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INSURANCErF audrF audN E W J E R S E Y

2003 Annual Report of the New Jersey Office of the Insurance Fraud Prosecutor

Special Report:Cracking Fraud Rings

OIFP Draws International Praise

Closing Loopholes: Proposals forLegislative and Regulatory Reform

New Crime TakesAim at Insurance Cheats

How “Runners” Corrupt the Health Care System

Public and Private Sectors Join Forces in Fraud War

Don’t Do It. Don’t Tolerate It.

1.877.55.FRAUDCal lConfidentially

How’d they find out? INSURANCE FRAUDIS A

SERIOUSCRIME.

N E W J E R S E Y O F F I C E O F I N S U R A N C E F R A U D P R O S E C U T O R

Inside Front Cover

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Annual Report StaffJohn J. Smith, Jr.First AssistantInsurance Fraud ProsecutorAssistant Attorney GeneralStephen D. MooreEditorSupervising Deputy Attorney GeneralMelaine CampbellCo-EditorSupervising Deputy Attorney General

Feature WritersJohn ButchkoSpecial AssistantNorma R. EvansSupervising Deputy Attorney GeneralJohn KrayniakSupervising Deputy Attorney General

Michael A. MonahanSupervising Deputy Attorney GeneralScott R. PattersonSupervising Deputy Attorney GeneralStephanie StenzelSupervising State Investigator

ContributorsJennifer FradelSupervising Deputy Attorney General

Charles JanousekSpecial Assistant

Barry T. RileySupervising State InvestigatorPhotographersVincent A. MatulewichManaging Deputy Chief Investigator

Carlton A. CooperCivil Investigator

ProductionPaul KramlArt DirectorSina AdlGraphic Designer

Administrative andTechnical SupportPaula CarterSusan CedarJoan EnrightPat MillerCynthia RonanLynn WassermanJacqueline Wendel

Annual Report of

The New JerseyOffice of the

Insurance FraudProsecutor

Prepared by:

Office of the Attorney GeneralDepartment of Law and Public Safety

Division of Criminal JusticeOffice of the Insurance Fraud Prosecutor

P.O. Box 094Trenton, NJ 08625-0094

609-896-8888www.njinsurancefraud.org

Peter C. HarveyAttorney General

Vaughn L. McKoyDirector, Division of Criminal Justice

Greta Gooden BrownInsurance Fraud Prosecutor

for Calendar Year 2003

SubmittedMarch 1, 2004

(Pursuant to N.J.S.A. 17:33A-24d)

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Contents

5Message FromMessage FromMessage FromMessage FromMessage FromThe Insurance Fraud ProsecutorThe Insurance Fraud ProsecutorThe Insurance Fraud ProsecutorThe Insurance Fraud ProsecutorThe Insurance Fraud Prosecutor

8Special Report:Special Report:Special Report:Special Report:Special Report:OIFP Targets Fraud RingsOIFP Targets Fraud RingsOIFP Targets Fraud RingsOIFP Targets Fraud RingsOIFP Targets Fraud Rings

16

OIFP’s Prosecutions ProveOIFP’s Prosecutions ProveOIFP’s Prosecutions ProveOIFP’s Prosecutions ProveOIFP’s Prosecutions ProveCorrupting Influence of “Runners”Corrupting Influence of “Runners”Corrupting Influence of “Runners”Corrupting Influence of “Runners”Corrupting Influence of “Runners”On Health Care SystemOn Health Care SystemOn Health Care SystemOn Health Care SystemOn Health Care System

Pharmacy Scams Busted byPharmacy Scams Busted byPharmacy Scams Busted byPharmacy Scams Busted byPharmacy Scams Busted byOIFP’s Medicaid Fraud SectionOIFP’s Medicaid Fraud SectionOIFP’s Medicaid Fraud SectionOIFP’s Medicaid Fraud SectionOIFP’s Medicaid Fraud Section

OIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International Acclaim

Insurance ReformsInsurance ReformsInsurance ReformsInsurance ReformsInsurance ReformsToughen Fraud PenaltiesToughen Fraud PenaltiesToughen Fraud PenaltiesToughen Fraud PenaltiesToughen Fraud Penaltiesand Give OIFP New Toolsand Give OIFP New Toolsand Give OIFP New Toolsand Give OIFP New Toolsand Give OIFP New Tools

50

OIFP’s Public Awareness and InsuranceOIFP’s Public Awareness and InsuranceOIFP’s Public Awareness and InsuranceOIFP’s Public Awareness and InsuranceOIFP’s Public Awareness and InsuranceFraud Training Programs Spread the WordFraud Training Programs Spread the WordFraud Training Programs Spread the WordFraud Training Programs Spread the WordFraud Training Programs Spread the Wordon Insurance Fraudon Insurance Fraudon Insurance Fraudon Insurance Fraudon Insurance Fraud

OIFP Civil Enforcement ActionsOIFP Civil Enforcement ActionsOIFP Civil Enforcement ActionsOIFP Civil Enforcement ActionsOIFP Civil Enforcement ActionsPack a One – Two PunchPack a One – Two PunchPack a One – Two PunchPack a One – Two PunchPack a One – Two PunchIn The Fight On FraudIn The Fight On FraudIn The Fight On FraudIn The Fight On FraudIn The Fight On Fraud 44

26

32

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OIFP’s Office Structure,OIFP’s Office Structure,OIFP’s Office Structure,OIFP’s Office Structure,OIFP’s Office Structure,Organization and OperationsOrganization and OperationsOrganization and OperationsOrganization and OperationsOrganization and Operations

Cooperation, CoordinationCooperation, CoordinationCooperation, CoordinationCooperation, CoordinationCooperation, Coordinationand Communication Key to OIFP Successand Communication Key to OIFP Successand Communication Key to OIFP Successand Communication Key to OIFP Successand Communication Key to OIFP Success

OIFP Funds County Prosecutors’OIFP Funds County Prosecutors’OIFP Funds County Prosecutors’OIFP Funds County Prosecutors’OIFP Funds County Prosecutors’Insurance Fraud Fighting EffortsInsurance Fraud Fighting EffortsInsurance Fraud Fighting EffortsInsurance Fraud Fighting EffortsInsurance Fraud Fighting Efforts

Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:OIFP’s Recommendations forOIFP’s Recommendations forOIFP’s Recommendations forOIFP’s Recommendations forOIFP’s Recommendations forLegislative and Regulatory ReformLegislative and Regulatory ReformLegislative and Regulatory ReformLegislative and Regulatory ReformLegislative and Regulatory Reform

Insurance Fraud Case HighlightsInsurance Fraud Case HighlightsInsurance Fraud Case HighlightsInsurance Fraud Case HighlightsInsurance Fraud Case Highlights

OIFP Criminal Case Descriptions – Insurance FOIFP Criminal Case Descriptions – Insurance FOIFP Criminal Case Descriptions – Insurance FOIFP Criminal Case Descriptions – Insurance FOIFP Criminal Case Descriptions – Insurance Fraudraudraudraudraud

OIFP Criminal Case Descriptions – Medicaid FOIFP Criminal Case Descriptions – Medicaid FOIFP Criminal Case Descriptions – Medicaid FOIFP Criminal Case Descriptions – Medicaid FOIFP Criminal Case Descriptions – Medicaid Fraudraudraudraudraud

2003 Medicaid Civil Case Settlements2003 Medicaid Civil Case Settlements2003 Medicaid Civil Case Settlements2003 Medicaid Civil Case Settlements2003 Medicaid Civil Case Settlements

County PCounty PCounty PCounty PCounty Prosecutors’ Offices Criminal Case Summariesrosecutors’ Offices Criminal Case Summariesrosecutors’ Offices Criminal Case Summariesrosecutors’ Offices Criminal Case Summariesrosecutors’ Offices Criminal Case Summaries

OIFP Civil Investigations and ActionsOIFP Civil Investigations and ActionsOIFP Civil Investigations and ActionsOIFP Civil Investigations and ActionsOIFP Civil Investigations and Actions

OIFP Civil LitigationOIFP Civil LitigationOIFP Civil LitigationOIFP Civil LitigationOIFP Civil Litigation

PPPPProfessional Licensing Professional Licensing Professional Licensing Professional Licensing Professional Licensing Proceedingsroceedingsroceedingsroceedingsroceedings

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Sowing and Reaping inthe War on Insurance Fraud

I am proud to present the fifth Annual Report of the Office of the InsuranceFraud Prosecutor (OIFP) to the Governor and Legislature of the State of New Jer-sey as required by N.J.S.A. 17:33A-24d. I am pleased to report that, in 2003, wemet our goals and exceeded our expectations. In 2003, OIFP prosecuted morecriminal cases than any other year in OIFP’s history. In addition, we continued tosow the seeds for successful investigations and prosecutions long into the future.

Over the past year, New Jersey attained record highs, both in the number ofthose charged with, and those convicted of, committing insurance fraud. In 2003,OIFP, together with OIFP funded County Prosecutors’ Insurance Fraud Units,filed criminal insurance fraud related charges against 730 individuals. We obtainedconvictions against 379 defendants, 109 of whom were sentenced to a total of 194years in prison. OIFP cases, alone, accounted for over 70% of the prison timemeted out to convicted insurance fraud felons.

On the civil side, OIFP’s record in 2003 was equally impressive. As reportedin December of 2003 by the Coalition Against Insurance Fraud in its most recentnational insurance fraud survey, the New Jersey Office of the Insurance FraudProsecutor led the nation in the number of civil sanctions imposed, accounting for86% of all civil actions taken in the nation. Moreover, in 2003, all of New Jersey’senforcement efforts resulted in insurance cheats being ordered to pay over $16.5million constituting restitution, criminal fines and civil penalties.

While OIFP was conceived, in part, to address New Jersey’s burgeoningauto insurance rates, the savings to New Jersey’s insurance consumer result-ing from OIFP’s successful prosecutions cannot be precisely quantified. It is un-deniable, however, that by identifying, prosecuting and punishing insurancecheats, OIFP prevents losses of millions of dollars each year. Indeed, some ofthe successful prosecutions highlighted in this Report, particularly with respectto staged accident rings, have resulted in savings of millions of dollars thatwould have otherwise been drained from New Jersey’s insurance systemthrough the submission of fraudulent bodily injury claims alone. Further, OIFPundoubtedly deters countless other potential fraudsters from committing insur-ance fraud by publicizing its successful prosecutions.

The fruits of OIFP’s labor increasingly drew the attention of others in 2003,both here and abroad. OIFP’s accomplishments were the feature story of the De-cember 2003 edition of Fraud International Magazine. In addition, in 2003, OIFPwas selected as a national finalist for the prestigious International Association ofChiefs of Police (IACP) and ChoicePoint Award. The Award recognizes excep-tional innovation and excellence in criminal investigations.

While we are proud of the official record of our achievements in 2003, we areequally proud of the tireless efforts of our staff who toil daily behind the scenes tolay the groundwork for our present and future successes. Their mandate, whichthey fulfill with uncompromising efficacy, is to be productive while maintaining thehigh quality evidenced in our investigations, prosecutions and programs thathave become our trademark.

OIFP’s remarkable progress in its brief five year history may be attributed toseveral factors. The seeds of OIFP’s success were initially sown by the New Jer-sey Legislature when it created OIFP through the enactment of the Automobile

A MessageFrom The Insurance Fraud Prosecutor

Greta Gooden Brown

continued on next page

Insurance Cost Reduction Act of 1998 (AICRA). AICRA designated OIFP as NewJersey’s lead agency in the war on insurance fraud and provided it with the re-sources to wage an unrelenting war.

In 2003, Governor James E. McGreevey signed into law landmark legislationwhich created the specific crime of insurance fraud and established a reward pro-gram for members of the public to provide information leading to the identifica-tion, prosecution and conviction of insurance cheats. With this single act, Gover-nor McGreevey has sown the seeds for OIFP’s continued success by increasingthe penalties for committing insurance fraud in New Jersey, solidifying NewJersey’s position as a national leader in combating fraud and enlarging OIFP’sarsenal of weapons in the war against insurance fraud.

OIFP’s success may also be attributed to the contributions of our partnersand allies in other law enforcement and public agencies as well as the insuranceindustry. The outstanding contributions of our partners in the law enforcementcommunity and the insurance industry, in particular, enable us to bring to fruitionOIFP’s statutory mission of providing for “a more effective investigation and pros-ecution of fraud” in New Jersey than existed in the past. Achieving this missioninures to the benefit of New Jersey’s insurance buying public who are the ulti-mate victims of insurance fraud.

Finally, OIFP’s success would not have been possible without the supportand leadership of Attorney General Peter C. Harvey and Assistant Attorney Gen-eral Vaughn L. McKoy, Director of the Division of Criminal Justice. Attorney Gen-eral Harvey and Director McKoy are the principal facilitators who enable OIFP toachieve the results for which it was created.

We in OIFP recognize and welcome the challenges that lay before us in themonths and years ahead. We will continue in the coming year to conduct thor-ough investigations, to develop solid cases, to prosecute aggressively and to sowthe seeds for future investigations and prosecutions. We will continue to developeffective anti-fraud programs and initiatives. We will continue to seek new andbetter ways to accomplish our mission, be it the planning of successful sting op-erations, the tackling of organized insurance fraud rings, or the application of hightech data mining tools to identify new fraudulent patterns or trends. We will con-tinue to spread the word to those who would dare to commit insurance fraud inthe State of New Jersey, that they, too, shall reap what they sow.

Respectfully submitted,

Greta Gooden BrownNew Jersey Insurance Fraud Prosecutor

OIFP Targets Fraud RingsOIFP Targets Fraud RingsOIFP Targets Fraud RingsOIFP Targets Fraud RingsOIFP Targets Fraud Rings

Vehicles recovered by OIFPState Investigators in undercover

sting “Operation Give and Go.”

8

It came in to the Newark Police dis-patcher as a frantic 911 call. The callersaid he had just been the victim of acarjacking at the intersection of Williamand Halsey Streets by a man armedwith a gun. Units from the Newark PoliceDepartment were immediately dispatchedto the scene, given the very serious na-ture of the call. When the police arrivedat the scene moments later, the victimexcitedly described in detail the armedand dangerous carjacker, how he stuckthe gun in the victim’s face, how hetook his car.

A witness also volunteered that hehad seen the whole thing, confirmingthe car owner’s story. Despite a diligentsearch, the Newark police could notfind the owner’s car or the carjacker.Later, the owner, a computer program-mer for a major corporation, filed atheft claim with his insurance carrier forthe total theft loss and the carrier paidover $16,000 on the claim.

Only, there was no carjacking, and

the owner was no victim at all. He wasa thief, who faked the entire carjackingscenario with a friend in order to file afraudulent insurance claim. How didthe authorities know? Because the carhad been in the possession of State In-vestigators from the Office of the Insur-ance Fraud Prosecutor (OIFP) for sixfull days at the time the owner reportedthe carjacking, having been purchasedfrom a street-level middleman duringOperation Give and Go, a pro-activeundercover initiative by OIFP to con-front the growing problem of owner“give-ups” and stolen automobiles innorthern New Jersey.

To conduct the investigation, un-dercover OIFP investigators gained ac-cess to middlemen who traffic in owner“give-ups,” where the owner literally“gives-up” the vehicle to someone elsewith the understanding the vehicle will“disappear,” allowing the owner to file afalse theft claim and fraudulently col-lect insurance benefits for the alleged

OIFP Criminal ProsecutionsOIFP Criminal ProsecutionsOIFP Criminal ProsecutionsOIFP Criminal ProsecutionsOIFP Criminal Prosecutionsat All-Time Highat All-Time Highat All-Time Highat All-Time Highat All-Time High

OIFPTargetsFraud Rings

by Michael A. Monahan by Michael A. Monahan by Michael A. Monahan by Michael A. Monahan by Michael A. Monahan

9


Being Done About Insurance Fraud?Being Done About Insurance Fraud?Being Done About Insurance Fraud?Being Done About Insurance Fraud?Being Done About Insurance Fraud?What Is

The New Jersey Office of the Insurance Fraud Prosecutor (OIFP) leads NewJersey’s fight against insurance fraud. Created by the New Jersey Legislature onMay 19, 1998, pursuant to the provisions of the Automobile Insurance Cost Reduc-tion Act (AICRA), OIFP was established as a law enforcement agency within theDivision of Criminal Justice in the Department of Law and Public Safety to adminis-ter a comprehensive and well integrated program to investigate and prosecute in-surance fraud as effectively and efficiently as possible. Accordingly, OIFP wasvested under AICRA with authority and responsibility for investigating all types of in-surance fraud and for conducting and coordinating criminal, civil and administrativeinvestigations and prosecutions of insurance and Medicaid fraud throughout NewJersey. To provide for the most effective and well integrated statewide strategy pos-sible to combat insurance fraud, OIFP’s authority under AICRA includes responsi-bility for the oversight of all anti-insurance fraud efforts of law enforcement and otherpublic agencies and departments in New Jersey, as well as appropriate coordina-tion with private industry. Where fraud has occurred, OIFP pursues criminal pros-ecutions and civil sanctions, including prison sentences, monetary penalties and,in the case of professionals, permanent license revocations. In addition to tradi-tional law enforcement functions, OIFP offers a comprehensive roster of programsto inform the public, train law enforcement officers and marshal resources of thepublic and private sectors to eradicate fraud.

State InvestigatorsMarc Cofone

and Jose Vendasexamine a

seized vehicle.

10

loss. To lend an air of legitimacy to theoperation, OIFP rented a garage in Jer-sey City, completely outfitted with toolsand auto parts, where the middlemencould bring the cars to the undercoverOIFP investigators. Unbeknownst towould-be insurance cheats, however,the garage was also fully equippedwith concealed audio and video re-corders to memorialize all activity atthe shop. As a result of this initiative,OIFP State Investigators conductingOperation Give and Go recovered 46automobiles and SUVs, with a totalvalue of approximately $1 million, and28 middlemen and “give-up” owners,including the owner and friend whofaked the carjacking, were indicted fortheir roles in the conspiracy and thefts.

Operation Give and Go is but oneexample of many exciting and suc-cessful investigations conducted byOIFP-Criminal in 2003. Whether crack-ing a staged motor vehicle theft or ac-cident or arson-for-hire ring, or expos-ing an unscrupulous health care pro-vider billing an insurance carrier forservices never rendered, or arresting adishonest insurance broker stealingpremium monies, the successes of theinvestigations in OIFP-Criminal weremany and varied. In State v. IrisSalkauski, for instance, 49 defendantswere indicted for staging car accidentsin Camden County and filing fraudu-lent Personal Injury Protection (PIP)claims totaling $567,940 for fictitious in-juries. Undercover law enforcement of-ficers ultimately infiltrated the ring byposing as participants in one of thestaged accidents.

