AG Corbett Announces Longest Prison Terms in Insurance Fraud Section s History Six defendants in one of the largest slip and fall rings in the Commonwealth were sentenced to state prison and ordered to refund more than $84,000 that was illegally obtained through fraudulent insurance claims over a period of four years. The prison sentences for the key defendants were the largest imposed by a judge in any prosecution led by the Attorney General s Insurance Fraud Section. The suspects were sentenced by Blair County Court of Common Pleas Judge Daniel Milliron. The grand jury investigation known as Operation Family Fraud focused on the six defendants who at the time were living in two mobile trailer homes in Logan Township, Blair County. The suspects referred to themselves as The Family and the members were either blood related or linked romantically. In 2004, all six were arrested and charged with filing spurious insurance claims that defrauded numerous insurance companies out of more than $84,000. The phony claims that they were charged with were filed between 1999 and 2003. This particular gang of con artists may be the most brazen defendants to ever be prosecuted by our Insurance Fraud Section, said Attorney General Tom Corbett. Together, they pretended to suffer serious injuries from staged slip and fall accidents, car wrecks, food poisonings, and workrelated incidents. Three of the suspects used their minor children as claimants and witnesses in several bogus filings. Corbett said, These individuals were such good actors that their faked symptoms resulted in ambulance rides to nearby hospitals where emergency personnel performed a battery of tests and x-rays to determine appropriate treatment for their complaints. All of this was done just to generate medical expenses for insurance claims. This blatant disrespect for the law and others in need of real medical treatment makes this worthy of the stiffest penalties possible. The grand jury found that the defendants individually or collectively developed specialties in staging accidents at laundromats, restaurants, tavern parking lots, businesses and other commercial establishments. In all, phony claims worth more than $84,000 were paid-out as reimbursements for medical expenses and faked pain and suffering. All of the suspects pleaded guilty to the charges. Richard Frye was serve 8 to 16 years of incarceration and ordered to pay his share of the $84,866.22 Patricia Yeager was sentenced on May 22, 2006, to serve 5 years 2 months to 10 years 4 months of incarceration and ordered to pay her share of the $84,866.22 total restitution and all court 1
Travis Brickner was serve 3 to 6 years of incarceration and ordered to pay his share of the $84,866.22 total restitution and all court Charles Colson was sentenced on April 28, 2006 to serve 2 to 4 years of incarceration, ordered to pay his share of the $84,866.22 Janet Betar was sentenced on May 22, 2006, to serve 5 years 2 months to 10 years 4 months of incarceration and ordered to pay her share of the $84,866.22 total restitution and all court Thomas Miller was serve 2 to 4 years of incarceration, followed by 5 years probation and ordered to pay his share of the $84,866.22 Arrestts 2006 Insurance Agent Charged with Pocketing Nearly $167,000 of Elderly Client s Life Insurance Premiums An independent agent of the Degree of Honor Protective Association (DHPA) was arrested on May 10 and charged with stealing 2 $166,714 worth of life insurance premium payments belonging to an 85-year-old woman. The criminal complaint states that Robert S. Klein directed the policyholder, Claire L. Derringer of Pittsburgh, to make checks for the life insurance premium payable directly to him. Klein told Derringer that he would then forward the payments to DHPA. Derringer submitted checks to Klein for amounts that ranged between $2,000 and $9,000. Between 2001 and 2003, Klein deposited those checks directly into his personal bank accounts instead of forwarding them to DHPA. The defendant deposited nearly $167,000 of the elderly woman s money into his two personal bank accounts in Pittsburgh, Attorney General Tom Corbett said. The alleged criminal activity was revealed after the victim began receiving notices from the insurance company that her two policies were about to be canceled for lack of payment. The criminal complaint states that Derringer received several pre-cancellation notices from DHPA in 2004, claiming