Florida Chiropractor Jailed for PIP Insurance Fraud

Cape Coral chiropractor Dr. Stephen M. Lovell, former operator of Xtreme Care Rehabilitation Center Inc., was recently sentenced to five years in prison for conspiracy to commit health care fraud.

Lovell was also ordered to pay a money judgment of $1.7 million, equal to the proceeds of the offense.

In March, 2012, Lovell and 12 co-conspirators were indicted by a federal jury following Operation Whiplash, a multi-agency criminal investigation into a massive medical insurance scheme involving Xtreme Care Rehabilitation Center, of which Lovell is listed as the president and sole officer; and C & A Family Rehab Center, of which William A. Hall is listed as the president and sole officer.

As Operation Whiplash revealed, the true owners of Xtreme Care and C&A Family Rehabilitation were not Lovell and Hall, but were actually Francisco Huici Fernandez, Ernesto Diaz, and Abel de Jesus Perez. By falsely representing Hall and Lovell as owners, Fernandez, Diaz, and Perez were able to circumvent regulatory scrutiny by the State of Florida and fraudulently collect funds from their clinics.

In addition to falsely misrepresenting the ownership of their medical clinics, the conspirators also supervised an elaborate scheme involving staged accidents and false medical claims, so as to maximize PIP insurance payments to their clinics.

Upon payment from the insurance company, proceeds from the fraudulent activity would be transferred to corporations created by the conspirators. The funds were then disbursed to Fernandez, Diaz, and Perez through payments or expenditures from the corporate bank accounts.

In February, 2013, all members of the conspiracy entered in pleas of guilty. Lovell is the last member of the ring to receive sentencing.

Health care fraud involving shell companies is a recurring phenomenon in the state of Florida. We addressed a similar case of concealed ownership in our recent blog post titled “Eleventh Circuit Upholds Silver Star PIP Fraud Judgment.”

It is estimated that insurance fraud costs the United States $80 billion dollars or more a year, which is ultimately passed down to consumers.

“This is a huge victory for the insurance industry. It’s millions of dollars in possible savings,” said Ralph Garcia of the National Insurance Crime Bureau.