The leader of that staged accidentring, Iris Salkauski, attempted to thwartlaw enforcement’s efforts to bring herto justice by fleeing New Jersey aftershe was indicted. As a result,Salkauski was placed on New Jersey’sTen Most Wanted List and was trackeddown to a house in Florida where offic-ers found her cowering in a bedroom

Auto insurance fraud occurs when a person deceives an insurance providerto collect money to which he is not entitled or to avoid paying the appropri-ate amount of premiums. Providing false or misleading information in sup-port of a claim, on an insurance application, or in an application for an en-dorsement or policy renewal constitutes an act of insurance fraud. Submittingany type of false or altered receipts, bills, repair estimates or any inaccuratedocuments to support a loss, expense or injury is insurance fraud. Buying orselling a fake automobile insurance identification insurance card is anotherform of insurance fraud.

The most common kinds ofauto insurance fraud in New Jersey include:

– Fake or exaggerated injury claims

– Phony auto theft claims

– Staged accidents

– False billing by medical providers

– Lying on an application for insurance

– Using a fake automobile insurance identification card

In New Jersey insurance fraud is a serious crime punishable bysignificant criminal and civil penalties including jail time.

Here is What You Can DoBe aware. If a car suddenly pulls in front of you, forcing you to follow tooclosely, someone may be setting you up for a staged accident. If you are in-volved in an accident, call the police. Record the license plate, driver’s li-cense number, insurance information and identities of all involved, includingpassengers and witnesses. Beware of unsolicited offers from one or morestrangers who may contact you after an accident recommending a medicalprovider or an attorney. This unsolicited help could be the work of a fraud ring.If you think you are a victim of fraud, immediately contact your insurance com-pany and the New Jersey Office of the Insurance Fraud Prosecutor.

What IsAuto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?

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Attorney General Peter C. Harveyannounces that Iris Salkauski, in-

dicted leader of a “staged accident”insurance fraud ring, is one of the

Division of Criminal Justice’s “MostWanted” fugitives. The ”Appre-

hended” designation in theSalkauski “Wanted Poster” tells the

rest of the story. Within weeks ofher indictment, Salkauski was ap-

prehended, hiding in a closet insidea Florida residence. Salkauski’s ar-rest was secured through the efforts

of the New Jersey/New York Fugi-tive Task Force, an unprecedented

law enforcement initiative, spear-headed by the New Jersey Divisionof Criminal Justice, which combinesthe resources, intelligence gathering

capabilities, investigative informa-tion and expertise of 50 law en-

forcement agencies and more than150 federal, state, county and local

law enforcement officers.

apprehended

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What IsHealth Insurance Fraud?Health Insurance Fraud?Health Insurance Fraud?Health Insurance Fraud?Health Insurance Fraud?Health insurance fraud occurs when a person deceives a health coverage providerin order to collect money to which he is not entitled, to avoid paying the appropriateamount of premiums or to obtain coverage for which he is not eligible. Providingfalse or misleading information about being an employee or a member of aunion or other group to pay lower premiums, concealing a pre– existing medicalcondition at the time of application or submitting any type of false medical bill,receipt, diagnosis, treatment or service to a health insurance provider is healthinsurance fraud.

The most common kinds of health insurance fraud in New Jersey include:

Provider Fraud– Billing for services not provided

– Billing for more expensive services than were provided (known as “Upcoding”)

– Billing for separate procedures which must be billed collectively (known as“Unbundling”)

– Providing treatments or services which were not medically necessary

– Billing an insurer for services which the patient believes are free or complimentary– Billing for services rendered beyond the scope of a provider’s license

Patient Fraud– Submitting claims for services or treatments not provided

– Submitting altered or forged receipts for reimbursement– Having a medical provider misrepresent diagnosis or treatment to pay for somethingwhich is not covered

– Lying about residency to obtain or to keep New Jersey health insurance

Business Fraud– Creating a fake group or organization to obtain less expensive group coverage

– Adding family members or other individuals who are not employees or members ofa group to a group policy

What Does It Cost?Health Insurance Fraud costs Americans $54* billion a year and accountsfor up to 10% of the annual expenditure on health care in the U.S. Studies also showthat for every 1% rise in insurance premiums approximately 400,000* more peoplenationwide will not be able to afford health insurance.

* National Health Care Anti-Fraud Association

Here’s What You Can DoAlways review the Explanations of Benefits you receive from your health coveragecarrier. The EOB reflects bills submitted by your medical provider for services andtreatments which you have received and states what was paid to the provider.Always verify that the charges accurately reflect the correct treatments, services,dates and medical equipment provided. If something doesn’t seem right or you haveany questions, call your health coverage provider.

closet. Upon her return to New Jersey,this time with an OIFP-Criminal escort,she pled guilty and was sentenced onNovember 14, 2003, to five years inState prison for her crimes. Most of theother defendants in the case have alsopled guilty and have been sentenced toterms of imprisonment or probation.

OIFP-Criminal investigations alsotargeted arson-for-hire rings in 2003with great success. By way of example,in State v. Rossi, OIFP investigatorscracked an arson-for-hire ring in Mer-cer County responsible for at least sixarson fires which were set in resi-dences or businesses for the purposeof collecting insurance money. MarcRossi, the ringleader and owner of aninsurance claims adjusting service,pled guilty to conspiracy to commit ar-son, theft by deception and othercharges. In pleading guilty, Rossi ad-mitted to either planning or participat-ing in setting the fires which resulted invarious insurance carriers paying outover $530,000 in property damageclaims. Under the terms of his pleaagreement, Rossi faces ten years inprison and must make full restitution tothe insurance carriers for his role in thescheme. All of the other participants inthe arson-for-hire conspiracy have alsopled guilty, including three who weresentenced to State prison and threemore who were sentenced to probation.

In 2003, OIFP-Criminal investiga-tions also targeted dishonest healthcare providers. In State v. Tsilionis, forexample, OIFP-Criminal indictedGeorge and Lisa Tsilionis, husbandand wife chiropractors, charging themwith conspiracy, health care claimsfraud and money laundering for or-chestrating an alleged insurance fraudscheme which billed dozens of insur-ance carriers more than $1.2 million forphony chiropractic “treatments” orother services that were never pro-vided. To perpetrate the fraud, OIFP-Criminal alleged that, over a three year

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Criminal Convictions

Year

1999 2000 2001 2002

78 7586

154

Nu

mb

er o

f C

on

vict

ion

s

period, the chiropractors regularly sub-mitted insurance claims supported byfalsified chiropractic treatment recordsand diagnostic testing results, resultingin the carriers paying over $430,000 fornon-existent treatments and services.The case is pending trial.

Dishonest insurance brokers alsokept OIFP-Criminal busy in 2003. InState v. Robert Massa, the defendant,an insurance agent, was sentenced toa five year jail term for his role in acomplex scheme to fraudulently obtaininsurance premium finance monies inexcess of $5 million from various fi-nance companies. In State v. DouglasRoss, the defendant stole over$140,000 of his clients’ insurance pre-miums. Ross pled guilty and was sen-tenced to probation but also served396 days in jail for his crimes. In Statev. Odell Coleman, the defendant wassentenced to four years in State prisonfor stealing more than $100,000 in in-

surance premium money from an elderlyclient. In State v. Robinson Barleycorn,the defendant pled guilty to the theft ofmore than $300,000 in insurance premi-ums from his client, a tugboat company.Barleycorn was sentenced to probationbut also served ten months in jail for thetheft. In State v. Harry DelBosco, the de-fendant pled guilty to the theft of$887,000 of his clients’ insurance premi-ums and was sentenced to five years inState prison.

All in all, the types of cases investi-gated by OIFP-Criminal are limited onlyby the imaginations of the criminals in-volved. The case of State v. DaoudaTraore is another good example of thelengths to which a thief will go to stealinsurance proceeds. In that case, thedefendant filed claims for death benefitsof more than $400,000 under severallife insurance policies claiming thedeaths of his wife and son in a car acci-dent in Africa. To support his claim,

2003

204

14

50

100

150

200

Traore submitted hospital records,death certificates and police reports.However, an investigation revealed thedocuments were fictitious, and so, too,were his wife and son. When con-fronted, Traore admitted he created his“wife” and “son” out of whole cloth forthe sole purpose of fraudulently obtain-ing life insurance benefits. Following aninvestigation by OIFP-Criminal, Traorepled guilty to theft by deception and wassentenced to a term of probation.

These are but a few of the hundredsof successful insurance cases broughtby OIFP against insurance cheats in2003. These and many other casesbrought by OIFP in 2003 are discussedat greater length in the Insurance FraudCase Highlights Section of this Report.

Overall, 2003 was an unequivocalsuccess for OIFP-Criminal, with in-creases over previous years across theboard, from the number of indictmentsreturned, to the number of defendants

charged and convicted, to the amount ofrestitution recovered for the victims of in-surance fraud and related crimes. Thistrend is expected to continue, leading tosimilarly stellar results, based on the tire-less efforts of OIFP-Criminal investigatorsand attorneys, and the ofttimes seem-ingly endless parade of greedy and cor-rupt defendants which OIFP doggedlypursues.

Michael A. Monahan is a Deputy AttorneyGeneral in the Office of the Insurance FraudProsecutor where he has served as the As-sistant Section Chief of the Auto Fraud Sec-tion since 1999. He previously served as anAssistant Prosecutor with the Union CountyProsecutor’s Office for seven years.

Individuals Charged Criminally By Indictment or Accusation

Year

1999 2000 2001 2002

134

86118

225

Nu

mb

er o

f In

div

idu

als

Ch

arg

ed 337

2003

15

50

150

250

OIFP Prosecutions Prove CorruptingOIFP Prosecutions Prove CorruptingOIFP Prosecutions Prove CorruptingOIFP Prosecutions Prove CorruptingOIFP Prosecutions Prove CorruptingInfluence of “Runners” on Health Care SystemInfluence of “Runners” on Health Care SystemInfluence of “Runners” on Health Care SystemInfluence of “Runners” on Health Care SystemInfluence of “Runners” on Health Care System

OIFP’s

Prosecutions Prove

Corrupting Influence

of “Runners”

on Health Care System

Since your automobile accidentlast month, you have been treating witha medical provider around the cornerfrom your home. While you are waitingto be taken back to a treatment room,the provider’s phone rings and youoverhear an exchange between theprovider and a woman on the otherend of a speaker phone:

Woman:We’re playing phone tag.

Doctor:Listen, why don’t you send that patientin and I’ll talk to you later in person.

Woman:Okay, my love.

Doctor:I’ll definitely be in.

Woman:I’m sending two in, ok?

Doctor:Oh, you’re a sweetheart.

Woman:Ok.

Doctor:Thank you very much for thinkingabout us.

As your treatment concludes andyou leave the provider’s office, awoman, whom you assume to be an-other patient, is entering the office. Yougo about your business for the rest ofthe day, and don’t give a secondthought to either the odd snippet ofconversation you overheard or to theperson who entered the provider’s of-fice as you departed.

Unbeknownst to you, however, thewoman who entered the provider’s of-fice as you left, is the same personwhose voice was on the other end of

by by by by by John JJohn JJohn JJohn JJohn J. Smith. Smith. Smith. Smith. Smith, Jr, Jr, Jr, Jr, Jr.....

17


the speaker phone as you awaitedtreatment. Now, in your absence, theirconversation continues:

Woman:How you doing, sweetheart?

Doctor:I thought you lost me and didn’t loveme anymore.

Woman:How are things? Good?

Doctor:How you doing? You look good. Thankyou for referring those patients in. I ap-preciate that. Were they both in thesame accident or separate ones?

Woman:No, same one.

Doctor:We can send them to an attorney,alright?..Just give me a couple ofweeks and I will...

Woman:Even with the attorney?

Doctor:Even with the attorney. It’s different, it’sdifferent, it’s different with all the pre-cert [Pre-Certifications]...So I owe youtwo and?

Woman:No, you said to me three, you were go-ing [to] give me one and two later.

Doctor:It’s two fifty, that’s all I have in mypocket right now.

Woman:You owe me!

Doctor:I owe you fifty...

Woman:Ok, you owe me fifty and three fifty foreach of the guys...

Doctor:Three fifty each?

Woman:Yep.

Doctor:First of all V. is not coming in.

Woman:M. said Friday was the last day hecame in.

Doctor:Yeah, he came. He says there’s noth-ing wrong. We can’t, we can’t do it.We’ll end up in jail if we do. The newdays with insurance companies, tellsus, they say, what’s wrong with the pa-tient. The patient says there is nothingwrong with them. We don’t, we can’t,we can’t do that.

Woman:And he’s saying there is nothing wrongwith him?

Doctor:Yeah, he hasn’t been in here since. Hecame in four times; he came in tentimes and he has not been here since,since last month. I can’t, I’m gonnalose money on that. There’s no way hemakes three fifty on that. The other onelooks good, coming in frequently, buthe’s on vacation in Puerto Rico.

Woman:Let me ask you something, suppose Italk to V.?

Doctor:It’s not gonna work, you see, it’sthe new stuff, the new stuff. It’s notlike usual.

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Woman:No, I know. I know.

Doctor:Before you just walk in, write yourname, and get out. Now it’s all pre-certification. The insurance companiesinvestigate everything. They spend alot of money, the doctors examine ev-ery patient...But, you know, I tell thedoctor whatever the patient says that’sit. I try not to treat the patient anymoreif he says there’s nothing wrong withhim. You know why?

Woman:I know, my doctor used to tell me,“Hey, he said nothing hurts.” I said, “I’lltake care of him.”

Doctor:I don’t want my name on the front pageof The Star Ledger and that’s what’sgonna happen now. They call it fraud.Fraud is very serious and you knowwhat, when the f___ing police comethrough the f___ing door, he’ll be talkinglike a parrot about you and me.

Woman:Who?

Doctor:If somebody, if the police come throughthe door and they say, “Listen you’recoming in here and saying there’s noth-ing wrong with you, why you treating?”

Woman:There’s no way of getting?

Doctor:There’s no f___ing way! And I don’twant it. I don’t want them in my door. Ican’t treat someone if there is nothingwrong with them.

Woman:Que stupido, uh! How the hell does heexpect to get a lawsuit? Stupid.

Doctor:But listen, I can’t give you three fifty forevery f___ing patient, you knowthat?...When he comes back the nexttime, the insurance companies, we tryto get them in two times a week, actu-ally, yeah, the insurance company willtreat him one more time and that’s it.As per...they tell us how to treat themand we can’t. We have to pretend ev-erybody is an investigator that walksthrough the door.

Woman:Oh, yeah, definitely.

Doctor:...Before, before I made money. Nowwe’re just trying to make things work;we’re just trying to pay bills. It’s differ-ent, it’s different.

Woman:Ok...

Doctor:And I have other doctors too, thatwe have...

Woman:If V. come in, just discharge him, if hecomes in the next time.

Doctor:J.’s good, we keep going withJ. J.’s good...

Woman:Ok.

Doctor:Yeah, we got to do it...cause we’regonna be in business here and we’regonna be talking ten years time, youand me, you know that?

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Woman:I hope so.

Doctor:Yeah, you got any more juicy stuff forme?

Woman:No, I was gonna say, why don’t youstop the guy that you saw had an acci-dent today. Can you do that?

Doctor:He spun off the road. I was doing 70miles an hour, spun off, you know, theygot a big divider like this, but it’s allwoods.

Woman:Where were you?

Doctor:I was on 78 coming eastbound, wayout. There were cops everywhere.

Woman:Oh no, no, no. You can’t.

Doctor:Yeah, if it was local, I’d get out of thecar, sure.

Woman:(Laughing)

Doctor:Are you kidding me, it’s an opportunity,soliciting business, but you know it’snot really bad. No, I don’t think it is, isit? That’s probably legal?

Woman:Yeah, I know. They always used to dothat, that’s the way they have thesepeople out there. They have themstanding in front of the house, “Hey,you injured? I got a doctor for you.”(Laughing)

Doctor:I know.

Woman:Well, let me see what comes up.

Doctor:The secret is to stay on top of it beforeyou can say, “I gave you a name.”Now you have to stay on top of theseson of bitches, “that’s my job right now,I’m here, they treat the patients, do thepaperwork, I’m making sure they doeverything per...”

Woman:By the book.

Doctor:By the book, ‘cause if they don’t...theycome in once in a while, insurancecompanies will not pay. I could treatthem forever, we’re not getting paid...You got more for me?

Woman:Yeah, this is the situation...This is thecar number one and happens to be thesame last name of the other driver. Itmay seem they’re all the same family,but they’re not family, Ok?

Doctor:That could be suspicious! ... Theycould investigate this! ... I’ll tell youwhat, I’ll take it only if an attorney willtake it ... That’s two and a half, that’sfor...

Woman:Two and a half? It was three and ahalf. What’s up?

Doctor:No, it’s two and a half.

Woman:No, no, no. This is what you did to melast time.

Doctor:For K.H., alright, I’ll give you three.

Woman:That’s what you did to me last time.

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You knocked me down.

Doctor:No, I give everybody the same price ...Tomorrow I got lunch with this girl, she’san attorney, and I’ll send her that pa-tient. She’s a good attorney, she fightslike a dog.

By now, it is obvious that thewoman whom you assumed to be a pa-tient did not come to the provider’s of-fice simply because her back was ach-ing. Rather, she is working for yourmedical provider. She is what is knownin law enforcement and insurancecircles as a “runner.” In return for an il-legal kickback or “referral fee,” she pro-cures people who are injured, or pur-portedly injured, in an accident, as pa-tients for medical providers oras clients for lawyers who representinjury claimants.

While you mistakenly assumed thewoman to be a patient of your medicalprovider, the medical provider was alsomistaken. The woman he believed wasa “runner,” was actually cooperatingwith the Office of the Insurance FraudProsecutor (OIFP) in an undercover in-surance fraud investigation. And theconversations to which you have justbeen privy were taken directly from atranscription of those conversations,which were secretly recorded by OIFPinvestigators.