that the insurance company had not received payments on her policies since 2001. Corbett said, The victim attempted to reach Klein for several months to find out what happened to the payments. When she finally got in touch with him, he said that he would take care of it. That was the last time she heard from Klein, even though she continued to receive notices that her policies would be dropped. Corbett also stated that Derringer has been fully compensated by DHPA as a result of the investigation. DHPA terminated its contract with Klein in May of 2004 because he failed to provide proof that he renewed his license to write insurance policies. Klein s license expired in October of 2003. Klein has been charged with 8 counts of Insurance Fraud (F-3), 25 counts of Theft by Deception (F-3), and 25 counts of Theft by Failure to Make Required Disposition of Funds Received (F- 3). Klein was released on his own recognizance and waived his right to a preliminary hearing. The case will be prosecuted in the Washington County Court of Common Pleas. Other Arrests A man was arrested on May 2 in Bucks County and charged with collecting Workers Compensation Benefits during a period in which he was employed. Keith Thompson allegedly stole more than $12,000 from Cambridge
Integrated Services Group by collecting workers compensation while he was employed during the 3 rd and 4 th quarters of 2004. Thompson was charged with 1 count of Workers Compensation Insurance Fraud (F-3) and 1 count of Theft by Deception (F-3). Jeffery Lutz was arrested in Butler County on May 2 and charged with 1 count of Workers Compensation Fraud (F-3) and 1 count of Theft by Deception (M-1). The criminal complaint states that Lutz had been illegally collecting both unemployment and workers compensation benefits simultaneously. The State Workers Insurance Fund (SWIF) had paid Lutz approximately $1,300 in wage benefits. A woman was arrested in Chester County on May 3 on 1 count of Theft by Deception (F-3), 1 count of Workers Compensation Fraud (F-3), and 1 count of Forgery (M-1). Sylvia L. King allegedly forged her mother s signature on 90 workers compensation checks, deposited 3 into her sister s account, and cashed 87 others between February 2000 and April 2004. The checks totaled $55,080 and were all sent by US Steel as payment for workers compensation benefits payable to King s mother Dolores, who died in October of 1998. A man was arrested on May 11 in Washington County for allegedly committing fraud by stating that he was totally disabled in support of a $35,000 settlement with the State Workers Insurance Fund (SWIF). The criminal complaint states David Smith received benefits from SWIF between July 1999 and May 2001, including the settlement amount. Despite his statement that he was totally disabled, it was discovered that Smith had been working in Maryland since November 2000. Smith was charged with 2 counts of Workers Compensation Fraud (F-3) and 1 count of Theft by Deception (F-3). A Chester County man was arrested May 11 for charges stemming from a December 7, 2004 single vehicle accident. The charges allege that Roosevelt Hoggard at the time of the accident told police that he had been driving the vehicle. However, when the claim was reported to Progressive Insurance, Hoggard indicated that his wife had been driving at the time of the accident. Hoggard was an excluded driver on the policy because of a suspended license, and therefore the damage to the vehicle would not have been covered under the policy. Hoggard was charged with 1 count of Insurance Fraud (F- 3) and 1 count of Criminal Attempt Theft by Deception (F-3). On May 18, a man in Allegheny County was arrested in connection with falsified claims of his vehicle being stolen. Morgan Grimm had reported to State Farm Insurance on or about April 2, 2005 that his vehicle had been stolen from in front of his house. The vehicle was recovered at a Sheetz Gas Station in Penn Hills and it was later discovered that Grimm himself allegedly wrecked the vehicle, parked it at the gas station and reported it stolen. He was charged with 1 count of Insurance Fraud (F-3), 1 count of Theft by Deception (F-3), and 1 count of False Reports to Law Enforcement Authorities (M-3). A formerly married couple was arrested after being found hiding in Montgomery County on May 24 for giving false statements in support of a personal injury claim stemming from a June 6, 2005 car accident. Bruce and