NICB News: Summer 2016

In this edition of NICB News, we look at what can learned from crash tests in the fight against insurance fraud. We also go to San Antonio to report on efforts to avoid contractor fraud following record hail damage. And we provide the latest list of the nation’s Hot Spots for vehicle thefts and take a look at new products aimed at preventing thefts.

Focusing on Fraud in South Carolina

Organized fraud rings are active in South Carolina, taking advantage of the state’s lack of resources to investigate and prosecute insurance fraud.That was the message that some 150 law enforcement personnel, insurance industry representatives and elected officials heard at the annual insurance fraud summit in Greenville this week.

The summit, organized by the National Insurance Crime Bureau (NICB) and the South Carolina Insurance News Service (SCINS), focused on the need for additional resources and legislative remedies to fight the growing insurance crime problem in the state. To learn more, watch this video.

Citing NICB statistics that show South Carolina ranked seventh in the nation in suspected staged accidents, Attorney General Alan Wilson urged the passage of HB 4339 to help stem the problem.

“Fraud and crime, like water, follow the path of least resistance,” said Wilson. ”I believe it is incumbent on us this year as we move forward to try to direct some more resources and legislation toward combatting insurance fraud.”

South Carolina currently allocates $200,000 a year in funds for investigation and prosecution of insurance fraud, which is the lowest of all 50 states.

NICB President and CEO Joe Wehrle told the audience that in addition to staged accidents, other fraud issues that are plaguing the state include suspect medical clinics and pill mills, as well as windshield glass repair fraud.

“The proceeds that organized criminal rings haul in from insurance fraud often go to fund other criminal activities,” said Wehrle. “As we’ve seen in other states where we’ve held these summits in recent years, a few changes in the law and increased support for investigation and prosecution of these crimes sends a message to the criminals that this is no longer a place to do business.”

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800-TEL-NICB (800-835-6422), texting keyword “fraud” to TIP411 (847411) or submitting a form on our website. Or, download the NICB Fraud Tips app on your iPhone or Android device.

About the National Insurance Crime Bureau: Headquartered in Des Plaines, Ill., the NICB is the nation’s leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness. The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $395 billion in insurance premiums in 2014, or more than 78 percent of the nation’s property/casualty insurance. That includes more than 93 percent ($176 billion) of the nation’s personal auto insurance. To learn more visit www.nicb.org.

 

 

Body Shop Owner Defrauds Insurance Companies of Over $1.3 Million

In this edition of Fraud Files we take a look at John Henricks III who used to operate a towing and body shop. He was convicted of insurance fraud for staging accidents and creating false work invoices to the tune of $1.3 million.

Henricks’ sentence was changed last month from 120 months to 151 months in federal prison because, according to the judge, he has willfully failed to make any effort to pay restitution to the victims.

To view more episodes of Fraud Files click here.

Man Ordered to Repay Nearly $5 Million in Restitution

A Dallas-area man has been sentenced to nine years in federal prison and ordered to pay $4973,046 in restitution his role in running a staged traffic accident insurance scam since 2005.

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Leroy Nelson

From 2005 through 2012, Leroy Nelson defrauded auto insurance companies by submitting false and fraudulent claims for damage to various technical equipment in accidents that never happened. Nelson promised cash to individuals he recruited to report fictional accidents in which the driver had rear-ended a trailer or served to avoid something in the road and caused damage to items.

29 Arrested in “Operation Family Ties”

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Alleged suspect arrested by CDI detectives earlier this morning in connection to an organized family crime ring.

LOS ANGELES, Calif. – Detectives from the Department of Insurance Fraud Enforcement Division arrested 15 Los Angeles area residents early this morning for allegedly staging auto collisions and filing more than half a million dollars in fraudulent claims. Four suspects are still being sought, and an additional 10 suspects are arranging to surrender.

Edwin Bautista, 41, of Sylmar and Luis Bautista, 32, of Pacoima, believed to be the ring leaders of an organized family insurance fraud crime ring were arrested this morning with 13 others were arrested at various southland locations and taken into custody without incident. All were booked into Los Angeles County Jail. The Bautista brothers, along with 27 accomplices, allegedly led a family crime ring filing 18 fraudulent auto insurance claims over a two-year period totaling more than half a million dollars.

According to investigators, the suspects intentionally crashed cars and then coached accomplices on how to fake injuries and file fraudulent insurance claims to get cash payments from insurers for bodily injuries and property damage.

“Insurance fraud is a multi-billion dollar criminal enterprise in California and Los Angeles is ground zero in our battle to combat these crimes,” said Insurance Commissioner Dave Jones. “Every consumer pays for fraud through higher insurance premiums, as insurers pass along the cost of the losses to policyholders.”

Eleven insurance companies, including State Farm and Mercury, paid out more than $235,000 in claims before the fraud was uncovered. Once the scheme was discovered by department investigators, insurers avoided paying more than $250,000 in additional fraudulent claims submitted by the crime ring.