It may surprise you to learn that themedical provider in this case considerspatient “J” to be a good patient, not be-cause he is responding well to therapy,but because he keeps returning fortreatments. It may surprise you to hearyour medical provider say he “tries” notto treat patients anymore if they saythey are not really injured and do notreally need to be treated. Perhaps hear-ing a medical provider say this causesyou to wonder whether some patientsmight even lie about their injuries?

Perhaps you wonder whether “run-ners,” medical providers, and lawyers

ever pretend not to know a patient or cli-ent may be lying about his injuries, orabout continuing to need medical care,so they can submit insurance claims?Perhaps it surprises you to hear themedical provider in this case say hewould not take a case unless an attor-ney also took it? Can it possibly bethat the provider believes the lawyer ismore capable of diagnosing a patient’sinjuries than the provider himself?

It may come as a surprise to youthat the medical provider and the “run-ner” discuss how much money the pro-vider is willing to pay to “buy” a patient.It may surprise you to learn that theprovider is worried about being investi-gated for fraud. And it may surpriseyou to learn that the provider and the“runner” discuss lawsuits, attorneys,the number of times a patient can betreated, and whether an insurancecompany will pay for those treatments.

It may also surprise you to learnthat the medical provider considers thepayments he gives to the “runner,”whether $200, $250, $300, $350, ormore, to be part of his overhead, hiscost of “doing business.” Might thismedical provider be thinking about hisincreasing overhead costs when decid-ing whether you should receive addi-tional treatment or medical supplies, orwhen he is preparing bills to submit toyour insurance company for payment?

When they study “tort” law, the lawthat governs automobile accident inju-ries and other types of negligent or in-tentional wrongs, law students aretaught that, “for every injury there is aremedy,” a right to a lawsuit. Similarly,there are some in New Jersey who be-lieve that “runners” perform a valuablepublic service by simply advisingpeople of their “rights.” There arethose who believe that “runners” dolittle more than advise people of theirright to receive treatment paid by insur-ance proceeds and to file a lawsuit for“pain and suffering” following an auto-

21


mobile accident. However, OIFP’s experi-ence investigating and prosecuting “run-ners” suggests otherwise. OIFP’s experi-ence suggests that “runners” do far morethan merely advise people of their “rights.”

In New Jersey, “runners” commonlycommit serious crimes. Among thecrimes which “runners” in New Jerseycommit are:– paying bribes to police officers towrite phony police reports;– paying bribes to police officers to expe-dite police reports so the “runners” canquickly “recruit” people to become clients,patients, and insurance claimants;– falsely adding people’s names to po-lice reports and other records to reflectthat they were involved in an automobileaccident when, in fact, they were not;– paying people to purposely cause, orbecome involved in real or fictitious autoaccidents so they can treat and thensubmit phony insurance claims;– intentionally causing real automobileaccidents so as to ensure a steadystream of clients, patients, and insur-ance claimants;– staging fictitious automobile accidentsby reporting them to police asif they actually occurred, and by plac-ing broken automobile parts on thestreet to make it appear as if anaccident occurred;– pressuring medical providers and law-yers by promising that, for a fee, theycan produce a steady stream of clients,patients, and insuranceclaimants; and– enticing people, who otherwise are notinclined to treat for minor injuries, to lieabout their injuries, to treat for them, toconsult with lawyers, to submit insur-ance Personal Injury Protection (PIP)claims, and to file lawsuits.In perhaps one of the most shockingprosecutions involving “running” to date,a young man, who was not even a li-

censed chiropractor, owned, operatedand controlled a string of New Jerseychiropractic clinics and employed thechiropractors who worked in the clinics.He allegedly also employed “runners”whom he paid to stage fictitious acci-dents, as well as real accidents, by ac-tually crashing cars into innocent, un-suspecting drivers. His “runners” also re-cruited persons, including children, to beoccupants of those cars, in order to pro-duce a steady stream of patients for hischiropractic clinics. Automobile insur-ance companies were billed millions ofdollars in claims through this illicit enter-prise. As a result of OIFP’s investiga-tion, however, he was eventually chargedwith a number of crimes, including rack-eteering and is awaiting trial.

It may also come as something of asurprise to learn that “runners” in NewJersey come from all walks of life. Theyare police officers and dispatchers, doc-tors and their office managers, private in-vestigators, disbarred lawyers, ambu-lance drivers and other providers of medi-cal transportation, and owners of medi-cal supply businesses. Then, there arethe others, those who engage in noother known occupation, trade, or pro-fession other than that of being a “run-ner.” Many “runners” manage to developsignificant “tax free” income by simplyensuring that attorneys and doctors havean endless stream of clients and pa-tients covered by automobile insurance.Many “runners” even go so far as to ob-tain automobile insurance for those theyrecruit as patients and clients.

Other states have attempted topass legislation outlawing “running,” al-beit unsuccessfully. In Pennsylvania,lawyers were prohibited from paying re-ferral fees for clients, but the Pennsyl-vania Supreme Court ruled that, be-cause only the Pennsylvania SupremeCourt has the legal authority to regu-late the conduct of attorneys in theCommonwealth of Pennsylvania, the

22

Pennsylvania Legislature could not con-stitutionally pass a statute prohibitinglawyers from engaging in conduct whichwas tantamount to “running.”

In Florida, a “runners” statute out-lawing such conduct was declared un-constitutional because the statute didnot require proof that the fraudulentclaims were submitted in connectionwith the conduct constituting “running.”Other states have attempted to regu-late “running” by prohibiting the con-tacting of a prospective client, patient,or insurance claimant within a certainspecified time period after the occur-rence of an accident.

On July 12, 1999, the New JerseyLegislature addressed the seriousproblem of “running” and the adverseimpact it has on the State’s insuredsand insurers by passing the “CriminalUse of Runners” statute. In New Jer-sey, it is now a crime for a person, for apecuniary benefit, to procure or attemptto procure, a client, patient, or cus-tomer at the direction of, request of, orin cooperation with an attorney, healthcare professional, owner or operator ofa health care practice or facility, if thepurpose is to seek to obtain benefitsunder a contract of insurance or to as-sert a claim against an insured or aninsurance carrier for providing profes-sional services to the client, patient, orcustomer. The statute does, however,provide exceptions for authorized pub-lic advertising and for referrals other-wise authorized by law.

In contrast to the manner in whichFlorida attempted to prohibit thescourge of “running,” the New JerseyLegislature unequivocally declared thatthe crime of “running” is complete, inand of itself, when there is proof be-yond a reasonable doubt that a personknowingly acts as a “runner,” or uses,solicits, directs, hires or employs an-other to act as a “runner.” In New Jer-sey, additional proof of fraud, theft,forgery or similar criminal conduct, or of

a violation of a professional code of eth-ics is not required to prove the crime ofcriminal use of “runners.”

Though the Legislature did not spe-cifically so state when it passed the“Criminal Use of Runners” statute, thepolicy reasons underlying the “runners”statute are evident. Billions of dollars arespent each year on health care, includ-

On July 12, 1999, the New Jersey LOn July 12, 1999, the New Jersey LOn July 12, 1999, the New Jersey LOn July 12, 1999, the New Jersey LOn July 12, 1999, the New Jersey Legislature addressedegislature addressedegislature addressedegislature addressedegislature addressed

the serious problem of “the serious problem of “the serious problem of “the serious problem of “the serious problem of “running” and the adverse impact itrunning” and the adverse impact itrunning” and the adverse impact itrunning” and the adverse impact itrunning” and the adverse impact it

has on the State’s insureds and insurers by passing thehas on the State’s insureds and insurers by passing thehas on the State’s insureds and insurers by passing thehas on the State’s insureds and insurers by passing thehas on the State’s insureds and insurers by passing the

“Criminal Use of R“Criminal Use of R“Criminal Use of R“Criminal Use of R“Criminal Use of Runners” statute.unners” statute.unners” statute.unners” statute.unners” statute.

ing both general health insurance andthe Personal Injury Protection (PIP) in-surance coverage provided by automo-bile insurance policies to cover thecosts of treatment for those injured inautomobile accidents. It has been esti-mated that at least ten percent ofthese costs can be attributed to fraud.Many of those in the insurance industrywho are familiar with the problem be-lieve that the amount attributable tofraud is far greater.

That the criminal use of “runners”by medical providers and other profes-sionals leads to insurance fraud is unde-niable. More often than not, in its variousmanifestations, it results inoverutilization of insurance benefits, in-cluding the ordering of unnecessary di-

23


agnostic tests and courses of treatmentof questionable medical validity, billingfor professional medical services not ren-dered, and billing for more expensiveprofessional medical services than thoseactually rendered, to mention but a few.

Among the more egregious types offraud engendered by the use of “runners”are the staging of car accidents to cre-ate and maintain a ready pool of personsto become clients, patients, customers,and insurance claimants; the fabricationof “paper automobile accidents” by falsi-fying police accident reports; and thepayment of bribes to police officers, po-lice dispatchers, and other public offi-cials to procure automobile accident re-ports as quickly as possible to recruitthose listed in the reports as clients, pa-tients, customers, and insurance claim-ants.

The integrity of the insurance deliv-ery system requires that the profes-sional judgments of doctors and law-yers remain trustworthy and impervi-ous to corrupting outside influences.The offering of a pecuniary benefit to a“runner,” however, or the receiving of apecuniary benefit by a “runner” to so-licit prospective clients, patients, cus-tomers, or insurance claimants, adds“overhead” costs and provides a finan-cial incentive in connection with ahealth insurance and personal injuryinsurance transaction that corrupts theprofessional judgment of providers.

The financial incentives paid to,or received by, “runners” often ulti-mately induce people who are not in-jured, or who are only slightly injured,to seek costly medical treatmentwhen they would not have otherwisebeen inclined to do so. These cor-rupting financial incentives also fre-quently induce “runners” to engage infraudulent conduct such as payingbribes, paying people to participate instaged or fictitious accidents, and, insome cases, causing automobile ac-cidents by dangerous and reckless

driving that endangers innocent andunsuspecting motorists.

While many licensed providers, in-cluding attorneys, are subject to a codeof ethics which limits or restricts profes-sional relationships with “runners,”other professional providers are notsubject to any professional code of eth-ics that would prohibit, limit, or other-wise restrict them from working with“runners.” Indeed, “runners” are oftennot licensed professionals, them-selves, and, thus, are not subject toany code of professional ethics.

By enacting legislationcriminalizing the use of “runners,” theNew Jersey Legislature has enabled amore effective prosecution of criminallyculpable persons who act as “runners,”and of medical providers or others whouse “runners” in connection with theirprofessional practices. Greatly empow-ered by the law against using “run-ners,” in 2003, OIFP returned indict-ments charging numerous personswith “running,” as well as with the re-lated criminal conduct which is so fre-quently tied to “running,” such as thestaging of automobile accidents andthe filing of fraudulent PIP claims. Per-haps most importantly, in 2003, OIFPobtained convictions and prison sen-tences for persons who engaged in“running” and related criminal activities.These cases and others are detailed inthe Insurance Fraud Case HighlightsSection of this Report.

John J. Smith, Jr. is the First AssistantInsurance Fraud Prosecutor and assiststhe Insurance Fraud Prosecutor with allfacets of the Office’s operations includingits investigations, criminal prosecutionsand civil litigation. He is a 19 yearveteran prosecutor with the Divisionof Criminal Justice.

24

Pharmacy Scams BustedPharmacy Scams BustedPharmacy Scams BustedPharmacy Scams BustedPharmacy Scams Busted

26

PharmacyScams Bustedby OIFP’sMedicaid Fraud

SectionThe Medicaid Fraud Section of the

Office of the Insurance Fraud Prosecu-tor (OIFP) counted numerous crookedpharmacists among those it success-fully investigated and prosecuted in2003. It also successfully targeted avariety of other scams perpetrated bydishonest providers of medical goodsand services to bilk our State’s Medic-aid Program of hundreds of millions ofdollars. Because losses to the Programresulting from such scams are ulti-mately paid by taxpayer dollars, thesefraud artists “pick our pockets” everytime they succeed in obtaining reim-bursement for a phony bill.

The New Jersey Medicaid Programcontracts with five Managed Care Or-ganizations (MCOs) to provide Medic-aid benefits to beneficiaries living incertain geographical areas and is re-quired to provide the same level of ser-vice of care, including pharmaceuticalproducts, that the Medicaid fee-for-ser-vice program provides. The State pays

the MCOs a negotiated amount foreach beneficiary each month called a“capitation rate.” The MCOs providemost pharmaceutical products as partof the capitation rate. However, expen-sive drugs are excluded, or carved out,of the capitation rate and the Statepays the MCO the equivalent of thefee-for-service costs.

OIFP’s Medicaid Fraud Sectionhas responsibility for investigating andprosecuting all types of fraud againstthe Medicaid Program. Of the manytypes of fraud that people try to commitagainst New Jersey’s Medicaid Pro-gram, frauds involving prescriptiondrugs are among the most commonand costly. Pharmaceutical costs to theNew Jersey Medicaid Program ex-ceeded $738,000,000 in 2002. WhileCongress hotly debated extending pre-scription drug benefits to Medicarebeneficiaries over the past year, theMedicaid Fraud Section of OIFP wasactively engaged in combating all man-

by John Krayniakby John Krayniakby John Krayniakby John Krayniakby John Krayniak

27


ners of fraud involving pharmaceuticalproducts. In 2003, the Medicaid FraudSection routinely encountered pharma-cists who scheme to steal from theMedicaid Program in a variety of ways.

Some of the scams crooked phar-macists, in particular, have attempted,include billing for “refills” of prescrip-tions which patients have not refilled,billing Medicaid for phony, fictitious orforged prescriptions never ordered byany physician, billing Medicaid for thefull cost of prescription drugs pur-chased by pharmacists on the “blackmarket” for far less than their fair mar-ket value, billing for unfilled or aban-doned prescriptions, and billing forextemely costly prescription medicineswhich are not medically warranted.

The Medicaid Fraud Section’s en-forcement efforts in 2003 included ac-tions against pharmaceutical manufac-turers, retail pharmacies and registeredpharmacists and individuals who usedMedicaid cards to pay for expensive

medications on forged prescriptions.These efforts resulted in the recoveryof $6,017,371, the conviction of sevenindividuals, including three registeredpharmacists, and the imposition of sen-tences which included two commit-ments to State prison. Two of the threeregistered pharmacists who were con-victed also lost their pharmacist li-censes for a minimum period of oneyear at the time of sentencing andeach was referred to the Board ofPharmacy for further licensing action.

In one of the most significant crimi-nal court decisions of 2003, NewJersey’s Appellate Court upheld the con-viction and jail sentence of MohammadSaleem Malik, the mastermind of a Med-icaid kickback scheme. Ruling in favor ofthe State, the Court held that NewJersey’s corporate misconduct statute,N.J.S.A. 2C:21-9c, applied to Malik’smisdeeds when he used Venditti Labora-tory, a corporation, to pay co-conspira-tors more than $300,000 in kickbacks to

secure lab billings from the MedicaidProgram worth more than $1,000,000.Malik had been sentenced to five yearsin State prison for the scam.

The following cases illustratesome of the Medicaid FraudSection’s enforcement efforts in2003 addressing frauds by phar-macists, or involving overbillingfor prescription drugs:Steven Aberbach, a registered phar-macist and owner of the SpringfieldPharmacy in Union County, pled guiltyin December to committing health careclaims fraud by billing Medicaid for pre-scriptions he did not dispense to Medic-aid beneficiaries. Aberbach also ex-ecuted a Consent Order pursuant towhich he agreed to pay $100,000 in res-titution and a $100,000 false claims pen-alty to the Medicaid Program. He alsosurrendered his license as a RegisteredPharmacist and was debarred as a Med-icaid provider for 12 years. He wasscheduled for sentencing early in 2004.

Kwadwo Osei Agyemang, a regis-tered pharmacist, was sentenced totwo years probation and ordered to pay$27,000 in restitution and an additional$27,000 in penalties to the MedicaidProgram. Agyemang was also de-barred from the Medicaid Program fora minimum period of five years.Agyemang was the owner and regis-tered pharmacist in charge of VictoryPharmacy in Newark, New Jersey. Headmitted that he billed the MedicaidProgram for prescription drugs thatwere not dispensed.

Registered pharmacist, Jennifer Kim,the owner of Medicine Shop Pharmacylocated in North Arlington, pled guilty toone count of Medicaid fraud. She ad-mitted that she defrauded the MedicaidProgram of over $16,000 by billing forprescriptions that were never filled andnever dispensed to Medicaid beneficia-ries. She was sentenced to a term ofprobation and ordered to make restitu-

Springfield Pharmacy was used by its owner to bilk theMedicaid Program through false prescription billings.

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Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?tion to the Medicaid Program. Her li-cense as a registered pharmacist wasalso suspended.

Adebowale Oyenusi, a registeredpharmacist who was the president andsole owner of Quickscript Pharmacy inEast Orange, was found guilty of theftby deception and Medicaid fraud by anEssex County jury. The evidence pre-sented at trial showed he defraudedthe Medicaid Program of more than$167,000 by submitting claims to theMedicaid Program for prescriptions heknew were forged. The corporate de-fendant, Quickscript Pharmacy, wasalso found guilty of theft by deceptionand Medicaid fraud. Sentencing ispending for both defendants.

Matthew Faenza, a registered phar-macist and the owner of McDermott’sPharmacy in Paterson, was sentencedto four years in State prison. This fol-lowed his guilty plea to an Accusationwhich charged him with one count ofhealth care claims fraud. He admittedbilling the Medicaid Program for dis-pensing an expensive anti-AIDS medi-cation, Serostim, to Medicaid benefi-ciaries when, in fact, he did not dis-pense the medications. At the time ofsentencing, Faenza paid $450,000 inrestitution to the Medicaid Program.

Michael Pacheco, a pharmacy techni-cian and employee of McDermott’sPharmacy, was sentenced to two yearsprobation following his guilty plea to anaccusation charging him with Medicaidfraud. He admitted he assisted hisemployer, Matthew Faenza, in submit-ting claims for prescriptions that werenot dispensed.

The State Grand Jury returned an in-dictment charging Shahid Khawaja,Dr. Axat Jani, Milton Barasch, a reg-istered pharmacist, and Azam Khanwith conspiracy and theft by deceptionfor their submission of more than$293,815 in false claims to the Medic-

aid Program. All of the defendants havepled guilty with the exception ofKhawaja, who is pending trial.

