Florida’s Fight Against Insurance Fraud Rings Featured on ABC’s Nightline

October 29, 2013

Specialists in Florida’s Department of Financial Services, who have been trained to trace Personal Injury Protection (PIP) insurance fraud, will often spend months following paper trails, pursuing suspects, and managing surveillance. While not the most high-profile job in law enforcement, the goal is to arrest alleged medical clinic owners, physicians, therapists and phony accident victims who are part of intricate fraud schemes organized to fraudulently collect millions in insurance payments.

According to an October 23 story on ABC’s Nightline, it is estimated that personal injury fraud may cost Florida $1 billion a year, a loss that is passed along to consumers in the form of rising insurance premiums. Click on the link to watch the video.

Agents say that a typical set up includes car accidents involving “victims,” who are not actually injured. These victims go to personal injury clinics allegedly established by fraudulent clinic owners, where they are paid. Employees at the clinic then make an insurance claim for services that were never performed, filing up to $10,000 per “victim,” the Nightline story reported.

The fraudsters “want to make sure that they create visible damage so the police will write up a report,” said Lt. Rafael Delgado, an agent with the state’s Department of Financial Services, who talked to reporter Matt Guttman.

As a result, one car with four passengers could generate $40,000 in claims, and two cars involved in a fake collision could double the amount.

“It’s volume, keep pumping them in, volume, volume, volume,” Delgado said in the piece. “The more billings you do to the insurance companies, a bunch of it is going to get through, some of it’s not going to get through. It’s all volume. It’s all about making as much money as possible.”

One of the rings Delgado pursued was in Miami, the capital of this type of crime wave. Along with other agents and the Miami police, the group recently busted a fraud operation encompassing four clinics, two owners, and various employees who allegedly organized the staged accidents and the people involved as paid passengers.

Delgado said the suspects staged six car accidents, ultimately costing insurance companies more than $400,000.

The 20 individuals taken into custody were arraigned on insurance fraud charges, and according to their defense attorneys and court documents, all have entered pleas of ‘not guilty.’ Insurance fraud, up to $20,000, carries a maximum sentence of five years in prison if found guilty.

Because the money is so easy and the stakes are so low, insurance scams will continue to be carried, agents say, regardless of the outcome from arrests.