Linda Heller gave conflicting statements as to who was driving at the time of the accident. Bruce and a third passenger submitted signed statements to the police that Linda had been driving. Linda was an excluded driver on the policy and would only be entitled to receive a maximum of $5,000 in benefits for her claim. Linda s claim was in excess of $29,000. Six weeks after initially telling Progressive Insurance that Linda had been driving the car, Bruce allegedly gave another statement, stating that he had been driving. If Progressive believed that Linda was a passenger, she would have received $15,000 on her claim. Linda is also accused of providing a recorded statement to Progressive, stating that her husband was driving. The Hellers are charged with 2 counts of Insurance Fraud (F-3) and 1 count of Criminal Attempt Theft by Deception (F-3). On May 24, a man was arrested in Fayette County for submitting falsified documents in support of his claim to Motorists Insurance 3
Group for a burglary that occurred in June of 2003. Kenneth C. Williams motorcycle was stolen from a repair shop, and Williams allegedly supplied the shop owner with forged receipts for the motorcycle and expensive after-market parts. Williams was charged with 1 count of Insurance Fraud (F-3), 1 count of Criminal Attempt Theft (F-3), and 1 count of Forgery (M- 1). A man was arrested in Cambria County on May 24 for submitting forged medical invoices to the Safeco Insurance Company. Chad Dickson allegedly falsified documents showing that he received additional medical treatment following an automobile accident in an effort to obtain more money from Safeco. Dickson was charged with 1 count of Insurance Fraud (F-3), 1 count of Theft by Deception (M-1), 1 count of Forgery (M- 1), and 1 count of Criminal Attempt Theft (F-3). Mary Ann Nyce was arrested in Chester County on May 25, 2006 for giving a false statement in support of a claim on a Progressive Insurance policy. Nyce allegedly stated that she had been a passenger in a car owned by Wendell Johnson, when evidence shows she was driving the vehicle at the time of the accident. Nyce was an excluded driver on the policy. She has been charged with 1 count of Insurance Fraud (F-3) and 1 count of Criminal Attempt Theft by Deception (M-1). A man was arrested in Allegheny County on May 25 for false statements made to USAA regarding kitchen fixtures in a house that was repossessed by Washington Mutual. In a recorded statement, Anthony Isasky denied that he had removed fixtures from the kitchen, but an investigation revealed that Isasky allegedly removed and retained the fixtures. Isasky was charged with 1 count of Insurance Fraud (F-3) and 1 count of Theft by Unlawful Taking or Disposition (F-3). On May 25 a woman was arrested in Lebanon County and charged with 1 count of Insurance Fraud (F-3) and 1 count of Criminal Attempt Theft (F-3). Amy Jo Deamer reported to Allstate Insurance Company that her car had been stolen. When the vehicle was recovered, Deamer alleged that the stereo had been stolen and damage had been done to the vehicle. An investigation revealed that the damage Deamer had claimed existed prior to the alleged theft. Russell Lynch was arrested in Washington County on May 31 for fraudulently collecting workers compensation benefits from the Guard Insurance Group. The charges state that while Lynch was collecting benefits from a March 29, 2005 work-related injury, he began working as a mechanic for a used car dealer in the summer of 2005. Lynch was charged with 2 counts of Workers Compensation Fraud (F-3) and 1 count of Theft by Deception (F-3). Conviicttiions On May 1 a man pled guilty to 1 count of Workers Compensation Fraud (F-3). Bobby Fagan made false statements about his physical condition and employment status while he was collecting workers compensation benefits from AIG Insurance. Fagan had in fact worked for 3 different construction companies during the year 2000. He had been collecting benefits from AIG for the period between 1996 and 2003. Fagan was sentenced to 3 to 23 months incarceration and ordered to pay all extradition, court costs, and restitution in the amount of $10,281.50. On May 2 a woman was sentenced to 2 years of probation, 100 hours of community service, and ordered to pay restitution and court costs after pleading guilty to Insurance Fraud (F-3) and Theft by Deception (F-3). Doreatha Glenn reported on August 29, 2002 to Philadelphia Police and Sentry/Dairyland Insurance that her car had been stolen. Glenn s statements as to where the car was parked and when it was stolen changed with each statement she made in support of her claim. Ultimately, Glenn admitted that because she was having difficulties with the vehicle, she wanted it to be stolen, and therefore left it unlocked with the keys in the ignition in order to facilitate the theft. Glenn s car was later found burned, and Sentry/Dairyland paid her nearly $8,000 for the loss. A man pled guilty to Criminal Attempt Theft (M- 1) and was sentenced to 2 years of probation, 4