Milton Barasch, a registered pharma-cist, pled guilty to one count of an in-dictment which charged him withhealth care claims fraud. He admittedthat while employed as a pharmacist atS. Brothers Pharmacy in Newark, NewJersey, he facilitated others in submit-ting claims to the Medicaid Programthat were based on forged prescrip-tions. His sentencing is pending.

Azam Khan, an employee of S. Broth-ers Pharmacy in Newark, New Jersey,pled guilty to one count of an indictmentwhich charged him with health careclaims fraud. He admitted that he par-ticipated in a scheme to submit claimsto the Medicaid Program that werebased on forged prescriptions. Hissentence is pending. Both he and

Pharmacy shelves labeled as evidence by OIFP StateInvestigators in a criminal investigation.

29


Milton Barasch admitted that they billedthe Medicaid Program for more than$293,815 for medications that were notdispensed.

Dr. Axat Jani pled guilty to one countof an indictment charging him withhealth care claims fraud. He had beencharged along with Milton Barasch,Azam Khan and Shahid Khawaja, theowner of S. Brothers Pharmacy. At hisguilty plea hearing, Jani admitted thathe wrote false prescriptions in thenames of Medicaid beneficiaries whohad visited his clinic in Newark. Hesold those prescriptions and the Medic-aid beneficiaries’ identification num-bers to Khawaja and Barasch. His sen-tencing is pending.

A registered pharmacist, KennethHorowitz, pled guilty to an accusationwhich charged him with Medicaidfraud. He admitted that he and anotherregistered pharmacist, Nino Paradiso,the owner of Singac Pharmacy andSurgical Supply, submitted more than$35,000 in false claims to the MedicaidProgram. His sentencing is pending.

The State Grand Jury returned an in-dictment charging Nino Paradiso, aregistered pharmacist and the owner ofSingac Pharmacy and Surgical Supply,with health care claims fraud and Med-icaid fraud. It was alleged thatParadiso and his co-conspirator,Horowitz, submitted 103 false claims tothe Medicaid Program and received$35,000 they were not entitled to.Paradiso and Singac Pharmacy’s trialsare pending.

A corporate defendant, RX Pharmacy,Inc., formerly located in Jersey City,pled guilty to a one count Accusationwhich charged the corporation withMedicaid fraud. At the guilty plea hear-ing, a corporate representative admit-ted that false claims totaling morethan $18,506 were submitted throughRX to the Medicaid Program.

The State Grand Jury returned an in-dictment which charged MichaelStavitski, a registered pharmacist, withsubmitting more than $1.3 million infalse claims to the Medicaid Program.The State Grand Jury also charged fourcorporate defendants, pharmacies thatStavitski owned. They are Belmar Home-town Pharmacy in Belmar, Wall Phar-macy in Wall Township, Avon Phar-macy in Avon by the Sea, and SpringLake Heights Pharmacy in Spring LakeHeights. Stavitski and the other defen-dants pled guilty to second degreehealth care claims fraud.

Howard Williams III of Jersey City wassentenced to four years in State prisonand ordered to pay $75,388 in restitu-tion to the Medicaid Program. He admit-ted that he submitted forged prescrip-tions to several Hudson County phar-macies using other persons’ Medicaidcards and received expensive medica-tions which he sold on the street.

Other examples of remedial ac-tions undertaken by OIFP’s Medic-aid Fraud Section in 2003 includedcases where:The Medicaid Fraud Section partici-pated in a multi-state and federalsettlement with Pfizer, Inc. Our Statereceived $1.2 million dollars based ona violation of the “best price” require-ment of the federal Medicaid drug re-bate statute. Pfizer’s liability was basedon its acquisition of Warner-Lambert,the developer of Lipitor. The violationsoccurred prior to Pfizer’s purchase ofWarner-Lambert.

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Health Insurance Fraud?Health Insurance Fraud?Health Insurance Fraud?Health Insurance Fraud?Health Insurance Fraud?

John Krayniak is a 16 year veteran ofthe Division of Criminal Justice and hasbeen the Supervising Deputy AttorneyGeneral of OIFP’s Medicaid Fraud Sec-tion for ten years. He previously servedfor eight years as a Deputy District Attor-ney in the Los Angeles County DistrictAttorney’s Office.

The Medicaid Fraud Section participatedin a national settlement with Lifescan,Inc. Lifescan manufactures and sellsblood glucose monitors and test strips.Food and Drug Administration statuteswere violated by Lifescan through themarketing of an adulterated and mis-branded medical device. Our State re-covered $293,282.40 in restitution andfalse claims penalties.

Additional case summaries in-volving criminal prosections andcivil lawsuits undertaken by theMedicaid Fraud Section in 2003 areset forth in the Case Highlights Sec-tion of this report.

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OIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International AcclaimOIFP Draws International Acclaim

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OIFPDrawsInternationalAcclaim

New Jersey’s Office of the Insur-ance Fraud Prosecutor (OIFP) has,since its birth as a fraud fightingagency in 1998, emerged as an inter-national leader in the war on insurancefraud. From its founding by the NewJersey Legislature only five years agoto serve as the State’s designatedleader in fighting insurance fraud, OIFPhas rapidly evolved from a fledglingagency faced with the daunting chal-lenge of addressing New Jersey’s in-surance fraud problems to a highlyspecialized law enforcement agency,recognized and emulated as a modelfor fighting insurance fraud, not only inthe United States but throughout theworld. As a result, OIFP has been so-licited for guidance and input fromother fraud fighting agencies, both hereand abroad, and has been highlypraised for its innovative efforts in NewJersey to combat insurance fraud atevery level and on every front.

In recognition of OIFP’s successes

and its role as a national leader inAmerica’s war on insurance fraud,OIFP’s Insurance Fraud Prosecutor wasinvited to deliver a keynote address tothe Asia-Pacific Fraud Conference inAustralia in September of 2003, whereshe also led a workshop addressinghealth care fraud and conferred with in-ternational insurance industry officialsregarding OIFP’s programs and initia-tives. Following her appearance in Aus-tralia, the Insurance Fraud Prosecutorand OIFP were the featured cover storyof the Fraud International magazine,which reaches readers throughout theUnited States, Europe, Asia, the MiddleEast and Australia.

Upon her return from Australia,during the first week of October, the In-surance Fraud Prosecutor headedNew Jersey’s Sixth Annual InsuranceFraud Summit of insurance industry,law enforcement and government ex-ecutives, where OIFP’s record of suc-cess in 2003 was similarly recognized

by Stephen Dby Stephen Dby Stephen Dby Stephen Dby Stephen D. Moore. Moore. Moore. Moore. Moore

33


by fraud fighting officials from such na-tional organizations in the UnitedStates as the Coalition Against Insur-ance Fraud (CAIF) and the NationalHealth Care Anti-Fraud Association(NHCAA). NHCAA’s Executive Direc-tor, in particular, praised OIFP as a“shining example of what can be done,not only at the state level, but at the na-tional level, to combat insurancefraud.” He also described OIFP as a“genuine national leader” in ourcountry’s war on insurance fraud andexplained that “any experienced, ob-jective person in the industry will tellyou that this is where they do it best.”The Coalition’s Executive Director alsopraised OIFP’s record of success, ex-plaining that OIFP “has shown the way”and serves as a “national model for

fighting insurance fraud,” citing OIFP’sfraud fighting statistics from its biennialstatistical reports as leading the nation.At the Summit, the Alliance of Ameri-can Insurers also recognized the “lead-ership role” assumed by OIFP in its ef-forts to fight insurance fraud and de-scribed New Jersey as “a nationalleader in fighting insurance fraud.”

Later in October, OIFP was namedas a national finalist by the Interna-tional Association of Chiefs of Police(IACP) in presenting its Excellence inCriminal Investigations Award, which itoffered jointly with ChoicePoint for thefirst time in 2003. The Award recog-nizes quality achievements in the man-agement and conduct of criminal in-vestigations and promotes the sharingof information on successful programs.

Division of Criminal Justice Chief Investigator Anne Kriegner and New Jersey InsuranceFraud Prosecutor Greta Gooden Brown attended the International Association of Chiefs of

Police awards breakfast where OIFP was named a national finalist for the Excellence inCriminal Investigations Award.

34

Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?Auto Insurance Fraud?The Award is presented to the law en-forcement agency, unit, task force orinter-agency task force which mostdemonstrates exceptional innovationand excellence in criminal investiga-tions. IACP is among the largest andmost prestigious law enforcement as-sociations in the United States, repre-senting the management of law en-forcement, and boasts more than17,000 members, including the leader-ship of most local, county, state andfederal law enforcement agencies. TheAward’s corporate sponsor,ChoicePoint, has a long record of sup-porting law enforcement through theprovision of investigative informationfrom its comprehensive databases.

Other speaking engagements in2003 similarly reflect the magnitude ofOIFP’s influence in the American fraudfighting community. The InsuranceFraud Prosecutor delivered the keynoteaddress at the May, 2003 meeting of theDelaware Valley Chapter of the Interna-tional Association of Special Investiga-tion Units. In November of 2003, OIFPwas tapped to address the InsuranceFraud Executive Council in Charleston,South Carolina, an honor bestowed byinvitation only. Among the many otherspeaking engagements of the Insur-ance Fraud Prosecutor in 2003 wereappearances before the InsuranceCouncil of New Jersey, the New JerseySpecial Investigators Association, theNew Jersey Judicial College and theNew Jersey State Bar Association.

OIFP’s Executive Staff was alsotapped during 2003. In March of 2003,OIFP’s Medicaid Fraud Section Chiefwas invited to participate in the ThirdNational Forum on Fraud and Abuse inthe Sales and Marketing of Drugs andMedical Devices sponsored by theAmerican Conference Institute.

Not surprisingly, as in years past,OIFP’s leadership in the fight againstinsurance fraud has also been evi-denced in its ability to assist other

fraud fighting programs. OIFP’s guid-ance and counsel have been sought byother law enforcement agencies, bothhere and abroad, from Hawaii to NewYork, from Australia to Columbia, andfrom points in between.

In 2003, the national and interna-tional media continued to heraldOIFP’s successes as a model for emu-lation by others fighting insurancefraud, including coverage in the FraudInternational magazine, the CoalitionAgainst Insurance Fraud’s Fraud Fo-cus, Mealey’s Litigation Report-Insur-ance Fraud, and other periodicals ofregional and national stature. OIFP’sefforts to fight insurance fraud havealso been cited as an example of effec-tive fraud fighting by at least one lead-ing college textbook, Criminology.

In recent years, OIFP’s many pro-grams have also drawn recognition

OIFP Special Assistant/Industry Liaison John Butchko receives the 2003Outstanding Service Award from the Delaware Valley Chapter of theInternational Association of Special Investigative Units. l. to r. CathyGicker, Vice President IASIU, Tom Donahue, President Delaware ValleyChapter IASIU, John Butchko, OIFP, Greta Gooden Brown, New JerseyInsurance Fraud Prosecutor.

35


Stephen D. Moore is a Supervising DeputyAttorney General with the Office of theInsurance Fraud Prosecutor, where hesupervises its Liaison Section and servesas Editor of its Annual Report. Prior tojoining OIFP in 1999, he served sevenyears as the County Prosecutor in CapeMay County.

from others in the fraud fighting commu-nity. OIFP’s Medicaid Fraud Section hasbeen nationally recognized by the fed-eral government as one of the nation’smost effective Medicaid Fraud ControlUnits. OIFP’s media campaign has beencommended for its excellence in ad-dressing insurance fraud, and OIFP’sseries of roll call training videos are con-tinuously requested by law enforcementofficials from throughout the UnitedStates.

Individual efforts of those withinOIFP were also formally acknowledgedin 2003. OIFP’s Deputy Chief of Crimi-nal Investigations was cited by theWestern New Jersey Chapter of theAmerican Society for Industrial Securityin May of 2003 for his exemplary dedi-cation to fraud investigations and thefostering of a spirit of cooperation be-tween law enforcement and the busi-ness community in New Jersey. OIFP’sInsurance Industry Liaison wasawarded the Outstanding ServiceAward by the Delaware Valley Chapterof the International Association ofSpecial Investigation Units in June of2003 for his dedication to the fightagainst insurance fraud in New Jer-sey, his sponsorship of joint trainingprograms and ongoing workinggroups with the insurance industry,and his continuing efforts to foster aneffective and mutually beneficial work-ing relationship between law enforce-

ment agencies fighting insurance fraudin New Jersey and the insurance indus-try. In October, 2003, he was also recog-nized by the New Jersey Special Investi-gators Association and awarded its 2003Annual President’s Award. In addition, in2003, the Society of Investigators ofGreater Newark (SIGN) selected anOIFP State Supervising Investigator toserve as its President.

The achievements underlyingOIFP’s unprecedented recognition bythe national and international fraudfighting community in 2003 were, per-haps, best described by the NationalSpecial Investigations Manager of a ma-jor U.S. insurance carrier, when hepraised OIFP as “the most sophisticatedprosecutorial agency in the country” inthe realm of insurance fraud.

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Insurance Reforms ToughenInsurance Reforms ToughenInsurance Reforms ToughenInsurance Reforms ToughenInsurance Reforms ToughenFraud Penalties and Give OIFP New ToolsFraud Penalties and Give OIFP New ToolsFraud Penalties and Give OIFP New ToolsFraud Penalties and Give OIFP New ToolsFraud Penalties and Give OIFP New Tools

36

Insurance

Reforms Toughen

Fraud Penalties

and Give OIFP

New Tools

by Norma R. Evansby Norma R. Evansby Norma R. Evansby Norma R. Evansby Norma R. Evans

To send a clear and unequivocalmessage to the public that, if you com-mit insurance fraud in New Jersey youwill be dealt with harshly, the New Jer-sey Governor and Legislature enacted apackage of anti-fraud reforms in 2003which address the need to enhance theState’s ability to detect insurance fraudand severely punish those who commitinsurance fraud.

By making “Insurance Fraud” aspecific crime, New Jersey will be ableto deal an even heavier blow to cheatswho perpetrate insurance scamsthroughout the State. As a result of thenew law, the Office of the InsuranceFraud Prosecutor (OIFP) has been em-powered with provisions which allowfor the imposition of far more stringentpenalties to be levied against thosewho are convicted of committing fraudas it relates to virtually every aspect ofinsurance coverage.

Perhaps the most notable aspectof this reform is that the new crime of

“Insurance Fraud” is now embedded inthe New Jersey Criminal Code. Muchlike its counterpart, the “Health CareClaims Fraud” statute enacted in 1998,the crime of Insurance Fraud allowsprosecutors to more aggressively con-front specific conduct relating to insur-ance transactions.

By virtue of the enactment of theHealth Care Claims Fraud statute, pros-ecutors were able to focus specificallyon health care providers and otherswho sought to benefit from a seeminglyendless variety of schemes to submitfraudulent claims for payment to insur-ance carriers and similar entities. Thatstatute specifically delineated differentpenalties for health care providers andothers who bilked our system of healthcare insurance. Although the HealthCare Claims Fraud Act enabled pros-ecutors to severely punish both providerand non-provider offenders, it made thepunishment for providers such as doc-tors and chiropractors even more se-

39


vere, citing the need to maintain thepublic’s trust as essential to the preser-vation of the integrity of the “safety net”provided by health insurance.

Likewise, recognizing a strongneed to directly and comprehensivelycriminalize all types of schemes tocommit insurance fraud, New Jerseycreated a new crime of “InsuranceFraud” to toughen and streamline theinvestigation and prosecution of all per-sons or entities that knowingly commit,or assist or conspire with others tocommit fraud against insurance com-panies and other entities providing in-surance-like benefits. More broad in itscoverage than that of the prior healthcare fraud legislation, the new crime of“Insurance Fraud” makes it illegal to

make false representations with respectto any claim, application, payment ordocument used in any insurance or pre-mium finance transaction, not merelythose relating to claims for health carebenefits.

Prior to the enactment of this legis-lative package, prosecutors were se-verely hamstrung in their ability to buildmajor cases against those engaged incommitting most types of insurancefraud. Unless the illicit conduct fellwithin the scope of crimes defined as“Health Care Claims Fraud,” prosecu-tors were often left with no alternativebut to prosecute the fraud as a theft bydeception, which would require thebuilding of a case based upon dozens,if not hundreds of fraudulent transac-

New Jersey GovernorJames E. McGreeveysigns one of thetoughest insurancefraud laws inthe nation.

40

tions, to establish an aggregate theft inexcess of $75,000, before a sentencerequiring incarceration could be im-posed. Preparing such a complex casewould often consume years of investi-gative work, allowing perpetrators tocontinue to fleece insurance carrierswhile investigations continued on track.

Now, by creating the crime of “In-surance Fraud,” the Legislature hasgiven prosecutors a tremendous advan-tage in fighting the war against insur-ance cheats. A wrongdoer need onlycommit five acts of fraud with an aggre-gate theft amount of $1,000 to be sub-ject to a sentence of five to ten years inthe New Jersey State prison system.The five acts, as required under thestatute, can be found in a single docu-ment, as each and every misrepresenta-tion is considered an additional, sepa-rate and distinct offense for purposesof the crime of “Insurance Fraud.” Previ-ously, a conviction for such conductwould have likely resulted in either pro-bation or admission into the Pre-TrialIntervention Program (PTI), with virtuallyno prospect for incarceration. The poten-tial for such significant penalties underthe new law will undoubtedly have astrong deterrent effect.

The new insurance fraud law also,for the first time, expressly criminalizesmisrepresentations made in applica-tions submitted to obtain various typesof insurance. Such conduct, known as“application fraud” or “premium fraud,”can now potentially result in a prisonsentence as well.

In addition to the imposition of se-vere criminal penalties, individuals whohold licenses or certificates are now re-quired to forfeit that license or certifi-cate and to be permanently barredfrom the practice of their profession oroccupation upon a second degree con-viction of Insurance or Health CareClaims Fraud. This new law has, in-deed, elevated the stakes for those li-censed professionals who are driven

by greed to cheat the system.The new law also offers added in-

centives to encourage members of thepublic to participate in the fight againstfraud by establishing, within OIFP, the“Insurance Fraud Detection Program.”Significant financial incentives havebeen provided to encourage the publicto come forward and report insurancefraud. By calling OIFP’s 24 hour toll-freehotline or visiting OIFP’s Web site at

41


www.njInsuranceFraud.org, a personwho provides information in accordancewith certain guidelines, can now receiveas much as $25,000 when that personhas a reasonable suspicion or knowl-edge that someone is committing insur-ance fraud. Consequently, everyone canplay a role in insuring that law-abidingcitizens do not pay, through their insur-ance rates, to support the ill-gotten gainsof insurance cheats.

