Worker s Compensation Premium Evasion

Transcription

1 focusfraud An Insurance Fraud Bureau of Massachusetts Publication Volume 23, Number 1 June 2016 Worker s Compensation Premium Evasion Watertown Business Owner Pleads Guilty to Tax Evasion and Mail Fraud Watertown - Richard Moxley pleaded guilty on April 27, 2016 in U.S. District Court to one count of tax evasion and one count of mail fraud in connection with a scheme to evade taxes and workers compensation insurance premiums by paying employees under-the-table for their work. Moxley owned and operated Sparkling Windows, a window and gutter cleaning company based in Watertown. From 2008 to 2012, Moxley devised and executed a scheme to defraud the Internal Revenue Service and their insurer, AIM Mutual Insurance, which provided workers compensation insurance for Sparkling s employees, by filing false tax returns and paying workers under the table. To do this, Moxley arranged to bring client checks to a check casher, and paid undocumented workers weekly wages in cash. By doing so, he concealed a substantial portion of the company s business revenues and payroll, and filed false tax returns, evading a significant portion of federal taxes, and fraudulently reducing the premiums for workers compensation insurance owed in connection with the business. Moxley will be sentenced on August 17, The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte of the Office of United States Attorney Carmen M. Ortiz. The case was investigated by the Internal Revenue Service, Homeland Security Investigations and the IFB. Wilmington Man Indicted in Connection with Workers Compensation Fraud Wilmington - Robert Foss was indicted on March 3, 2016 in Suffolk Superior Court on four counts of workers compensation fraud in connection with allegedly failing to accurately report the nature of his company s work. Between 2009 and 2012, Foss allegedly defrauded two insurance companies, Liberty Mutual Insurance and AIG, under three separate insurance policies by describing his business as a general contractor, when in reality, it was a roofing company. Foss also allegedly inaccurately described the nature of his business on an application for insurance through the Workers Compensation Rating and Inspection Bureau (WCRIB) in WCRIB establishes different categories of insurance policy costs depending on the risk of injury associated with different types of jobs, and insurers apply those categories to a company s payroll to calculate workers compensation insurance premiums. Roofing is classified Inside this Issue of focusfraud Agent Fraud...page 2 Provider Fraud......page 2 Health Care Fraud.page 3 IFB Marks 25th Anniversary.....page 4 Workers Comp Claimant Fraud....page 6 Automobile Insurance Fraud...page 6 CIFI Highlights page 7 as a more dangerous occupation than general carpentry and a higher premium is placed on insurance. As a result of these alleged schemes, Foss evaded paying approximately $120,000 in workers compensation insurance premiums. The case is being prosecuted by Assistant Attorney General Geoffrey Wood of Attorney General Maura Healey s Insurance and Unemployment Fraud Unit.

2 Insurance Fraud Bureau of Massachusetts 101 Arch Street Boston, MA Telephone (617) Fax (617) IFB Fraud Hotline FRAUD IFB Website Daniel J. Johnston Executive Director Anthony M. DiPaolo Vice President and Chief of Investigations Laura A. Kessler Vice President and General Counsel Thomas Simon Vice President of Administration Deborah Terry Editor Administrative Manager Individuals who have been charged and whose names have been publicly disseminated have been identified. focusfraud and e-focusfraud are published periodically throughout the year. News flashes on current press releases and news articles and updates on prosecution court activity are posted frequently on the IFB website If you prefer to receive your issues of focusfraud and IFB announcements by , please forward your name, company name and address to Referrals and general questions can be ed to Agent Fraud Case Update - Former Insurance Salesman Pleads Guilty to Tax Evasion Boston - On March 28, 2016 Paul Disidoro was sentenced in U.S. District Court to 18 months in prison, three years of supervised release, and ordered to pay $613,806 in restitution. Disidoro, a former insurance salesman, pleaded guilty in December 2015 to tax evasion in connection with the theft of more than $470,000 that he stole from three clients. Disidoro operated an insurance business in Massachusetts and from 2007 through 2010 he also acted as a financial adviser for some clients. During that period, Disidoro stole more than $470,000 from three clients, used the money for his personal benefit, concealed this income from his tax preparer, and failed to report the embezzled funds on his federal income tax returns, thus evading $144,000 in taxes. The case was prosecuted by Assistant U.S. Attorney Sandra S. Bower of United States Attorney Carmen M. Ortiz s Economic Crimes Unit. The case was investigated by the Internal Revenue Service and the IFB. Case Update - Insurance Agent Pocketed Clients Payments Somerville On March 16, 2016 a former Somerville insurance agent admitted to sufficient facts on charges of larceny and agent fraud. The case was continued without a finding for one year. He was ordered to pay $9,283 in restitution. The former agent cashed client checks for insurance premiums, however failed to remit payments to the corresponding carriers. Two of his customers discovered after submitting claims to their insurers that their garage-keeper liability policies were not in force although each had paid premiums and were provided insurance policies. The former agent admitted that he received payment from the two clients but failed to forward the payments to the appropriate insurance carriers. Assistant District Attorney Ryan Rall of the Office of Middlesex County District Attorney Marian T. Ryan prosecuted the case. Provider Fraud Case Update - Malden Chiropractic Practice Sentenced for Federal Tax Fraud Malden On January 29, 2016, Paul Jondle, former owner of chiropractic practice Future Health, was sentenced to one year and one day in prison, two years of supervised release, and ordered to pay $202,270 in restitution. Jondle pleaded guilty in October 2015 to filing fraudulent personal federal tax returns and attempting to obstruct the Internal Revenue Service. Barred from working as a chiropractor, Jondle used the names and tax identification numbers of licensed chiropractors working at Future Health for billing purposes, causing the insurance company payors to report the payments to the IRS as income to Jondle s subcontractors. In fact, the payments, mailed to Jondle and deposited into bank accounts that he controlled, were income (Continued on page 3) 2 focusfraud June 2016