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Arrest photos and a complete list of insurers targeted are available on the CDI flickr page.

Fraud Files: Crashing U-Haul Trucks for Cash

In this edition of Fraud Files we take a look at five alleged suspects staging a series of accidents, in which rented U-Haul trucks were deliberately crashed into cars loaded with people who were in on the con. The participants in the cars were then directed to be treated for fictitious injuries at a medical clinic.

To view more editions of Fraud Files click here.

Super Good – The Epic Fraud Fighter

SuperGoodFraudImageIf fighting fraud were made into a comic book, it might look something like this. An injustice, such as vehicle theft, has occurred. The victim calls out for help. In the near distance, the good guys come to save the day. All is set right and ends well in the world – in theory.

In reality, despite their extraordinary dedication and commitment, even fraud fighters sometimes get the blues. In the ongoing saga of fighting fraud, the “good guys” of this epic tale are fraud fighters and those of us who stand up to villains. Villains are those who participate in and perpetrate fraud schemes. But unlike Superman, The Incredible Hulk, Wonder Woman or other famed heroes, our powers, more suitably deemed abilities, aren’t extraordinary at all or the result of some scientific mishap or cosmic occurrence. Rather, they are earned responsibilities undertaken as a result of what each of us embraces and upholds.

Some days we win, and some days we lose. By win, I mean that we stop criminals from being able to further victimize the public. And by lose, I mean when the criminals are able to continue to perpetrate more fraudulent schemes. Sometimes we make headlines for taking down criminal enterprises and other illegal operations. And sometimes, the good that we do goes completely unnoticed or acknowledged by the public. Dare I say fraud fighters are sometimes even viewed as the villains or vilified for their efforts? It’s all part of the landscape. But sometimes, even the most ardent fraud fighter has probably asked himself or herself if it’s ever enough. Will this battle ever end? Why do the schemes and crimes just continue to become more and more abysmal and shocking?

Fraud isn’t just about padding a claim to get additional funds from an insurer. It’s also about people who are senselessly injured or killed by criminals staging vehicle accidents. It’s about residents of a community or employees of a company who suffer the consequences from an act of arson. It’s about the person who loses their life when a criminal purposely causes them harm to collect on a life insurance policy. The list of heinous schemes goes on and on. And the more battles that a fraud fighter encounters, the more disheartening and appalling the scenarios and schemes will inevitably become.
It would be trite to end this story with a cliché comic book expression such as “And as the public sleeps for the night, they can rest easy knowing that their heroes keep a watchful eye.” That can never be the case as long as opportunists and greed abound. They are at the root of fraud. But all is not lost. Just as new villains emerge each day, so too shall new fraud fighters. It’s the person who reports fraud or suspicious activity. It’s the person who questions their provider about a procedure that seems medically unnecessary. Whatever the case, joining the fight against fraud will not entail having to wear a cape,
leaping tall buildings, or travelling faster than a speeding bullet. One need only subscribe to the belief that fraud must be defeated whenever and wherever it exists.

Florida’s No-Fault Reform: Trending in the Right Direction

After Leading the Nation with Suspicious PIP Claims, Florida Sees a Decline

Florida PIP ReformThe National Insurance Crime Bureau (NICB) has released a new report revealing a decline in Florida’s personal injury protection (PIP) questionable claims (QCs). In 2013, Florida PIP QCs declined by 7.6 percent from 2012. Meanwhile, for the period 2010 through 2013, Florida staged accident QCs decreased by 61.82 percent.

Tighter legislation, enhanced public awareness and a coordinated law enforcement response appear to be having the intended effect on PIP fraud in Florida.

We are encouraged by the decline in questionable claims that we’ve seen recently, but by no means are we declaring victory in Florida,” said NICB President and CEO Joe Wehrle. “Florida remains a hotbed for fraudulent activity, and we can’t afford to ease up for a moment in our fight against those who would abuse the system and burden Florida consumers.”

Visit the NICB Newsroom to read the full press release.

NICB Urges Minnesota Lawmakers to Turn Up the Heat on Insurance Fraud

Proposed legislation is essential tool for fighting no-fault crime

MinnesotaEffortsDES PLAINES, Ill., Feb. 13, 2014 — At a news conference at the Minnesota Capitol Thursday, the National Insurance Crime Bureau (NICB) expressed its strong support for the efforts of the Senate Commerce Committee’s Working Group on Insurance Fraud. The group has spent the last nine months taking testimony about insurance fraud’s impact on the state and is introducing a legislative package to combat the problem.

The reform efforts are an outgrowth of the 2012 Insurance Fraud Summit sponsored by the NICB and the Insurance Federation of Minnesota, which highlighted the increases in no-fault auto insurance fraud and other insurance fraud schemes in the state over the past few years.

Read the full press here.

For video highlights of the news conference, click here.