The insurance fraud reform pack-age also includes provisions which aredesigned to discourage the use ofcounterfeit insurance identificationcards and give teeth to the require-ment that motorists possess a validmotor vehicle insurance identificationcard. To curtail the widespread pos-session and use of fraudulent insur-ance identification cards, the legisla-ture specifically mandated that theCommissioner of the Department ofBanking and Insurance promulgaterules and regulations addressing theissuance, design and content of in-surance identification cards. Theregulations under this provision of thestatute will require that insuranceidentification cards are designed sothat counterfeit or fraudulent cardsare readily detectable.

Further, under this legislation, thefailure to possess a valid insuranceidentification card will now result ineven harsher penalties than before.Not only will such a violation result in

the issuance of a summons, but now,under certain circumstances, a failureto have one’s vehicle properly insuredmay result in its impoundment, andeven forfeiture to the State.

New Jersey is, indeed, seriousabout its war on fraud. While speakingat the Sixth Annual New Jersey Insur-ance Fraud Summit in October 2003,Governor James E. McGreevey statedthat, “If you engage in insurance fraud,the State will take aggressive mea-sures.” By signing one of the toughestlaws against insurance fraud in the na-tion, the Governor has underscored theleading role assumed by OIFP as amodel for the nation in the aggressivepursuit of insurance fraud and the pun-ishment of those who commit it.

Norma R. Evans has been with NewJersey’s Division of Criminal Justice for fiveyears and currently serves as a Supervis-ing Deputy Attorney General in charge ofOIFP’s Health and Life Section. Prior to herappointment with the Division, she was anAssistant Prosecutor with the CamdenCounty Prosecutor’s Office for seven years.

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OIFP Civil Enforcement Actions PackOIFP Civil Enforcement Actions PackOIFP Civil Enforcement Actions PackOIFP Civil Enforcement Actions PackOIFP Civil Enforcement Actions Packa One – Two Punch in the Fight on Frauda One – Two Punch in the Fight on Frauda One – Two Punch in the Fight on Frauda One – Two Punch in the Fight on Frauda One – Two Punch in the Fight on Fraud

OIFP

Civil EnforcementActions Pack

a One – Two Punch

in the Fight

on Fraudby Melaine Campbellby Melaine Campbellby Melaine Campbellby Melaine Campbellby Melaine Campbell

L. C. Thomas was a licensed insur-ance agent, formerly doing business inTeaneck, New Jersey, who fraudulentlyobtained more than $1.2 million in lifeinsurance policies. Thomas admittedthat he assisted William Conyers, a li-censed funeral director who owned andoperated the Conyers Funeral Home inHackensack, and Conyers’ wife, Mollie,vice-president of Conyers FuneralHome, in falsifying several life insur-ance applications submitted to carriersfor life insurance policies. They con-cealed the fact that the insured personshad pre-existing medical conditionssuch as the AIDS virus and falsified theapplications by naming persons as ben-eficiaries who had no insurable interestin the lives of the insured persons.

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L. C. Thomas was convicted of at-tempted theft by deception and sen-tenced to probation. Both Conyerseswere also convicted of various offensesfollowing a 17-day jury trial. WilliamConyers was sentenced to 11 years inState prison and Mollie Conyers wassentenced to two years probation condi-tioned upon serving 364 days in thecounty jail. Then, the civil penalty por-tion of New Jersey’s anti-fraud insur-ance statute kicked in and L. C. Tho-mas was also fined $5,000.

Civil Actions Complementthe Criminal Prosecutions

The investigation of cases of sus-pected insurance fraud by OIFP-Civilprovides law enforcement with an in-valuable weapon in the battle againstinsurance fraud. Actions byOIFP-Civil can stand alone or cancomplement the prosecution of a crimi-nal case. In fact, most cases which re-sult in a successful criminal prosecu-tion also result in the imposition of civilpenalties under the Insurance FraudPrevention Act (Fraud Act). Since theimposition of a civil fine under theFraud Act requires the lesser “prepon-derance of the evidence” burden ofproof for civil cases, civil enforcementactions can be successfully pursued incases where criminal prosecutions arenot appropriate. Furthermore, the Stat-ute of Limitations for civil insurancefraud actions is ten years, substantiallylonger than the five year time limitwithin which most criminal prosecu-tions can be brought. Consequently,the majority of OIFP’s insurance fraudinvestigations are conducted by thecivil side of the Office.

During 2003, OIFP successfullybrought numerous civil actions in con-junction with criminal cases prosecutedby OIFP or by County Prosecutors’ Of-fices. OIFP’s Operation “Give & Go”targeted automobile “give-ups” and auto

thefts involving 46 vehicles valued at over$1 million. By the end of 2003, 38 NewJersey residents were indicted for “giv-ing-up,” or for their involvement in thetheft of late model luxury automobiles inorder to fraudulently collect insurancemonies. In addition to criminal prosecu-tion, all the defendants face substantialcivil fines.

The Fraud Act provides for fines ofup to $5,000 for a first violation, $10,000for a second violation, and $15,000 forthird and subsequent violations. Eachmisrepresentation or fraudulent omis-sion in a claim or application constitutesa separate violation of the Act, trigger-ing liability for the specified fines. In ad-dition to the imposition of civil fines,where appropriate, OIFP-Civil alsoseeks to recover restitution and attor-neys’ fees from the violator.

Civil Actions at NationwideHigh Levels in 2003

Issuance of Civil Consent Ordersare authorized under the Fraud Act afteran investigation reveals a violation ofthe Act. A Civil Consent Order repre-sents a preliminary settlement offer tothe violator providing the violator withthe earliest opportunity to voluntarilyagree to the terms of the order, the find-ings of the investigation, and the impo-sition of an agreed upon civil fine. Oth-erwise, the case is referred to civil attor-neys in the Division of Law for litigation.

OIFP-Civil imposed 4,362 Insur-ance Fraud Sanctions in 2003. This sta-tistic supports the 2003 CoalitionAgainst Insurance Fraud report whichnoted that New Jersey led all otherstates in the number of civil actionstaken against people trying to cheat thesystem. Greater emphasis on bettercivil investigations has yielded a signifi-cant increase in the per case resolutionobtained by civil attorneys in OIFP’s liti-gated cases. In 2002, the average caseresolution was $5,600. By contrast, the

46

average case in 2003 was $9,400. Thetotal number of judgments for 2003 was397, as compared to 356 in 2002.

In 2003, OIFP-Civil referred 318cases to the Division of Law for the fil-ing of civil enforcement actions stem-ming from the refusal of insurancefraud violators to either voluntarily ex-ecute consent orders or to make pay-ments on outstanding consent orders.There were 345 civil actions resolvedby the Division of Law in 2003, result-ing in the imposition of $3,133,869 inpenalties, fees and restitution.

Specialization in the FightAgainst Insurance Fraud

OIFP-Civil is divided into squadsand teams which investigate allega-tions of insurance fraud arising out ofproperty and casualty, health and life,and automobile insurance coverages.When fully staffed, 54 investigators areassigned to auto insurance fraud, 34 toproperty and casualty insurance fraud,and 43 to health and life insurancefraud investigations. In addition, 12Criminal and Civil Investigators are as-signed to supervisory positions inOIFP-Civil, while another six Civil In-vestigators perform various profes-sional support functions in OIFP-Civil,such as maintaining required data-bases, production of OIFP training vid-eos and other publications, and per-forming similar tasks requiring a highlevel of expertise. The following de-scribes each of the teams and high-lights typical cases brought by theteams throughout the year.

Auto Fraud TeamsDuring 2003, a significant number

of investigations successfully targetedvehicle owners and lessees seeking todispose of their vehicles in order to col-lect insurance proceeds and escapetheir expensive lease or loan pay-ments. These cases are commonlyknown as owner “give-ups.”

John P. Fagan, a former West Or-ange police officer, filed a false policereport with the Wayne Police. He alsofiled an Affidavit of Theft with his insur-ance company containing false andmisleading information. AlthoughFagan claimed that his vehicle hadbeen stolen, Fagan voluntarily relin-quished the car to other persons aspart of a scheme to obtain paymentfrom the insurer. Fagan pled guilty to

Reprinted with the permission of the New Jersey Lawyer, Inc., copyright 2003

47


criminal charges and executed consentorders totaling $8,000 for his part inthis “owner give-up” scheme.

Other types of automobile insur-ance fraud, such as phony and exag-gerated claims for property damage,phony claims associated with stagedaccidents, and fraudulent claims by“jump-ins” who falsely claim to havebeen injured as passengers in an auto-mobile accident when they were not in-volved at all, are also investigated.

Several individuals entered intoConsent Orders during 2003 resultingfrom their involvement in a staged acci-dent scheme. As a result of thisscheme, 28 persons were indicted oncharges that they “set-up” more than 90“staged” automobile accidents which re-sulted in 24 insurance companies pay-ing more than $2 million in fraudulentautomobile accident and personal injuryclaims. In addition to criminal penaltiesupon conviction, these individuals willface substantial civil penalties.

In addition to the civil component ofcriminal investigations, the Civil AutoFraud Teams investigate cases wherecivil fines have traditionally been levied.These cases typically involve “rate eva-sion,” where an insured misrepresentsthe garaging location of an insured ve-hicle in order to obtain a lower premiumrate or “application fraud,” where the in-sured lies on an insurance applicationsuch as misrepresenting the individualsresiding in the household who are ofdriving age, or the actual use of the ve-hicle, or fraudulently registering com-mercial vehicles as personal vehicles inorder to obtain the lower insurancerates which reflect the lower risks asso-ciated with non-commercial vehicle use.Insureds who are caught committingrate evasion or application fraud typi-cally are fined an amount which is fargreater than the savings they wouldhave enjoyed by misrepresenting theuse or drivers of their vehicles to theirinsurance companies.

Health and Life TeamsCivil Investigators conduct investi-

gations of a variety of schemes perpe-trated by both medical providers andpatients to bilk insurance companies.Frauds perpetrated by providers in-clude billing for services not rendered,misrepresenting the nature of servicesrendered in order to charge a higherfee, and “unbundling” or billing for mul-tiple services when billing for only asingle procedure is appropriate. Otherfraud perpetrated by providers may in-volve billing for services rendered be-yond the scope of a provider’s license.

OIFP-Civil imposed a $100,000civil fine against Yong Jin Kim whopracticed acupuncture without a li-cense. Kim forged the signature of hisfather, Ki Min Kim, a licensed acupunc-turist who had died, in order to renewhis father’s license to practice acu-puncture. Kim submitted claims to in-surance carriers using the name andlicense number of his deceased father.Kim was charged by the Ocean CountyProsecutor’s Office with health careclaims fraud and pled guilty.

In addition to Yong Jin Kim, an-other provider, Thomas Boselli, wasfined $100,000. Boselli had been prac-ticing chiropractic medicine for 16years without a license. An investiga-tion determined that Boselli submitted1,870 claims for 56 patients since 1995totaling more than $125,000, of whichhe was paid in excess of $54,000.Boselli fraudulently signed all the claimforms as a licensed chiropractor.

Other OIFP-Civil cases involve in-surance fraud committed by patients orpurported patients. These cases includepatients submitting fabricated bills fortreatments that were never provided orsubjects submitting bills for reimburse-ment of fraudulent prescriptions.

Patricia and Paul Sullivan werefined $25,000 for three schemes de-signed to defraud Metlife Insurance

48

Company and Blue Cross/Blue Shieldout of $48,380. The schemes includedaltering co-pays on prescription re-ceipts, seeking reimbursement forcosts not actually incurred, and seek-ing reimbursement for the full costs ofdrugs when the drugs were never actu-ally dispensed. The Sullivans werealso prosecuted criminally.

Cassandra Hankins and Jay EarlHankins defrauded MetLife InsuranceCompany. Cassandra misrepresentedherself as Jay’s ex-wife, using the ex-wife’s insurance card to obtain anabortion and dental work. Cassandraand Jay Hankins were each fined civillyin the amount of $5,000.

John Currie repeatedly misrepre-sented his inability to work, receiving$38,169 in disability benefits to whichhe was not entitled. Surveillance andemployment verification by UnumProvident SIU revealed that Currie wasemployed full time while claiming to bedisabled. Currie reimbursed Unum forthe claim and paid a $10,000 fine lev-ied by OIFP-Civil.

Property and CasualtyTeams

Cases investigated by the Propertyand Casualty Teams arise out of differ-ent types of insurance policies, includ-ing homeowners and commercial in-surance policies. Fraudulent claims un-der these policies often involve the ex-aggeration or fabrication of claimedlosses due to theft, burglary or casu-alty, or the making of multiple claimsfor a single loss. The Teams also in-vestigate instances of suspected insur-ance agent fraud which typically in-volve the embezzlement of clients’ pre-miums or the purposeful misrepresen-tation of information on insurance ap-plications in order to obtain lower rateson behalf of a client.

John P. Miller and Louise Millerfiled a fraudulent homeowners claim in

relation to a fire loss of their residence.The investigation revealed that LouiseMiller conspired with her brother-in-law, David Clark, in the arson of thehome, for the purpose of collecting in-surance benefits. John Miller becameaware of the arson after the incident,but failed to notify Ohio Casualty thatthe fire had been set intentionally. TheMillers were civilly fined $6,500 andprosecuted criminally, Louise for com-mitting arson to collect insurance, andJohn for hindering apprehension.

Fireman’s Fund Insurance Com-pany referred an allegation thatSolomon “Sammy” P. Bouzagloufalsely claimed that his inventory wasaccidently damaged by a faulty sprin-kler head, when, in fact, he had con-spired with others to purposefully de-stroy the inventory and collect the in-surance proceeds. Bouzaglou and co-conspirator, Joseph Benlolo, wereeach fined $5,000 by OIFP-Civil in ad-dition to facing criminal prosecution byOIFP-Criminal.

OIFP Civil 2003 InitiativesIn addition to investigating and de-

veloping cases referred to OIFP by in-surance carriers or citizens, OIFP-CivilInvestigators continued working in2003 on proactive initiatives to ferretout insurance fraud in its many forms.

Contractors who thought theycould beat the system by payingcheaper rates for private passengerauto insurance on their commercial ve-hicles were in for a rude awakening in2003. Civil Investigators targeted thisfraud scheme, successfully bringingactions against numerous contractors.

OIFP-Civil continued working withthe Philadelphia Fire Marshal’s Officeand other law enforcement agencies toinvestigate auto “give-ups” which havebeen found burned in Philadelphia.These cases involve New Jersey ve-hicle owners and lessees who “give-up” their cars to co-conspirators who,

for a fee, dispose of the cars by burningthem in Philadelphia. The owners or les-sees then file false insurance claims fortheft. To date, OIFP-Civil has imposedseveral civil penalties in New Jersey re-sulting from this initiative.

Throughout 2003, Civil Investiga-tors continued to develop significantcases, analyze trends, and explorenew and creative ways to combat theendemic problem of insurance fraud inNew Jersey.

Melaine Campbell is a SupervisingDeputy Attorney General and serves as aSpecial Assistant to the Insurance FraudProsecutor. She has been a prosecutingattorney for over 23 years, serving termsas an Assistant Prosecutor in HunterdonCounty and Acting County Prosecutor inSomerset County.

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OIFP Public AwarenessOIFP Public AwarenessOIFP Public AwarenessOIFP Public AwarenessOIFP Public Awareness

50

by John Butchkoby John Butchkoby John Butchkoby John Butchkoby John Butchko

OIFP Public Awareness

and Insurance Fraud

Training Programs

Spread the Word on

Insurance Fraud

From its inception in 1998, the NewJersey Office of the Insurance FraudProsecutor (OIFP) has dedicated itselfto educating and informing friend andfoe, alike, that insurance fraud is a seri-ous crime that will not be tolerated inNew Jersey. Or, as stated in OIFP’saward winning public awareness cam-paign, “New Jersey is Fed Up,” OIFP’smulti-channeled, multi-media approachto public outreach and training effortshas been a major contributing factor toOIFP’s success as an internationalleader in the war on fraud in 2003. Bydeveloping specialized fraud awarenessand training programs for the insuranceindustry, County Prosecutors and locallaw enforcement, as well as by pursuinga statewide fraud awareness programfor the general public, OIFP continuesto effectively spread the word regardingthe significant impact of insurance fraudon the residents of New Jersey, as wellas how we can each do our part instamping it out.

Industry Awareness EffortsOIFP’s multi-channeled approach

to education and training in the field ofinsurance fraud has spawned frequentopportunities for sharing New Jersey’s“zero tolerance” approach to the inves-tigation and prosecution of insurancefraud with insurance industry profes-sionals, not only locally and nationally,but throughout the world. In Septemberof 2003, New Jersey Insurance FraudProsecutor Greta Gooden Brown wasinvited to be the guest keynote speakerat the annual Asia Pacific Fraud Con-ference in Australia, where she wasjoined by members of the Federal Bu-reau of Investigation, the CoalitionAgainst Insurance Fraud, Europe Pol,and the Australian Health Insuranceand Crime Commissions to provide in-formation on effective insurance frauddetection and prosecution strategies toprofessionals from countries aroundthe Pacific Rim. Prosecutor Brown and

51


OIFP were subsequently featured on thecover of Fraud International magazine’sNovember-December issue, which citedOIFP’s successes as a model for similarfraud fighting agencies.

In 2003, OIFP also hosted, andprovided assistance to, a representa-tive of the Columbian Institute forFraud Prevention and Detection, whovisited the United States for guidanceand advice in establishing a similaragency in the country of Columbia tofight insurance fraud. Representativesof OIFP were also requested to sharetheir insurance fraud fighting expertiseas keynote speakers and lecturers atmany other insurance fraud workshopsand conferences, including the Insur-ance Fraud Managers’ Council, theDelaware Valley Chapter of the Inter-national Association of Special Investi-gative Units, the New Jersey SpecialInvestigators Association, the Insur-ance Council of New Jersey, theGreater Philadelphia Claims Associa-tion, the Health Insurance FinanceManagers Association and the CharterProperty/Casualty Underwriters ofCentral Jersey.

