one of these dangerous schemes.” 

The department offers a reward of up $25,000, based on how much was or could have been stolen in a reported scheme, if the information leads directly to an arrest and conviction. Since the inception of the reward program in 1999, $201,000 has been paid in rewards, more than half of that for reported Personal Injury Protection (PIP) fraud schemes involving $10.5 million in potential insurance losses. 

A typical scheme involves participants staging an accident to send “patients” to medical clinics in order to collect PIP insurance payments from insurance companies.  CFO Sink’s Division of Insurance Fraud, a statewide law enforcement agency, has made nearly 1,500 PIP fraud-related arrests since 2003 and won nearly 1,000 convictions.   

In late January, four Palm Beach County men were arrested on eight counts each of Insurance Fraud, eight counts of Third-Degree Grand Theft, and one count of Staging an Accident, a second-degree felony.  Nidal Jaber rented a U-Haul and is accused of enlisting three other men to participate in a 2006 staged accident.    Jaber was charged on December 12, 2008, at the Dade County Jail, where he was already in custody.  DFS Detective Vista Beasley arrested the other participants: Charles Camacho on January 22, 2009, William Resnick on January 26, 2009, and Alexander Garcia on January 27, 2009. More than $38,500 in insurance payments were issued on the fraudulent claims. If convicted on all charges, they each face a minimum of two years and as many as 15 years in prison.  The investigation continues into other accidents Jaber allegedly organized. 

Also late last month, DFS detectives arrested Gerardo Melenez for his involvement in a 2006 staged accident.  Melenez, a paralegal, worked with a clinic owner who recruited participants for a staged accident.  Melenez is accused of directing participants on how to discuss their injuries with the insurance company and clinic. More than $298,000 in false claims were filed for PIP, bodily injury and property damage.  DFS detectives previously arrested Melenez in June 2007 as part of Operation TGIF, and he is still pending trial on those charges, which included conspiracy to commit racketeering.  He now faces a minimum of two years and as many as 25 years in prison if convicted on all charges. 

Insurance fraud is estimated to cost the average Florida family as much as $1,400 a year.  To report insurance fraud, Florida residents should call 1-800-378-0445, out-of-state residents should call 1-850-413-3261, or log onto

DFS investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance, and according to the Coalition Against Insurance Fraud, leads the nation in the recovery of insurance fraud-related losses through court-ordered restitution.  In the fiscal year that ended June 30, 2008, cases presented for prosecution by DFS’ Division of Insurance Fraud resulted in $94 million in court-ordered restitution, more than five times greater than the operating budget allocated for the division.

As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.