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Utah Department of Insurance Fraud Division. Insurance Fraud Overview. Armand Glick Director. State Insurance Fraud Division. In 1995 the Insurance Commissioner given authority to prosecute Insurance Fraud. The Insurance Fraud Division was organized later that year.
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Utah Department of InsuranceFraud Division Insurance Fraud Overview Armand Glick Director
State Insurance Fraud Division • In 1995 the Insurance Commissioner given authority to prosecute Insurance Fraud. • The Insurance Fraud Division was organized later that year. • In 2008 Mandatory Reporting of Suspected Insurance Fraud placed into law. • The IFD is funded through a fraud Assessment to Insurance Companies based on premiums sold in Utah.
Insurance Fraud Division Staffing • 9 – Law Enforcement Special Function Investigators • 2 – Assistant Attorney Generals • 1 – Para legal • 1 – Information Specialist • 1 – Part time Restitution Clerk
Fraud Referral Process • Submit through ISO or NICB • Submit though NAIC’s Online Fraud Reporting • Submit via e-mail to Director • Submit via Mail • Submit in Person • Submit by Phone
Why Worry about Insurance Fraud Cost of Insurance Fraud in the U.S. • $96.2 billion overall • $20 billion in Property & Casualty (home and auto) • $70 billion to $234 billion in Health Care (National Health Care Anti-Fraud Association estimates, Oct 2010) What does this mean to you? • To You: Average of $1,025/year per person in higher premiums • To Employers: $4,500/year per employee
How much is 96 Billion? • If you were given $130,000 to spend in a day. • It would take this same amount every day starting from year 0 A.D to year 2011 to reach 96 Billion Dollars!
Cases Prosecuted in FY – 2011 • 82 Total Cases Prosecuted • 27 False Vehicle Thefts • 16 Accident Past Posting • 15 Misrepresentation/False Claims • 6 Doctor Shopping/Prescription Fraud • 4 False Damages • 2 Agent Fraud • 1 Arson
Trends ? • Highest Increases in FY 2012 • Agent Fraud • Past Posting • Medical Billing Issues • Billing for services without necessary equipment to have performed claimed procedure. • Up coding • Lack of medical necessity • Falsifying medical records to support forged prescriptions.
Current - Life Insurance Case • Purchasing life insurance policies on handicapped persons under home health care. • No insurable interest. • Without knowledge of insured person.
Escrow Agent Case • State vs. Blake • $800,000 loss Blake kept closing money and did not pay off buyers old accounts. Placed money in personal account. Fabricated documents to provide buyer evidence loans had been paid.
Claims Adjuster Fraud • State vs. Phillips • Accident claims adjuster. • Created false additional damage estimates for auto vs. animal accidents. • Had payment checks made to her husband. • Had payment checks sent to her home address. • $23,963 loss.
False Insurance Sales • State vs. Brady • $479,123 Total Loss • 82 Victims Brady sold home warranties to new home buyers during the closing process. Issued false certificates of insurance from a company that did not exist but was similar in name to a real company. No coverage was provided.
Current - Example Agent Cases • Using others SSN to obtain better credit score for new insurance applicant. • Forging experience documents to reduce insurance premiums for new insurance applicant. • Falsifying applicant residence address and location of signing to sell annuities allowed in bordering states but not lawful in Utah. • Impersonating policy holder to reinstate lapsed insurance using bank info on file to pay past due premiums.
Inflated Loss • State vs. Bencomo • $5,559 Subject reported a theft of welding cable from one of his work trucks. He then altered the invoice from 600 feet of cable to show 1800 feet of stolen cable. Increasing the loss value by 3x the actual loss.
Application Misrepresentation • State vs. Prestwich • $48,000 Prestwich claimed her boyfriend was her husband on her health insurance application. This allowed her boyfriend to receive a significant amount of health related benefits to which he was not entitled.
Material Misrepresentation • Claimed accident occurred on flat road!
Doctor Shopping Case • State vs. Simon • $124,385 During a 15 month time span Simon had 116 Emergency Room Visits and 95 Doctor Visits for Migraine Headaches. Simon failed to disclose her other treatments and visits to each doctor and admitted seeking treatment due to addiction.
Foreign Object in Food • State vs. Stromness • $17,000 loss to four Insurers Stromness staged a slip and fall at a Bagel store. Later staged three broken tooth incidents involving metal found in food. This occurred three consecutive months in a row. SIU on fourth claim discovered prior claims.
Owner Give up Ring • State vs. Jepson • 16 co-defendants • $400,000 Jepson and others staged at least 12 vehicle thefts so that car owners could report their cars stolen and obtain insurance money. Jepson and others also stole several vehicles and broke into dozens of Mitsubishi Lancers and Dodge Neon SRT-4’s to steal parts which they sold online.
Staged Vehicle Theft - Owner Give Up • State vs. Nguyen • $15,000 Nguyen staged theft of his 2003 Mitsubishi Lancer from a movie theater. Nguyen was unaware his Lancer was equipped with Lo-Jack anti-theft equipment. Two hours after the theft was reported, an off duty Trooper’s Lo-Jack receiver activated and signal was tracked to a garage. Nguyen’s vehicle was not equipped with items said to be on the car when reported stolen and the Trooper located the keys with the vehicle.
Staged Auto Theft • State vs. Sanders • $73,766 Sanders dropped his 2005 Western Star Semi off for repair. He returned later that night and removed the semi from the repair lot and took it to a storage unit in Tooele. The repair facility reported semi stolen next morning. Sanders’s Semi was discovered a year later in storage unit when Sanders moved and failed to pay rent.
False Damage Claim • State vs. Ferguson • $385,995 Ferguson claimed he had laser machines in basement that were water damaged when a sprinkler line was cut outside. Ferguson never had laser machines in the basement. The lasers Ferguson claimed were damaged were not owned by him.
Agent Fraud • State vs. McFarland • $6,000 Loss Agent McFarland inflated value of vehicle for a friend involved in an accident. Payout larger than vehicle loan value. Had two checks issued. Owner gave McFarland some of the proceeds from the fraud.
Accident Past Posting • State vs. McGaha • $7,292 Loss McGaha had a single vehicle accident while un-insured. Trooper noticed McGaha and damaged vehicle on side of road while going to work. McGaha obtained insurance and later called to report accident. Same Trooper was dispatched to take accident report.
False Accident Circumstances • State vs. Dufer • $13,274 Dufer was hand starting his airplane. Wheel chocks failed and it spun around and ran into his truck. Dufer claimed his truck had come out of park and ran into the plane. Plane was not insured, vehicle was.
Physician Fraud – Current Case • Physician obtained IUDs manufactured for distribution in Turkey via a Canadian pharmacy. • Physician provided the less expensive Turkish IUDs to patients without their knowledge. • Misrepresented the Turkish IUD’s as being American produced IUDs to insurance to increase his profit margin.
Dentist Fraud – Current Case • Billed Insurance for services not provided. • Billed for tooth build up on nearly every patient. • No tooth build up was ever performed. • Same tooth, multiple times, shore time period.
Sham Assessment Clinics • Rent location with false information • Steal real patient data – (usually from a lab) • Send out false bills • Collect and Run before real patients question billings
Contact Information Insurance Fraud Division 230 S. 500 E. Suite #170 Salt Lake City, Utah 84102 Phone: 801-531-5380 Email: aglick@utah.gov Web: www.ifd.utah.gov