With the support and commitmentof the New Jersey insurance industry,in 2003, OIFP established the OIFP/In-dustry Joint Training Program, whereinsurance fraud detection and prosecu-tion techniques can be shared amongNew Jersey insurance professionals.Through the Program, OIFP has pro-vided lectures, hands-on training, andother informational presentations tonearly two thousand insurance com-pany employees in 2003, including in-surance industry producers, underwrit-ers, claims adjusters, SIU investigatorsand defense attorneys. By reaching outto every segment of the insurancecommunity, OIFP and its industry part-ners remind us all to maintain our col-lective vigilance in detecting, reportingand prosecuting insurance fraud.

These opportunities have proven to behighly beneficial in fostering the spirit ofcooperation and collaboration necessaryto successfully investigate and pros-ecute insurance fraud.

OIFP’s Liaison Section, workingwith the Division of Criminal Justice’sMedia Center, has also implemented amechanism, relying upon “broadcast”e-mails, to provide insurance industryrepresentatives with all OIFP press re-leases virtually immediately upon theirdissemination to the news media. Thisnew program to promptly inform the in-surance industry of individuals whohave been criminally charged by OIFP,or who have been convicted or sen-tenced for insurance fraud in thecourts, provides claims representativesand industry fraud investigators withtimely and invaluable informationwhich enables them, in many cases, toexpeditiously assess potential claimsexposure stemming from possible orproven insurance fraud.

Law EnforcementTraining Programs

As in past years, OIFP in 2003again provided in-service training forAssistant Prosecutors and investigativepersonnel from the 19 County Prosecu-tors’ Offices receiving insurance fraudgrants from OIFP. This annual training isdesigned to update County Prosecutorstaff assigned to handle insurance fraudcases on current and emerging insur-ance fraud issues, as well as to offerthem legal and investigative training ininsurance fraud in order to better enablethem to investigate and prosecute insur-ance fraud in their respective counties.With the assistance of OIFP’s CountyProsecutor Liaison, who served as or-ganizer and moderator, County Pros-ecutor personnel participated in the2003 13th Annual New Jersey SpecialInvestigators Association (NJSIA) Con-

52

ference. Many of those in attendancebenefited by participating as panel mem-bers or otherwise contributing to a work-shop in the form of a “County Investiga-tors Roundtable Discussion,” which pre-sented a wide variety of the most suc-cessful pro-active insurance fraud pro-grams being implemented by CountyProsecutors’ Offices from around theState.

The Insurance Fraud Prosecutorand County Prosecutor Liaison, onseveral occasions throughout the year,also made presentations directly to theState’s 21 County Prosecutors, ex-plaining in detail the operations ofOIFP, its program of insurance fraudgrants available to their respective of-fices and the Attorney General’s re-cently promulgated Guidelines for theInvestigation and Prosecution of Insur-ance Fraud. The County ProsecutorLiaison and grant experts from the Di-vision of Criminal Justice also con-ducted meetings directly with represen-tatives of County Prosecutors’ Officesto review and explain the program re-quirements of the County ProsecutorInsurance Fraud Reimbursement Pro-gram, now entering its sixth year ofproviding financial assistance toCounty Prosecutors who wish to estab-lish or augment insurance fraud unitswithin their offices.

Through its Law Enforcement Liai-son, OIFP’s law enforcement outreachefforts continued to provide insurancefraud identification training to local po-lice officers. Recognizing that the patrolofficer on the street often representsthe first line of defense against insur-ance scams such as “staged” acci-dents, fraudulent auto thefts, and falseor inflated burglary loss claims, OIFPconducts a comprehensive program ofspecialized training to both rookie andveteran police officers. For experi-enced officers, training is offered onvarying topics depending on the needs

and interests of the particular officersreceiving the training. For police re-cruits, introductory insurance fraudtraining is provided at county policetraining academies that addresses thedetection and investigation of insur-ance frauds ranging from phony insur-ance identification cards to stagedauto accidents and thefts. In 2003,OIFP conducted training for over 415police officers over the course of 16separate sessions. The OIFP’s LiaisonSection also staffed exhibit booths atthe New Jersey Police Expo held inconjunction with the annual New Jer-sey Chiefs of Police Convention in At-lantic City in June 2003, and the annualNJSIA Conference, also held in AtlanticCity later in the year. Information and otherresource materials, including brochures,manuals and OIFP produced Insur-

Joy Champion, Special Agent of the National Insurance Crime Bureau,addresses members of the OIFP Civil Investigator Academy.

53


ance Fraud Roll Call Training Videos,were made available to attendees atboth events.

In addition to its roster of training op-portunities provided to other law enforce-ment agencies, at least once a year,OIFP conducts a Basic Course for CivilInvestigators spanning several weeks, aswell as providing other in-service trainingopportunities for in-house State Investi-gators and Deputy Attorneys Generalwho investigate and prosecute OIFP’scriminal cases.

Statewide Public Anti-FraudAwareness Campaign

With the conclusion of the thirdand final phase of OIFP’s first, highlyacclaimed public awareness cam-paign, which featured television and ra-dio commercials, billboards, newspa-per advertisements and posters onNew Jersey Transit trains and buses,OIFP continued its public awarenessprogram in 2003 through additional, al-ternative channels, including the distri-bution of anti-insurance fraud postersand literature which were originally pro-duced as part of its first media cam-paign. In 2003, OIFP began developinga new media campaign which is ex-

OIFP Civil Supervisor MicheleMargiotta hands out literature at the

13th Annual New Jersey SpecialInvestigators Association

Training Conference.

54

pected to build on the success of its firsteffort. Accordingly, it is anticipated thatOIFP will launch a new public aware-ness message in 2004, which will am-plify and expand upon the message ofthe prior campaign, that insurancefraud is a serious crime that can putyou “behind bars.”

OIFP OnlineOIFP also maintains an informative

Web site, www.njInsuranceFraud.org,where, in addition to explaining OIFP’smission and offering general informationregarding insurance fraud, OIFP postsits Annual Reports to the Governor andLegislature as well as OIFP press re-leases reporting significant events inthe progress of OIFP’s cases, such asthe indictment, conviction and sentenc-ing of individuals who have committedinsurance fraud in New Jersey. TheWeb site explains the most commonlycommitted types of insurance fraud andoffers the public several means of re-porting cases of suspected insurancefraud to OIFP, including an online re-porting form and the listing of both an e-mail address and hotline phone numberstaffed by OIFP employees. The Website also enables visitors to view OIFP’smedia campaign television ads, andposts information and forms for the in-surance industry regarding their require-ments for reporting fraud to OIFP. Bythe end of 2003, OIFP, working with theMedia Center of the Division of CriminalJustice, was nearing completion of amajor expansion of the Web site, whichwill offer additional online resources forlaw enforcement officials engaged inthe investigation of insurance fraud.This expansion is expected to go onlineearly in 2004.

Annual New Jersey Insur-ance Fraud Summit

OIFP’s public awareness effortsculminate annually in the holding of aninsurance fraud summit, which hasevolved over the last several years tobecome one of the most importantmeetings of insurance fraud officials inthe world. The Summit is hosted byOIFP, co-sponsored by the New JerseySpecial Investigators Association(NJSIA) and the Insurance Council ofNew Jersey (ICNJ) and attended by of-ficials such as New Jersey GovernorJames E. McGreevey, Attorney Gen-eral Peter C. Harvey, Director of the Di-vision of Criminal Justice Vaughn L.McKoy and Insurance Fraud Prosecu-tor Greta Gooden Brown, as well as byinsurance industry and law enforce-

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www.njInsuranceFraud.org


ment executives. The Summit serves asa vehicle to emphasize the importanceof the public/private partnership betweengovernment and industry officials in NewJersey’s war against insurance fraud. Atthis year’s Sixth Annual Summit, theFirst Annual Insurance FraudProsecutor’s “Excellence in InvestigationAward” was presented to PrudentialProperty & Casualty as the Special In-vestigative Unit which most exemplifiedexcellence in the quality of their referrals

to OIFP, as well as in their cooperationand coordination with OIFP, and the out-come of their investigations. The Summitincluded breakout sessions for insur-ance industry executives, SIU represen-tatives and members of the law enforce-ment community, where current issuesof particular interest to each group wereexplored in depth. Summit keynotespeakers,including Dennis Jay, Executive Direc-tor of the Coalition Against InsuranceFraud, and William J. Mahon, Presi-dent and CEO of the National HealthCare Anti-Fraud Association, used theoccasion to offer a national perspec-tive on New Jersey’s noteworthyinsurance fraud accomplishmentsin 2002 and 2003.

John Butchko is a 25 year veteran ofState government and currently serves as aSpecial Assistant in the Office of the Insur-ance Fraud Prosecutor where he acts asthe Liaison to the insurance industry, theNew Jersey Department of Banking and In-surance, and the New Jersey Motor VehicleCommission. Prior to joining OIFP in 1998,he served as the Chief Investigator andDeputy Director of the Division of InsuranceFraud Prevention in the New Jersey De-partment of Banking and Insurance.

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58

OIFP’s Office Structure,

Organization

and Operations

by Scott Pby Scott Pby Scott Pby Scott Pby Scott Pattersonattersonattersonattersonattersonand Stephanie Stenzeland Stephanie Stenzeland Stephanie Stenzeland Stephanie Stenzeland Stephanie Stenzel

When it was created on May 19,1998, by the New Jersey Legislaturepursuant to the provisions of the Auto-mobile Insurance Cost Reduction Act(AICRA), the Office of the InsuranceFraud Prosecutor (OIFP) was estab-lished as New Jersey’s designatedlead agency to implement a compre-hensive program to investigate andprosecute insurance fraud as effec-tively and efficiently as possible. Ac-cordingly, OIFP was vested underAICRA with authority and responsibilityfor investigating all types of insurancefraud, and for conducting and coordi-nating criminal, civil, and administrativeinvestigations and prosecutions of in-surance and Medicaid fraud throughoutNew Jersey. In order to provide for themost effective and well integratedstatewide strategy possible to combatinsurance fraud, OIFP was also em-powered under AICRA to oversee andcoordinate the anti-insurance fraud ef-forts of law enforcement, and other

public agencies and departments inNew Jersey, with private industry.

OIFP was established as a law en-forcement agency within the Division ofCriminal Justice in the Department ofLaw and Public Safety, under the au-thority of the New Jersey Attorney Gen-eral, with a primary mission to crimi-nally prosecute insurance fraud. How-ever, in order to unify both civil andcriminal authority for investigating andprosecuting insurance fraud in oneagency, AICRA also required that cer-tain civil enforcement functions previ-ously within the purview of the Divisionof Insurance Fraud Prevention in theDepartment of Banking and Insurancebe transferred to OIFP pursuant to aplan of reorganization, which becameeffective on August 24, 1998. Amongother things, the reorganization plantransferred the entire civil investigativestaff of the Division of Insurance FraudPrevention to OIFP, thereby eradicat-ing the former fragmented approach to

A Blueprint for FightingA Blueprint for FightingA Blueprint for FightingA Blueprint for FightingA Blueprint for Fighting

Insurance FraudInsurance FraudInsurance FraudInsurance FraudInsurance Fraud

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combating insurance fraud in the Stateof New Jersey and consolidating bothcriminal and civil enforcement authorityin one agency, OIFP, and under oneagency head, the Insurance FraudProsecutor. In addition to the traditionalfunctions of investigation and prosecu-tion as a law enforcement agency, OIFPadministers a wide range of programsdesigned to inform the public, train lawenforcement and engage both the pub-lic and private sectors in OIFP’s effortsto eradicate insurance fraud.

OIFP is managed and directed bythe New Jersey Insurance Fraud Pros-ecutor, a gubernatorial appointee, andcomprises both a criminal and civil bu-reau. Each bureau, in turn, is com-prised of several specialized sections.In order to achieve the increased effi-ciencies resulting from greater special-ization, OIFP undertook a major struc-tural reorganization in 2002 and 2003,which culminated in the creation ofseparate investigative sections withinboth the criminal and civil sides ofOIFP. OIFP-Criminal now includesspecialized insurance fraud sectionsfocusing on auto fraud, health and lifefraud, and property and casualty fraud,as well as a Medicaid Fraud Section.OIFP-Civil is comprised of similarlyspecialized teams of Civil Investigatorswho investigate cases of possible vio-lations of the New Jersey InsuranceFraud Prevention Act (Fraud Act) andpursue restitution and the imposition ofcivil fines in appropriate cases. OIFP-Civil frequently imposes fines or ob-tains restitution in cases where OIFPwould otherwise be unable to pursue asuccessful criminal prosecution be-cause of the heightened burden ofproof required in criminal cases.

At the heart of OIFP’s success incombating insurance fraud is a care-fully crafted blueprint for receiving,screening, assigning and trackingnearly 10,000 new cases each year.

All referrals to OIFP, whether from in-surance companies, the OIFP hotlineor web site, citizen complaint letters orwalk-ins, administrative agencies orother law enforcement agencies, arereceived by OIFP’s Case Screening,Litigation and Analytical Support Sec-tion (CLASS). CLASS, formerly desig-nated within OIFP as the AnalyticalCase Tracking and Information Unit(ACIU), services both the criminal andcivil sides of OIFP. The unit is headedby a Supervising Deputy Attorney Gen-eral (SDAG) and a Supervising StateInvestigator (SSI), and is staffed withCivil Investigators, Analysts, TechnicalAssistants and clerical/administrativesupport personnel.

The CLASS unit is more than sim-ply a depository for all insurance fraudreferrals, however. In anatomical terms,it represents the central nervous systemof the OIFP organizational structure. Itsprimary function is to intake and input allreferrals, compare them to existing da-tabases, and then direct the referrals tothe appropriate specialized units withinOIFP for investigation whenever it ap-pears that a viable insurance fraudprosecution, either civil or criminal, orboth, can be developed. In those situa-tions where the incoming referral doesnot involve a violation of the Fraud Actor a possible criminal violation, theCLASS unit insures that referrals aremade to appropriate outside entities oragencies, such as the Department ofBanking and Insurance or a profes-sional licensing board.

Because of the lucrative nature ofcommitting insurance fraud and theease with which it can often be com-mitted, the CLASS unit receives a volu-minous number of referrals each year.Upon receipt of each referral byCLASS, documentation relating to thereferral is promptly date stamped. Sub-jects of the referrals are then searchedin existing databases and entered into

60

Law Manager, OIFP’s case tracking da-tabase. Case numbers are subsequentlyassigned. The information received in thereferral is screened by Civil Investigatorswho determine whether there is sufficientevidence to initiate a civil and/or criminalinvestigation. If a referral appears to in-volve a criminal violation, it is reviewedby the SDAG who decides whether toaccept or decline it for criminal investi-gation. The screening process usuallyincludes obtaining additional back-ground information on subjects fromqueries of various governmental andpublic records databases. All cases arethen assigned for investigation, referredto other agencies, or closed and refer-enced for possible later review, shouldthe subject of the referral again come tothe attention of OIFP authorities.

Cases that warrant investigationare coded by type of insurance fraud,such as auto, life or disability, and as-signed to one of OIFP’s three regionaloffices. After cases have been as-signed, Analysts and Technical Assis-tants in CLASS continue to support civiland criminal investigators by providingadditional database support, asneeded, and in-depth analyses of evi-dence developed in designated cases.Many of OIFP’s larger and more com-plex investigations often require CLASSunit Analysts and Technical Assistantsto assist in the investigations, and, ona case by case basis, use a variety ofcutting edge software applications toanalyze complex relationships amongindividuals, businesses, and their fi-nancial dealings. Depending upon therequirements of the investigation, vari-ous types of analyses are performed,including association, event flow, in-surance claim, commodity flow, finan-cial transaction, times series, tele-phone record, and statistical analyses.Among the records that may be subjectto OIFP’s various analytical tools areinsurance billings, financial records,

corporate filings, investigative reports,surveillance reports, telephone tolls,electronic surveillance transcripts ortapes, interviews, testimony and publicdatabases. Typically, the products gen-erated by an OIFP Analyst include re-ports, tables, graphs, charts, flow dia-grams and free form charts, many ofwhich are later used as Grand Jury ortrial exhibits.

OIFP’s success is attributable, ingreat part, to the ability of its several in-formation management systems totrack and manage cases. These sys-tems contain information for trackingand managing cases referred to, andfrom, OIFP, as well as informationwhich can be tapped for investigativeresearch to identify possible patternsand trends in insurance fraud. The Law

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Manager Database Integrated Computer-ized Case Tracking System, which cap-tures data in incoming referrals to OIFPand monitors the progress of investiga-tions stemming from those referrals, wassignificantly enhanced in 2003 to incor-porate information on criminal, as wellas civil, investigations.

Always in the forefront of fightingfraud, OIFP partnered in 2003 with In-surance Claims Services, Inc., whileaddressing AICRA’s mandate for thedevelopment and maintenance of anAll Claims Database. The All ClaimsDatabase will enable OIFP to accessclaims related to auto accidents andrelated property damage for all NewJersey insurance carriers writing pre-miums in excess of $2 million per year,and who are required by law to submitclaims to the organization. Most insur-ers in New Jersey write enough autoinsurance business in New Jersey tomeet the threshold for submitting theirdata, making the database a substan-tial and relatively comprehensiveinvestigative resource.

Access to the All Claims Databaseand the ability to review nearly all claimssubmitted in New Jersey will now pro-vide OIFP with a bird’s eye view of auto-mobile accident claim activity that wouldnot otherwise be accessible to indi-vidual carriers. Analysis of the claimsdata will also enable OIFP trained per-sonnel to detect new and emergingtrends and patterns of insurance fraud.Link analysis tools integrated with theAll Claims Database will allow investiga-tors and analysts to associate claim-ants, automobiles, providers, and attor-neys in such a way that staged auto ac-cidents and orchestrated “ring” activitiescan be detected. These software appli-cations will prove beneficial not only tothe State Investigators who use them indeveloping their investigations, but alsoto prosecutors, judges and jurors whenthe investigations are complete andmatters proceed to trial.

OIFP is mindful that insurancecheats continually refine current fraudschemes and seek ways to devise newones. History has demonstrated that, tobe effective in combating fraud, OIFPmust continue its leadership role inpursuing insurance “fraudsters” withthe most effective investigative andlegal “ammunition” possible. Using cur-rent and innovative analytical softwareand employing the most highly trainedpersonnel is essential to this task. Thegoal of deterring, if not eradicating,insurance fraud in New Jersey is anenormous one. Carefully contemplatedand crafted legislation enacted by ourelected representatives, which pro-vides our prosecutors and investigatorswith the most effective tools to investi-gate and prosecute insurance fraud, to-gether with OIFP’s commitment to “stayahead of the curve” in the areas of per-sonnel, training and technological ad-vances, will only continue to ensure thatOIFP’s vision of defeating insurancefraud on every front becomes a reality.