3 Provider Fraud continued (Continued from page 2) to Jondle. From 2003 through 2007, Jondle deposited approximately $3 million into his bank accounts, yet reported no taxable income for those years, and paid no federal income taxes. During those years, Jondle spent the money on personal expenses including mortgage payments on his home, landscaping, tuition payments and pet spas. The case was prosecuted by Assistant U.S. Attorneys Lori J. Holik and Rachel Y. Hemani of the U.S Attorney s Economic Crimes Unit and Trial Attorney Jason M. Scheff of the Department of Justices Tax Division. The case was investigated by the Internal Revenue Service, the U.S. Postal Inspection Service, the U.S. Social Security Administration, Office of the Inspector General, and the IFB. Health Care Fraud Case Update Easthampton Mother-Daughter Plead Guilty on Numerous Drug Charges Easthampton - Theresa Coe and her daughter Toni Lobdell pleaded guilty on January 14, 2016 to a total of 255 charges for a scheme to fill false narcotic prescriptions. Coe was sentenced to two years of house arrest with GPS monitoring followed by three years of probation. Lobdell was sentenced to 2 ½ years in the House of Correction, suspended for seven years with probation, and will also be monitored by a GPS device. They were both ordered to pay restitution and to remain drug- and alcoholfree while on probation. Coe was an administrator at a medical practice when she obtained a prescription pad and then wrote prescriptions for herself and daughter. Assistant District Attorney Jeremy Bucci of the Northwestern District Attorney s office prosecuted the case. Worthington, MA Woman Admits to Health Care Fraud Pittsfield - On April 6, 2016 Stephanie Salvini admitted to sufficient facts in Pittsfield District Court on five counts of false healthcare claims, 19 counts of uttering a false prescription and 19 counts of fraudulently obtaining a drug. The case was continued without a finding for one year. On December 4, 2015, Northampton police responded to a medical office for a report of an employee who had allegedly forged and uttered multiple prescriptions. The medical office had received a phone call from a pharmacy to verify the validity of a written prescription for OxyCodone for Salvini. The prescription was purportedly issued by a nurse practitioner who worked at the medical office. Investigation revealed that Salvini was a medical assistant with the same practice and had also been a patient of the nurse practitioner. Salvini's last issued written prescription was on May 8, 2015 for 21 tablets of OxyCodone. The office manager stated prescriptions are processed electronically, however, back-up paper prescription pads were located in a locked closet to which Salvini had access. Copies of prescriptions filled and issued to Salvini were provided for dates between May 3, 2015 and December 3, Each prescription contained the same Massachusetts identification number which identified Salvini as the person who picked up the prescription. A review of the dates of written prescriptions did not correspond with any doctor visits. Furthermore, the nurse practitioner and office manager verified that Salvini was not a patient at the time the prescriptions were issued. A prosecutor from the Office of the Berkshire County District Attorney prosecuted the case. COMING IN NOVEMBER 2016 IFB Seminar on Automobile Insurance Fraud Topics to include vehicle security systems, black boxes, investigative tips on hit-while-park incidents and auto thefts, a prosecutor s perspective on auto criminal investigations and prosecutions, and other topics. More details to follow... 3 focusfraud June 2016