50 hours of community service, and ordered to pay restitution and court costs for the role he played in assisting another man commit insurance fraud. Orlando Poke pretended to be a third party driver of Darryl Jackson s vehicle and gave statements to Progressive Insurance in support of a claim alleging that Jackson was not the driver in an accident that occurred in June of 2005. Recorded statements revealed that Poke required constant prompting from Jackson, who was the actual driver, in order to answer the Progressive agent s questions. Cynthia Maddox pled guilty to 1 count of Insurance Fraud (F-3) on May 8 and was sentenced to 2 years of probation, 50 hours of community service, fined $300, and ordered to pay court Maddox conspired with a friend to file a claim with Erie Insurance Company for an incident in which Maddox s teeth were allegedly injured. Maddox s dentist indicated that her teeth were not injured, but rather Maddox had a pre-existing dental condition. On May 10 a woman was sentenced to 2 years of probation and ordered to pay a $500 fine and all court costs after pleading open to 1 count of Insurance Fraud (F-3) and 1 count of Acquisition of a Controlled Substance by Misrepresentation, Fraud and/or Forgery (F). Cheryl Price had called in 39 prescriptions over the period between November 2001 and January 2003, holding herself out to be an employee of doctors offices calling in the prescriptions and used the doctors identifiers. Price used her husband s and daughter s names in addition to her own as the patients for which the controlled substances were prescribed. All the prescriptions were paid for by Aetna Insurance. When interviewed by Insurance Fraud Section agents, Price admitted to calling and picking up the prescriptions for her personal use. On May 23, a woman was sentenced pursuant to her January 10, 2006 open guilty plea to 2 counts of Insurance Fraud (F-3). Geneva Yeiser s car was rear-ended by another vehicle on June 3, 2004. Yeiser filed a claim with the other driver s provider, Erie Insurance Company, claiming injuries to herself and her passenger. An investigation revealed that Yeiser did not have a passenger with her at the time of the accident, nor did she suffer the injuries she alleged. Yeiser has been sentenced to 23 months of probation for each count of Insurance Fraud, running concurrently, as well as ordered to pay all court A man pled guilty to 1 count of Insurance Fraud (F-3) on May 30 in Cumberland County. Henry H. Bruker, III, added comprehensive automobile coverage to his Progressive Insurance policy on July 25, 2003. On August 13, 2005, Bruker filed an auto claim with Progressive, claiming his car was damaged by a hail storm. The defendant then attempted to collect $3,212.50 from Progressive Insurance Company that he was not entitled to. An investigation revealed that the hail storm actually occurred on July 22, 2003, three days prior to Bruker s addition of comprehensive coverage to the policy. Bruker was sentenced to 3 to 15 months incarceration and was ordered to pay all court On May 31, a man pled guilty to one count of Attempted Theft by Deception (F-3) for submitting a claim to Progressive Insurance for damage to his vehicle that pre-existed the vehicle s coverage on the policy. Joseph Reynolds placed his truck on his Progressive policy on March 1, 2005 and reported an accident as having occurred on March 2, 2005. An investigation revealed that the damage to the vehicle pre-existed March 1, 2005. Reynolds was sentenced to 2 years of probation, 50 hours of community service, and ordered to pay all court Acccceelleerratteed Reehabiilliittattiivvee Diisspossiittiionss ((ARD)) Four additional defendants received ARD and were placed on probation during the month of April. For more information on the Insurance Fraud Section, log on to www.attorneygeneral.gov 5