Scott R. Patterson is a 14 year veteranwith New Jersey’s Division of Criminal Jus-tice and currently serves as the Supervis-ing Deputy Attorney General in charge ofOIFP’s Case Screening and LitigationSupport Section. He previously served asan Assistant Prosecutor in Passaic County.

Stephanie Stenzel has been with the Divi-sion of Criminal Justice for 17 years, servingas a Supervising State Investigator for thepast ten years. Previously, she worked fortwo years as a Special Agent in the FBI’sLas Vegas Division. She currently servesas a supervisor in OIFP’s Case Screening,Litigation & Analytical Support Section.

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Sheila Breeding of Allstate NewJersey joins Attorney General Peter

C. Harvey, Division of Criminal JusticeDirector Vaughn McKoy and Insur-

ance Fraud Prosecutor Greta GoodenBrown in announcing the State

indictment against staged accidentringleader Iris Salkauski.

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Cooperation,

Coordination, and

Communication

Key to

OIFP Success


While the Office of the InsuranceFraud Prosecutor’s record of success-ful investigations and prosecutionsmay have established it as the nation’smost emulated model for fighting insur-ance fraud, it has been through a win-ning combination of communication,cooperation and coordination that theOffice has been recognized within NewJersey as the leader in New Jersey’swar on insurance fraud.

When the New Jersey Legislatureestablished the Office of the InsuranceFraud Prosecutor (OIFP), it did morethan merely create another govern-ment agency to fight insurance fraud. Itendowed that agency with the mandateand the tools to ensure that, from thattime forth, insurance fraud cases wouldnot “fall between the cracks” of the dis-parate New Jersey bureaucracies hav-ing responsibility for addressing differ-ent aspects of insurance fraud. As ex-pressly recognized by the Legislature

in the Preamble to the law which gavebirth to OIFP, the Automobile Insur-ance Cost Reduction Act of 1998(AICRA), “...while the pursuit of thosewho defraud the automobile insurancesystem has heretofore been addressedby the State through various agencies,it has been without sufficient coordina-tion to aggressively combat fraud, lead-ing to the conclusion that greater con-solidation of agencies which were cre-ated to combat fraud is necessary to ac-complish this purpose....”

Whereas the consolidation con-templated by the Legislature waslargely realized by transferring civil in-surance fraud investigatory responsi-bilities from the Department of Bankingand Insurance to a fledgling OIFPwithin the Department of Law and Pub-lic Safety’s Division of Criminal Justice,a law enforcement agency, lawmakersalso ensured that OIFP would have astatutory mechanism to fulfill the

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Legislature’s expectation that OIFPwould lead New Jersey’s fight againstinsurance fraud by coordinating theanti-fraud efforts of others in both thepublic and private sectors.

As envisioned by the Legislature,coordination would be achieved byhaving OIFP establish a comprehen-sive system for making and receivinginsurance fraud referrals and equallycomprehensive databases for docu-menting, tracking, evaluating and ana-lyzing those referrals. Coordinationwould be further enhanced by requiringOIFP to meet regularly with insuranceindustry representatives, County Pros-ecutors, and other units of state and lo-cal government which investigate fraud.

Liaison SectionPerhaps most significantly, the

Legislature required in AICRA thatOIFP establish an institutionalmechanism to implement these mea-sures by specifically designating asection of the Office “to be respon-sible for establishing a liaison andcontinuing communication betweenthe office and the Department ofHealth and Senior Services, the De-partment of Human Services, anyprofessional board in the Division ofConsumer Affairs in the Departmentof Law and Public Safety, the Depart-ment of Banking and Insurance, theDivision of State Police, every countyprosecutor’s office, such local gov-ernment units as may be necessaryor practicable and insurers.” OIFP, inturn, established the OIFP LiaisonSection, whose primary responsibilityis to ensure the ongoing statewidecoordination of the activities of virtu-ally every public and private entity inNew Jersey involved in any aspect ofaddressing New Jersey’s pandemic ofinsurance fraud.

To ensure that the coordination ef-forts of its Liaison Section adequatelyembrace the overlapping responsibili-ties and activities of public agencieswhich investigate or otherwise encoun-ter insurance fraud, particularly those inthe law enforcement community, as wellas those in various areas of the insur-ance industry, OIFP assigned veteranstaffers to act, respectively as its CountyProsecutor, Law Enforcement, Insur-ance Industry and Professional BoardsLiaisons. Each of these Liaisons hasbeen specifically tasked with coordinat-ing OIFP’s corresponding investigationsand prosecutions with the activities ofthose agencies or entities within theirrespective spheres of responsibility.

Selective Insurance Assistant VicePresident Joanne Roberts lectures

investigators on fraud preventionand awareness.

66

County Prosecutor LiaisonAs the title suggests, the County

Prosecutor Liaison is responsible,among other things, for coordinating in-vestigations and prosecutions emanat-ing from the State’s 21 County Pros-ecutors’ Offices with those undertakenby OIFP. In order to avoid the possibil-ity of OIFP and a County Prosecutor’sOffice working on the same case unbe-knownst to each other, OIFP’s CountyProsecutor Liaison established, ascontemplated by AICRA, a comprehen-sive system of referrals and statisticalreporting to monitor county investiga-tions and, when appropriate, take mea-sures to ensure that the activities oftheir respective agencies complement,rather than conflict with, one another.

The protocol established by theCounty Prosecutor Liaison requiresthat County Prosecutors provide OIFPwith “Cumulative Monthly Reports”which set forth the names, addressesand other identifiers of all subjects un-der investigation in their offices for sus-pected insurance fraud. County Pros-ecutors update their reports on amonthly basis, including informationconcerning the type of suspected in-surance fraud and the current status ofany investigative or prosecutorial ef-forts undertaken in their offices with re-spect to the reported matters. This in-formation is added to, and integratedinto, OIFP’s own databases.

By reviewing and tracking every in-surance fraud matter opened by aCounty Prosecutor’s Office in theState, the County Prosecutor Liaison isable to identify cases which may al-ready be the subject of an investigationby OIFP, and which would result in aduplicative, if not a dangerous, use ofprecious law enforcement resources.Whenever more than one law enforce-ment agency is investigating the same

matter or individual, there exists thepotential that one or more of the inves-tigative activities of the involved agen-cies might adversely impact upon theactivities of the other, such as the casewhere one agency prematurely arrestsa “target” who is being wiretapped, orunwittingly arrests an informant or un-dercover agent working for anotheragency. Identifying such cases early inthe process, at the very least, preventsthe agencies involved from unnecessar-ily expending resources to undertakeidentical investigative measures. Con-versely, identifying cases which havecaught the attention of more than onelaw enforcement agency may facilitatethe sharing of critical investigative infor-mation among those agencies.

The information reported monthlyby County Prosecutors’ Offices alsoenables OIFP to open corresponding

OIFP State Investigators participatein auto arson forensic trainingprovided by Allstate as part ofthe new OIFP/Industry JointTraining Program.

67


civil investigations in cases where thelaw provides authority for the imposi-tion of a civil fine. Inasmuch as pros-ecutors are sometimes unable to suc-cessfully prosecute the subject of in-surance fraud investigations becausethey are unable to establish proof ofthe suspected crimes “beyond a rea-sonable doubt,” OIFP is often able toimpose a civil fine on the very samesubjects reported by the counties intheir monthly reports, because the im-position of a civil penalty requires thelesser burden of proof by a “preponder-ance of the evidence.”

Accordingly, every case reportedby a County Prosecutor’s Office ispromptly reviewed upon receipt byOIFP to determine whether it is appro-priate to assign for investigation byOIFP Civil Investigators. Where it ap-pears that the matter falls within thepurview of the Insurance Fraud Pre-vention Act (Fraud Act), which permitsthe imposition of civil insurance fraudpenalties, the matter is promptly as-signed to a Civil Investigator, who con-tacts an Assistant Prosecutor or Inves-tigator in the reporting CountyProsecutor’s Office to identify an ap-propriate point of contact and open achannel of continuing communicationto coordinate the investigative andprosecutorial activities of the reportingcounty with those of the OIFP Civil In-vestigator. This process often enablesOIFP to obtain a voluntary Consent Or-der, requiring a subject to pay a civilfine, within the context of a negotiatedguilty plea. Such reporting by CountyProsecutors in 2003 enabled OIFP toopen 797 civil cases for investigation.Many of the most substantial fines im-posed by OIFP in 2003 resulted di-rectly from cases reported by CountyProsecutors’ Offices.

In order to assist in particular in-vestigations and, when necessary, pro-vide technical assistance, the CountyProsecutor Liaison is frequently in con-

tact with Investigators, Detectives andAssistant Prosecutors in the CountyProsecutors’ Offices. The County Pros-ecutor Liaison also meets regularlywith representatives of County Pros-ecutors’ Offices at quarterly regionallaw enforcement coordination meet-ings hosted by OIFP at its three re-gional offices, where OIFP providesguest speakers and opportunities fornetworking and sharing information asto pending insurance fraud investiga-tions within their respective offices.The County Prosecutor Liaison alsoconducts annual insurance fraud train-ing at OIFP’s central offices inLawrenceville, New Jersey, and isresponsible for administering theCounty Prosecutor Insurance FraudReimbursement Program, which pro-vides funding that enables CountyProsecutors to establish or augmentInsurance Fraud Units within their of-fices. In its fourth full year of operationin 2003, the Reimbursement Programprovided over $3 million in funding toCounty Prosecutors.

Law Enforcement LiaisonIn recognition of the fact that virtu-

ally every law enforcement agency inNew Jersey is apt to encounter insur-ance fraud at one time or another,OIFP has also assigned a Law En-forcement Liaison to work with law en-forcement agencies other than thoseagencies assigned to the County Pros-ecutor Liaison. The Law EnforcementLiaison’s primary responsibility is to en-sure the appropriate coordination ofOIFP’s investigations and prosecutionswith those of other law enforcementagencies, both within and without NewJersey. Those law enforcement agen-cies range from local and county policedepartments, to County Sheriffs’ De-partments, to the New Jersey State Po-lice, and their counterparts in adjoiningstates, as well as federal law enforce-ment agencies having a presence in

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New Jersey, such as the FederalBureau of Investigation.

The Law Enforcement Liaison’s re-sponsibilities also include the adminis-tration of OIFP’s protocols for issuingdocumentation used in undercover in-vestigations, such as fictitious insur-ance cards and pretext insurance poli-cies, which contribute to the aura of au-thenticity necessary to the success ofundercover sting operations. His re-sponsibilities also extend to the distri-bution of training and other informa-tional materials to local police depart-ments. For example, whenever OIFPproduces a roll call training video,OIFP distributes those videos, throughthe Law Enforcement Liaison, to everylaw enforcement agency in New Jer-sey, including county and municipalpolice departments. In 2003, in addi-tion to OIFP’s initial distribution of rollcall training videos to New Jersey lawenforcement agencies, the OIFP LawEnforcement Liaison distributed an-other 44 training videos to requestinglaw enforcement agencies, includingmany from outside of New Jersey. TheLaw Enforcement Liaison was also re-sponsible for the distribution of over1,000 copies of OIFP’s Uninsured Mo-torist Identification Directory (UMID),which is produced by OIFP to providelaw enforcement agencies with a com-prehensive directory of insurance com-pany insurance verification hotline tele-phone numbers. The UMID is nowcommonly used by patrol officersthroughout New Jersey to verify the le-gitimacy of insurance cards presentedto them by motorists.

In his role as OIFP’s representativeto the law enforcement community, theLaw Enforcement Liaison is also re-sponsible for scheduling and hostingOIFP’s regional law enforcement coor-dination meetings which, in 2003, fea-tured guest speakers with expertise insuch areas as identity theft, health carefraud and ethnic insurance fraud rings.

The Law Enforcement Liaison alsoregularly attends meetings of numer-ous law enforcement and related orga-nizations and associations, such as theAnti-Fraud Association of the North-east, the New Jersey Special Investi-gators Association, the Delaware Val-ley Chapter of the International Asso-ciation of Special Investigation Units,the National Insurance Crime Bureau(NICB), the Mid-Atlantic States Insur-ance Fraud Association (MASIFA) andthe Northeast Chapter of the Interna-tional Association of Vehicle Theft In-vestigators. He is also responsible forsupervising OIFP’s informational dis-play booths at such events as the an-nual NJSIA Conference and the PoliceExpo held in conjunction with the an-nual convention of the New JerseyChiefs of Police Association.

Because insurance fraud is, by its

Members of the OIFP executivestaff (l. to r.) Stephen Moore, JohnJ. Smith, Jr. and Melaine Campbelldiscuss an investigative plan duringa strategy session.

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very nature, a crime of relative subtletyand complexity, it is essential that anyprogram to combat insurance fraud of-fers training which is tailored to theneeds and expertise of those who aremost likely to encounter such fraud inany of its many forms. As lawenforcement’s front line in the war oninsurance fraud, local police officersfrequently encounter situations inwhich insurance fraud in one form oranother may be lurking, yet traditionallaw enforcement training has rarelyprovided those officers with the tools toeffectively detect or investigate suchfraud. OIFP, however, has stepped into fill that void and, through its Law En-forcement Liaison, offers a compre-hensive roster of training opportunitiesfor law enforcement officers at everylevel of experience, including basicand in-service training in such areasas identifying and charging offensesinvolving counterfeit insurance cards,falsely reported auto thefts and“staged” accidents.

OIFP’s Law Enforcement Liaisonalso routinely fields requests for assis-tance from other law enforcementagencies, and works diligently to en-sure that such assistance is forthcom-ing. In 2002 and 2003, the Law En-forcement Liaison worked closely withthe Insurance Council of New Jersey(ICNJ) to assist insurance company in-vestigators in obtaining accident re-ports from local police departments.Police departments in New Jerseyhave historically been reluctant to re-lease accident reports to persons otherthan those involved in the reported ac-cidents because the reports have oftenbeen used by “runners” to recruit pa-tients for medical and chiropractic“treatment mills.” Pursuant to AICRA,however, insurance company investi-gators are entitled to receive informa-tion from such reports within 24 hoursafter the occurrence of an accident inwhich their company has an interest. In

those cases where the request of an in-surance company investigator for an ac-cident report is met with resistance by alocal police department, OIFP’s Law En-forcement Liaison works as an interme-diary with local police departments toensure that the reports are provided asrequired by law.

Insurance Industry LiaisonBecause the overwhelming major-

ity of OIFP’s insurance fraud cases re-sult from referrals made by the insur-ance industry, effective coordinationand open channels of communicationare essential to the success of bothOIFP and insurance industry fraud in-vestigations. Consequently, AICRAspecifically provided that OIFP shouldformally establish a liaison to ensurecontinuing communications with insur-ers. OIFP’s Insurance Industry Liaisonis assigned a variety of responsibilitiesto ensure that the respective efforts ofOIFP and insurance industry investiga-tors complement and assist one an-other in the investigation of suspectedinsurance fraud. Among other things,the Insurance Industry Liaison ensuresthat appropriate standards for referralsfrom insurance companies are estab-lished, maintained and communicatedto insurance industry investigators.Perhaps more importantly, the Insur-ance Industry Liaison maintains aclose working relationship with officialsfrom all sectors of the insurance indus-try, including both executive and stafflevel personnel, to ensure that issuesare identified and addressed bothpromptly and effectively.

As OIFP’s primary point of contactwith the insurance industry, the Insur-ance Industry Liaison also providesguidance, advice and technical assis-tance to the insurance industry with re-spect to a wide spectrum of issues andconcerns, such as the sharing of inves-tigative information, compliance with

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Director of Division of Criminal JusticeVaughn L. McKoy gives keynoteaddress at the New Jersey SpecialInvestigators Association Seminar.

statutory reporting requirements, and theformulation of solutions to problems con-fronted by the insurance industry whendealing with insureds who commit insur-ance fraud. The Insurance Industry Liai-son and his assistant provided assis-tance or guidance to industry personnelon 917 occasions in 2003.

The Insurance Industry Liaison alsohosts the OIFP/Insurance IndustryWorking Group Meetings which regu-larly meet to discuss, and seek solu-tions to, issues and problems of themost concern to those in the insuranceindustry. Many proposals conceived inthese meetings have been refined andincorporated as recommendations forlegislative or regulatory reform by OIFPin its Annual Report to the Governorand Legislature. Different workinggroups have been established by the In-surance Industry Liaison to address theconcerns of those in the insurance in-dustry working, respectively, in the ar-eas of property and casualty insurance,as well as those working in the areas oflife and health insurance. The InsuranceIndustry Liaison has also been an im-portant member of OIFP’s workinggroup created to implement AICRA’s re-quirement that OIFP establish a data-base incorporating all paid claims inNew Jersey involving automobile insur-ance. It is anticipated that regulationsreflecting the deliberations of this work-ing group will be adopted in 2004.

OIFP is also represented by theInsurance Industry Liaison in meetingswith insurance companies and insur-ance industry trade associations, whichprovide a continuing opportunity for thecandid exchange of information andideas on matters of mutual interest.Among the meetings attended by theInsurance Industry Liaison in 2003were gatherings of the Anti-Fraud As-sociation of the Northeast, the NICB,the Insurance Council of New Jersey,the New Jersey Special InvestigatorsAssociation, the New Jersey Vehicle

Theft Investigators Association andthe Delaware Valley and nationalmeetings of the International Associa-tion of Special Investigative Units. In2003, the Insurance Industry Liaisonalso provided training to nearly 2,000employees of the insurance industryconcerning the structure and opera-tions of OIFP and insurance industryfraud reporting requirements.

OIFP’s Insurance Industry Liaisonalso works closely, on behalf of OIFP,with the New Jersey Department ofBanking and Insurance. In this regard,the Liaison’s responsibilities includethe coordination and tracking of OIFPcases which involve professionals li-censed by the Department of Bankingand Insurance, including licensed in-surance producers, public adjustersand real estate agents. In 2003, the In-surance Industry Liaison tracked 67such cases.

The program established by the In-surance Industry Liaison in 2002 to dis-tribute OIFP’s press releases to ap-proximately 125 insurance industry offi-cials grew substantially in 2003, as thelist of those wishing to receive thepress releases continues to expand. Asnoted elsewhere in this Report, the In-surance Industry Liaison also contin-ued to play a significant role in OIFP’spublic awareness programs, distribut-ing thousands of fraud awarenessposters and brochures, and again play-ing an important part in planning andconducting both the Annual Confer-ence of the New Jersey Special Inves-tigators Association and the annualNew Jersey Insurance Fraud Summit.