4 IFB Marks 25 Years of Fraud-Fighting Success 73 Individuals Recognized at 25 th Anniversary Awards Ceremony Over the past twenty-five years, many individuals and organizations have contributed to the success of the Insurance Fraud Bureau. On May 26, 2016, the IFB observed its 25 th anniversary with an awards ceremony held at the Moakley Federal Court House. Seventy-three individuals from the insurance industry, law enforcement agencies and prosecutors offices were recognized for outstanding and invaluable contributions toward the fight against insurance fraud in Massachusetts. Award recipients represented individuals who have made significant contributions to the IFB s mission to investigate, prevent and deter insurance fraud. The following individuals were recognized: Christopher Aiello, Assistant District Attorney, Office of the Suffolk County District Attorney Benjamin Alvis, Special Agent, Federal Bureau of Investigation David Andrews, Assistant Attorney General, Office of Attorney General Maura Healey Gregory Barry, Assistant District Attorney, Office of the Berkshire County District Attorney Adrian Bispham, Assistant District Attorney, Office of the Suffolk County District Attorney Kimberly Blackwood, Special Agent, Federal Bureau of Investigation Detective Steven Blair, Boston Police Department Detective Scott Blakeney, Worcester Police Department Sandra Bower, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Sheriff Thomas Bowler, Berkshire County Sheriff s Office Derek Byron, Special Investigation Unit, Plymouth Rock Assurance Corporation Jeremy Bucci, Assistant District Attorney, Office of the Northwestern District Attorney s Office Darlene Cacace, Forensic Accountant, Federal Bureau of Investigation Detective Ted Cass, Springfield Police Department Suzette Cavanaugh, Special Investigation Unit, Pilgrim Insurance Company Audrey Cosgrove, former Assistant Attorney General, Office of Attorney General Maura Healey Jennifer Cotter, Assistant Attorney General, Office of Attorney General Maura Healey Detective Sergeant Kevin Crimmins, New York City Police Department Lieutenant John Cummings, Massachusetts State Police Detective Thomas Dawley, Pittsfield Police Department Thomas Demeo, Special Agent, Internal Revenue Service Officer Darren Derby, Pittsfield Police Department John Doherty, Special Agent, Internal Revenue Service Detective Patrick Donohue, New York City Police Department Michael Donovan, Assistant District Attorney, Office of the Cape & Islands District Attorney Shane Eldredge, Special Investigation Unit, Mapfre Insurance Matthew Elio, Special Agent, Federal Bureau of Investigation April English, Assistant Attorney General, Office of Attorney General Maura Healey Thomas Enos, former Special Investigation Unit, Safety Insurance Company Kelsey Force, Assistant District Attorney, Office of the Suffolk County District Attorney James Forsyth, First Assistant District Attorney, Office of the Hampden County District Attorney Steven Gagne, First Assistant District Attorney, Office of the Northwestern District Attorney Jennifer Goldstein, Assistant Attorney General, Office of Attorney General Maura Healey Matthew Green, Assistant District Attorney, Office of the Hampden County District Attorney Matthew Griffin, Special Investigation Unit, MetLife Auto & Home Kevin Griswold, Special Investigation Unit, Plymouth Rock Assurance Corporation Officer Ryan Guthrie, Lawrence Police Department (Continued on page 5) 4 focusfraud June 2016

5 IFB Marks 25 Years of Fraud-Fighting Success continued (Continued from page 4) Lori Holik, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Rita Iacone, Supervisory Special Agent, FBI Health Care Fraud Unit Renee Iantosca, Special Agent, Internal Revenue Service Ann Jablonski, Health New England Neil Johnson, Assistant Vice President, Liberty Mutual Insurance Company Detective David Kornacki, Ludlow Police Department Nancy LaFreniere, Claims Department, Progressive Insurance Company Officer Robert LeBlanc, Lynn Police Department Andrew Lelling, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Lynn Police Department Trooper Corey Mackay, Massachusetts State Police Philip Mallard, Assistant District Attorney, Office of the Essex County District Attorney Trooper Michael Martin, Massachusetts State Police Kelly McClare, Special Investigation Unit, Liberty Mutual Insurance Company Nancy McCormick, Special Agent, Federal Bureau of Investigation Mike Merolli, Special Investigation Unit, Mapfre Insurance Detective Alison Metcalfe, Ludlow Police Department Jennifer Mullen, Blue Cross/Blue Shield Massachusetts Kristen Noto, Assistant District Attorney, Office of the Middlesex County District Attorney John O Leary, Assistant District Attorney, Office of the Worcester County District Attorney Joshua Pakstis, Assistant Attorney General, Office of Attorney General Maura Healey Brian Pérez-Daple, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Daniel Pettinato, Special Investigation Unit, Arbella Mutual Insurance Company Frank Pietrasik, Hanover Insurance Company John Powers, Special Investigation Unit, Plymouth Rock Assurance Corporation Officer Steve Ricardi, Ludlow Police Department Sergeant Michael Simard, Lawrence Police Department Karen Southerland, Assistant District Attorney, Office of the Hampden County District Attorney Edward Spellman III, Special Investigation Unit, Arbella Mutual Insurance Company Vassili Thomadakis, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Detective Sergeant Louis Tulik, Ludlow Police Department Sarah Walters, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Jennifer Williams, Special Investigation Unit, MetLife Auto & Home Jonathan Wlodyka, Special Agent, Internal Revenue Service Shelby Wright, Assistant U.S. Attorney, Office of United States Attorney Carmen M. Ortiz Chief Michael Wynn, Pittsfield Police Department The IFB wishes to acknowledge everyone from insurance industry representatives, law enforcement and public agency personnel, to the public who submit suspected insurance fraud referrals for possible investigation. The prosecutors of the Offices of the Attorney General, United States Attorney and District Attorneys, federal and local law enforcement and other public agencies, insurance companies and many others have contributed to our success. We thank everyone for their dedication and perseverance in fighting insurance fraud. 5 focusfraud June 2016

6 Workers Compensation Claimant Fraud Case Update - Wilmington Man Fraudulently Collects More than $26,000 in Benefits Wilmington - Jerry Keith Bull II pleaded guilty on April 6, 2016 to charges of larceny by false pretenses and workers compensation insurance fraud in connection with fraudulently collecting more than $26,000 in disability benefits from Chubb Insurance Company. The court imposed a continued without a finding for one year with the condition he pay full restitution of $26,028 within that time. Investigation revealed that Bull suffered an injury working in a restaurant in June 2009 and began receiving temporary total disability benefits after he made a workers' compensation claim for medical expenses and recovery of lost wages. In April 2010, Bull began working in another restaurant while continuing to collect benefits. During this time period, Bull intentionally made false statements regarding his wages and failed to disclose his return to work in order to continue to collect benefits. Bull fraudulently collected approximately $26,000 in disability benefits between April 2010 and June Assistant Attorney General Sara Shannon from the AG s Insurance and Unemployment Fraud Division prosecuted the case. Automobile Insurance Fraud Case Update - Northborough Man Jumps Off Own Porch but Claims Injury as Sustained in Accident Northborough - On January 22, 2016 a Northborough man admitted to sufficient facts in Concord District Court to charges of motor vehicle insurance fraud and attempt to commit a crime. The case was continued without a finding for six months and he was ordered to pay $4,884 in restitution. On September 6, 2010, the Northborough man was a passenger in a friend s 2007 Ford Focus when the friend lost control of the vehicle and struck a large rock in a neighbor s front yard. The operator of the Ford was able to drive the additional 200 yards into the Northborough man's driveway where the vehicle stopped working. Police responded to the scene and the man was taken to the hospital by ambulance for a laceration to his face from the airbag as well as ankle pain. He also contacted the Ford operator s insurance carrier, MetLife Auto & Home, and reported the alleged ankle injury as sustained in the accident. However, the operator of the Ford, as well as another passenger in the vehicle at the time of the accident, stated that the man did not injure his ankle as a result of the Ford's impact with the rock but was injured when he fled the scene upon the arrival of police. Both witnesses stated that the man injured his ankle when he jumped off his own front porch and twisted it. The Northborough man admitted that he was not injured in the accident and that he hurt his ankle from a jump off his porch. Assistant District Attorney Nils Lundblad of the Middlesex County District Attorney s Office prosecuted the case. Newton Woman Claims Alleged Hit-While-Parked Incident Newton - A Newton woman was arraigned on February 11, 2016 on charges of motor vehicle insurance fraud and attempt to commit a crime. The woman reported to Safety Insurance Company that on January 6, 2013 her 2012 Toyota Corolla was allegedly hit-while-parked in Newton resulting in damage to the front and passenger side of the vehicle. Police were not notified of the alleged incident. A forensic examination of the vehicle found wood material embedded in the damage. In addition, data retrieved from the vehicle's Crash Data Retrieval (CDR) system concluded the Toyota s transmission shift position was in drive and the vehicle in motion at the time of the accident. Assistant District Attorney Andrew Ineson of the Middlesex County District Attorney s Office is prosecuting the case. (Continued on page 7) 6 focusfraud June 2016

7 Automobile Insurance continued (Continued from page 6) Bellingham Man Swaps Vehicles Before Alleged Theft Report Bellingham Complaints were issued against a Bellingham man on May 13, 2016 in Milford District Court on charges of motor vehicle insurance fraud, larceny over and false report of a motor vehicle theft. The Bellingham man reported to police and Liberty Mutual Insurance Company that his 1999 Ford Mustang Cobra was allegedly stolen from his residence on January 14, The vehicle was not recovered and he was paid approximately $10,997 for the theft claim. Liberty Mutual was subsequently notified by an individual claiming to be in possession of the Cobra. The individual was selling the Cobra when he was informed the vehicle was on a stolen vehicle list. Investigation revealed that the Bellingham man swapped the Cobra for an Audi S4 a week before he reported the alleged theft. The individual stated he saw an ad on Craigslist for the Cobra in January 2014, met with the Bellingham man on January 7, 2014 and they swapped vehicles. During this swap the Bellingham man provided the individual with the original Certificate of Title, vehicle registration, and repair receipts. The Bellingham man allegedly denied that he swapped his Cobra for the Audi; however the investigation revealed he added the Audi to his automobile insurance policy on January 8, 2014 and posted a Craigslist ad for the Audi on January 12, The case is being prosecuted by Assistant Attorney General Joshua Pakstis of the AG s Insurance and Unemployment Fraud Unit. Community Insurance Fraud Initiatives Highlights Boston CIFI On February 17, 2016 the case against a Revere woman was continued without a finding for six months on a charge of motor vehicle insurance fraud. She was ordered to pay $5,000 in restitution. On March 10, 2014 the woman reported to police and Mapfre Insurance that her parked 2011 Toyota Camry was keyed resulting in damage to the passenger's side and the driver's side front fender area. On March 17, 2014 Mapfre received a tip that the woman keyed her own vehicle so she could get a new paint job and was bragging about the scam at her place of work. The Revere woman stated to investigators that the passenger side of her Toyota was keyed by an unknown party but admitted she intentionally keyed the driver's side front fender area so that pre-existing damage to her front bumper would be repaired as part of her claim. The Boston task force is assisted by Boston Police Det. Steven Blair. Community Insurance Fraud Initiative (CIFI) cases are prosecuted by the Offices of Suffolk County District Attorney Daniel F. Conley and the Massachusetts Attorney General s Insurance and Unemployment Fraud Division. Lawrence CIFI The case against a Lawrence man was continued without a finding for one year on March 1, 2016 on charges of motor vehicle insurance fraud and attempt to commit a crime. He was ordered to pay $595 in restitution. The Lawrence man reported to Plymouth Rock Assurance Corporation that on August 4, 2014 his 2005 Acura TSX was allegedly parked when it was struck by an unknown vehicle resulting in damage to the vehicle s passenger side rear. A forensic examination concluded the vehicle was moving in reverse when it came into contact with a stationary wooden object or structure. Wood fiber material was found embedded within the damage. The Lawrence CIFI task force is assisted by detectives from Lawrence and other area police departments. CIFI cases are prosecuted by Essex County Assistant District Attorney Joshua Speicher. (Continued on page 8) 7 focusfraud June 2016

8 Insurance Fraud Bureau of Massachusetts 101 Arch Street Boston, Massachusetts PRESORTED STANDARD BOSTON, MA PERMIT NO RETURN SERVICE REQUESTED Community Insurance Fraud Initiatives Highlights continued (Continued from page 7) Western Massachusetts CIFI At trial, a West Springfield man was found guilty on January 12, 2016 of motor vehicle insurance fraud and found not guilty of attempt to commit a crime. He was ordered to pay a $1,000 fine. The West Springfield man reported to Plymouth Rock Assurance Corporation that his 2010 Toyota Camry was allegedly hit by an unknown vehicle while parked in his driveway on November 4, Investigation revealed that police had responded to his residence earlier that morning answering a 911 call for medical assistance and had discovered that the Toyota had been involved in a collision. Furthermore, police had questioned the West Springfield man several days before he reported the alleged hit -while-parked incident when they found automotive parts at an accident scene which linked to his Toyota. The Western Massachusetts task force is assisted by area police departments. CIFI cases are prosecuted by Hampden County First Assistant District Attorney James Forsyth, Berkshire County Assistant District Attorney Gregory Barry and First Assistant District Attorney Steve Gagne of the Northwestern Massachusetts District Attorney s Office which covers Franklin and Hampshire counties. Look for other CIFI stories on the IFB website at 8 focusfraud June 2016