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ProfessionalBoards Liaison

Because many types of insurancefraud are committed by individuals whoare licensed to provide medical andother health related services, OIFP hasalso designated an individual within itsLiaison Section to act as its “Profes-sional Boards Liaison.” Among thoselicensed individuals who sometimessuccumb to the temptation to commitinsurance fraud are physicians, chiro-practors, pharmacists, physical thera-pists, dentists and others in the alliedmedical professions. Effective coordi-nation between OIFP and professionallicensing authorities is essential to en-sure that complaints received by OIFPinvolving licensed professionals arebrought to the attention of the appropri-ate licensing authorities, and that thoseauthorities are provided with such in-formation as may be necessary to en-able those authorities to take appropri-ate action against licensees who havecommitted, or are suspected of com-mitting, insurance fraud. Coordinationby the Professional Boards Liaisonalso ensures that, whenever a com-plaint to one of the licensing authoritiesinvolves possible insurance fraud, thematter is brought to the attention ofOIFP investigators in order to deter-mine whether a civil or criminal investi-gation by OIFP is warranted. In the ab-sence of such coordination, mattersunder review by the professional li-censing boards might otherwise escapethe scrutiny of law enforcement authori-ties or, conversely, matters under inves-tigation by OIFP or County Prosecutors’Offices might otherwise avoid review bythe professional licensing boards.

OIFP’s Professional Boards Liai-son has established, and maintains, acomprehensive database of profes-sional licensees who have been thesubject of complaints to either OIFP, a

County Prosecutor’s Office or one of theState’s professional licensing boards.The database includes information con-cerning the nature and source of thecomplaint or referral, as well as the sta-tus of any proceedings brought by theEnforcement Bureau of the Division ofConsumer Affairs, the enforcement armof the licensing authorities. It also in-cludes information as to the status ofany investigation or prosecution of alisted licensee by OIFP or a CountyProsecutor’s Office. The ProfessionalBoards Liaison has also established aprotocol providing for the prompt notifica-tion to the professional licensing boardswhenever OIFP undertakes investigationof a licensee under a board’s jurisdic-tion, as well as a reciprocal requirementproviding that professional licensingboards advise OIFP whenever they re-ceive a complaint against one of theirlicensees involving insurance fraud.

The Professional Boards Liaisonconducts bi-monthly meetings with keymembers of the Division of ConsumerAffairs Enforcement Bureau and OIFPsupervisory investigative andprosecutorial personnel to review anddiscuss the status of any proceedings,whether planned or pending, againstany licensee in the database, whetherthose proceedings are administrative,criminal or civil in nature. By sharing in-formation in this manner, the Profes-sional Boards Liaison is able to ensurethat actions taken by one agency donot, in any way, negatively impact uponthe proceedings of any other agencyconcerned with the licensee underscrutiny. The exchange of informationat these meetings also enhances theability of each agency to more effec-tively conduct its own investigations,and to determine whether further pro-ceedings may be warranted with re-spect to a particular licensee.

This group, designated as the Liai-son and Continuing CommunicationsGroup, monitored some 626 active insur-

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ance fraud related cases in 2003. Sinceits inception late in 1998, the Group hasreviewed and disposed of 693 casesthrough civil or criminal dispositions byOIFP, licensing sanctions by a profes-sional licensing board or by administra-tive closure. Of those under review in2003, ten licensed professionals wereindicted, 15 pled guilty or were foundguilty after trial, and nine received sen-tences ranging from one year of proba-tion with restitution and fines, to jailterms of up to three years. This collabo-ration between OIFP and the profes-sional licensing boards has also facili-tated the imposition of various disciplin-ary actions by professional and occupa-tional boards within the Division of Con-sumer Affairs involving 26 licensed pro-fessionals in 2003.

Like his counterparts in OIFP’s Liai-son Section, the Professional Boards Li-aison communicates daily with profes-sionals in such other agencies as theBoard of Medical Examiners and theChiropractic, Dentistry, Pharmacy, andNursing Boards, providing them withtechnical assistance and advice asneeded. Within OIFP, the ProfessionalBoards Liaison also works closely withthe Case Screening Litigation and Ana-lytical Support Section (CLASS) tomake sure that referrals to OIFP involv-ing professional licensees are enteredinto the database which he maintains,and to make sure that those matters areproperly assigned and coordinatedamong investigators and attorneys inOIFP’s criminal and civil sections.

Though the Legislature’s statutorymandate may have required a mecha-nism within OIFP to oversee and coor-dinate insurance fraud efforts through-out the State, those within OIFP’sLiaison Section have personallyadopted as their credo, “Leadershipthrough Communication, Cooperationand Coordination.”

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First Assistant Insurance Fraud ProsecutorJohn J. Smith, Jr. (c.right) suggests

investigative strategy at a meeting withUnion County Prosecutor’s Office staff.

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OIFP Funds

County Prosecutors’

Insurance Fraud

Fighting Efforts


Aided by funding provided by theOffice of the Insurance Fraud Prosecu-tor (OIFP), New Jersey’s County Pros-ecutors continued in 2003 to expandtheir efforts in the State’s war on insur-ance fraud through the undertaking ofcriminal investigations and prosecu-tions at the county level. From anEssex County initiative targeting own-ers who burn their cars in order to filephony insurance claims to a uniqueSalem County ride along programaimed at drivers who use fraudulent in-surance identification cards, CountyProsecutors have used OIFP fundingto launch or toughen programs to catchand punish insurance cheats.

Pursuant to the Automobile Insur-ance Cost Reduction Act of 1998(AICRA), the Attorney General is au-thorized to reimburse County Pros-ecutors for their efforts to combat in-surance fraud. Since its inception in1999, the New Jersey County Pros-ecutor Insurance Fraud Reimburse-

ment Program, administered by OIFPon behalf of the Attorney General, hasfunded fraud fighting personnel andequipment in 20 of the State’s 21County Prosecutors’ Offices.

The funding of County Prosecu-tors’ Offices to enhance their ability toinvestigate and prosecute insurancefraud is an integral part of NewJersey’s broad-based war on insur-ance fraud because County Prosecutorsare often able to detect, investigateand prosecute insurance scamswhich might otherwise “fly below theradar screen” of a statewide criminaljustice agency. Through their closeworking relationship with local law en-forcement agencies, their cultivation oflocal informants, their ability to tap locallaw enforcement resources and theirunique familiarity with local crime de-mographics, County Prosecutors are of-ten able to identify and develop promis-ing leads which culminate in successfulcriminal prosecutions.

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With OIFP’s financial backing,County Prosecutors continued in 2003to implement new and innovative initia-tives carefully tailored to investigateand prosecute insurance cheats withintheir jurisdictions. In Essex County,New Jersey’s most urban county, theEssex County Prosecutor used OIFPfunding to inaugurate an Essex CountyVehicle Fire Initiative at the end of2002. The Initiative hit its stride in 2003as it implemented protocols for pro-cessing, reviewing and screening allvehicles burned in the county. The Ini-tiative operates as a separate programwithin the Essex County Arson TaskForce. Personnel assigned to the Initia-tive work closely with insurance com-pany investigators and local police de-partment detectives to ensure that ev-ery motor vehicle fire in the county isinvestigated by qualified personnel as

expeditiously and efficiently as pos-sible. In 2003, the Essex County Ve-hicle Fire Initiative opened well over300 cases involving over $3 million inpotential insurance claims. All of thesecases were also reported by the EssexCounty Prosecutor’s Office to OIFP onmonthly reporting forms, which en-abled OIFP to open civil insurancefraud investigations to complement anycriminal prosecutions ultimately under-taken by the Essex CountyProsecutor’s Office. Without fundingfrom OIFP, local law enforcement au-thorities would have lacked sufficientresources to adequately investigatemost of these cases.

At the other end of New Jersey, inSalem County, OIFP funding enabledthe Salem County Prosecutor’s Officeto implement a new Insurance FraudRide Along Program. Under this Pro-gram, the county’s OIFP funded insur-ance fraud Investigator rides along withmunicipal police officers in patrol carswhich have been specifically assignedto make motor vehicle stops to performdocument checks, which include verify-ing the authenticity of motor vehicle in-surance identification cards produced bythe vehicles’ drivers. In order to verifywhether a card is fictitious, or whetherthe underlying insurance was canceledfor non-payment of premium, the Pro-gram relies, in large part, upon the Unin-sured Motorist Identification Directory(UMID) issued by OIFP to all CountyProsecutors’ Offices and all local policedepartments. The UMID, a directory ofinsurance company “hotline” numbers,was specifically compiled, published anddistributed to law enforcement agenciesthroughout New Jersey by OIFP in orderto provide them with an efficient and ef-fective tool to directly contact insurancecompanies to verify insurance coverage.Salem’s Ride Along Program resulted inthe charging of numerous drivers withthe crime of displaying a fictitious insur-

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ance identification card, and has sent amessage to drivers in Salem County thatusing a counterfeit insurance card in lieuof properly insuring one’s vehicle is acrime in New Jersey.

In 2003, the OIFP funded insurancefraud unit in the Morris CountyProsecutor’s Office was empowered bythe Morris County Prosecutor’s issu-ance of a county-wide directive to all po-lice departments in Morris County. TheDirective required all police departmentsto complete and submit specific reportsto the Morris County Prosecutor’s Officein every case where a motor vehicle isreported stolen, in every case where amotor vehicle that had previously beenreported stolen is recovered, and in ev-ery case where a person presents a po-lice officer with a fictitious or fraudulent in-surance identification card. The Directiveis intended to ensure that every possibleinsurance fraud case involving a motor ve-hicle theft or counterfeit insurance card isbrought to the attention of detectives andprosecutors who are experienced in in-vestigating and prosecuting cases of in-surance fraud. The Directive serves as amodel of what can be accomplishedwhen a County Prosecutor takes boldsteps to ferret out insurance fraud.

After a brief hiatus, in 2003, theUnion County Prosecutor’s Office re-joined the County Prosecutor InsuranceFraud Reimbursement Program with arenewed vigor and the assignment ofhighly experienced investigators andprosecutors to its Insurance Fraud Unit.With funding provided through OIFP, theUnion County Prosecutor’s Office re-structured its insurance fraud investiga-tive unit and developed a close workingrelationship with the highly successfulEssex/Union Auto Theft Task Force, arelationship that promises to yield theUnit significant insurance fraud leads.

Funding provided by OIFP to theseCounty Prosecutors’ Offices and othersthroughout the State, totaled over $3 mil-

State Police Fraud Unit toState Police Fraud Unit toState Police Fraud Unit toState Police Fraud Unit toState Police Fraud Unit toFight Insurance FraudFight Insurance FraudFight Insurance FraudFight Insurance FraudFight Insurance Fraud

OIFP Funds

As part of its multi-faceted program to combat insurance fraud, the NewJersey Office of the Insurance Fraud Prosecutor (OIFP) also provides fundingwhich pays the salaries of the eight New Jersey State Troopers assigned to theInsurance Fraud Unit of the New Jersey State Police (NJSP). Established with theassistance of OIFP in 1999, the Unit targets motorists on roadways within thejurisdiction of the State Police who violate New Jersey’s insurance laws. Since itbegan operation, the NJSP Insurance Fraud Unit has opened more than 800insurance fraud related investigations, and filed over 900 charges against morethan 850 individuals. Most of the efforts of the Unit have focused on thewidespread use of counterfeit or “fictitious” automobile insurance identificationcards by motorists attempting to circumvent New Jersey’s system of mandatoryautomobile insurance.

In 2003, the NJSP Insurance Fraud Unit reported that it initiatedapproximately 166 insurance fraud investigations, effected 172 arrests and filed135 insurance fraud related charges. The Unit has also conducted, or participatedin, the training of hundreds of law enforcement officers at the municipal and Statelevels with respect to identifying, investigating and charging offenses involvingthe use of counterfeit insurance cards.

lion in 2003 and supported or contributedto the salaries of 40 detectives and in-vestigators, nine assistant prosecutorsand six technical and administrative sup-port staff assigned to investigate andprosecute insurance fraud. Pursuant tothe requirements of AICRA and theCounty Prosecutor Insurance Fraud Re-imbursement Program, county insurancefraud units work closely and coordinatetheir activities with OIFP on an ongoingbasis. All County Prosecutors’ Officessubmit periodic reports to OIFP, whichinclude names, addresses and otherpertinent identifying information regard-ing any subjects under investigation for

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insurance fraud within their offices. Thestatus of all matters under investigationare updated in monthly reports whichprovide OIFP with information which isadded to its own database of cases toensure that its own investigations donot duplicate or overlap those under-taken by the counties.The information reported by county in-surance fraud units funded by OIFP en-ables OIFP, in most cases, to open cor-responding civil cases whenever it ap-pears that OIFP may have authority toimpose a civil fine pursuant to the provi-sions of the Insurance Fraud PreventionAct. In 2003, the reporting of subjectsunder investigation by County Prosecu-tors’ Offices resulted in OIFP openingnearly 800 (797) civil investigations,most of which would not have come toOIFP’s attention but for the reports sub-mitted by the counties. Many of the sub-stantial civil cases opened by OIFP-Civilhave resulted from these county refer-rals. The civil investigations conductedby OIFP as a result of these county re-ferrals benefit from the assistance and

cooperation provided by County Pros-ecutors’ Offices investigators and assis-tant prosecutors funded by OIFP.

County Prosecutors’ InsuranceFraud Units charged a total of 393 defen-dants in 2003 and obtained 175 convic-tions by guilty plea or trial, which re-sulted in jail terms of more than 61years in the aggregate. Some of theirmost notable cases are summarized inthis Report.

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OIFP Deputy AttorneyGeneral FrankHolstein addressesthe Honorable FrederickDe Vesa in MiddlesexCounty Superior Court.

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InsuranceFraudCaseHighlights

The law provides for a number ofmeans by which the Office of the Insur-ance Fraud Prosecutor (OIFP), andthose law enforcement agencies work-ing in conjunction with OIFP, can takeaction against insurance fraud viola-tors. The most formidable of those ac-tions are those involving criminal pros-ecutions. Criminal prosecutions mayresult in penalties ranging from the im-position of State prison or county jailsentences to probationary or diversion-ary dispositions. These sentences arealso usually accompanied by the impo-sition of criminal fines and/or the pay-ment of restitution. Summaries of someof the most significant criminal casesbrought by OIFP and County Prosecu-tors in 2003 are set forth in this sectionof the Report.

Those who defraud the MedicaidProgram are subject to the same crimi-nal sanctions as those who defraud pri-vate insurance carriers. In addition tothe imposition of criminal penalties,

however, other sanctions may be im-posed upon Medicaid defendants, suchas debarment from participation in theMedicaid Program as a Medicaid pro-vider. Where a criminal prosecution isnot viable, Medicaid providers mayalso be sued under civil federal orState false claims statutes. Oftentimes,these cases result in settlements in-volving restitution and the imposition ofcivil fines. Highlights of such cases areincluded herein.

The Insurance Fraud PreventionAct (Fraud Act), N.J.S.A.17:33A-1, etseq., specifically provides OIFP withauthority to impose civil fines on insur-ance fraud violators in addition to or asan alternative to criminal prosecution.Summaries of cases in which OIFP en-tered into Consent Orders providing forthe voluntary payment of such fines, aswell as cases in which OIFP’s civil at-torneys pursued such violators throughcivil litigation are also included.

When persons who are licensed by

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the State commit insurance fraud, ac-tion may be taken by the appropriate li-censing board against the person’s li-cense. Such actions may include thesuspension or revocation of the li-cense, or provide for a voluntary sur-render of the license. Summaries ofcases in which licensing authoritiesand OIFP coordinate their efforts in or-der to effect a licensing sanction arealso included in this Report.

The following tables summarizeOIFP’s 2003 statistics in criminal andcivil actions. Also included is a table oflicensing actions taken by the licensingauthorities against professional licens-

ees who committed insurance fraud.As reflected in the criminal table, in

2003, OIFP opened 474 new criminalinvestigations and filed criminalcharges by Accusation or indictmentagainst 337 defendants. OIFP prosecu-tions during the year resulted in theconviction of 204 defendants. Of the224 defendants sentenced in 2003, 46received jail terms totaling 117 years.Further, a total of over $8 million in res-titution was ordered, including restitu-tion imposed in civil actions.

As indicated in the civil table, OIFPopened 10,100 new civil insurancefraud cases in 2003 and assigned

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New Cases Opened 474

Indictments/Accusations Filed 215Number of Defendants Charged 337

Number of Defendants Convicted 204

Number of Defendants Sentenced 224

Number of Defendants Sentenced to State Prison 26 Total Number of Years 106

Number of Defendants Sentenced to County Jail 20 Total Number of Years 11

Total Criminal Fines Imposed $24,350

Total Criminal Penalties Imposed $34,805

Total Civil Penalties/Fines Imposed in Medicaid Cases $2,813,927

Total Restitution Imposed $8,028,5951

1. This total includes restitution imposed in all OIFP criminal and civil actions.

OIFP Criminal Investigations and Prosecution StatisticsJanuary 1, 2003 - December 31, 2003

5,776 for further investigation. OIFP is-sued 563 Administrative Consent Or-ders totaling $3,312,750 during 2003.OIFP obtained 359 Executed ConsentOrders totaling $1,251,613 in whichsubjects voluntarily admitted commit-ting insurance fraud and agreed to paythe civil fine imposed. In addition, OIFPeffected 168 settlements totaling$519,024 and obtained 397 judgmentstotaling $3,094,195. Further, OIFP civilattorneys filed 284 lawsuits againstFraud Act violators in 2003.

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Civil Investigations Number Dollar AmountNew Cases Opened 10,100 -Number Forwarded for Investigation 5,776 -No Investigation Warranted 4,324 -

Sanctions ImposedInsurance Fraud Letters of Admonition 2,251 -Administrative Consent Orders Issued 563 $3,312,750Administrative Consent Orders Executed 359 $1,251,613Settlements Entered 168 $519,024Judgments Entered 397 $3,094,195Complaints Filed 284 -

Collections (Department of Banking and Insurance)3

Number of OIFP Accounts Paid in Full 562 -Total Amount Received - $1,846,821

2. These statistics comprehensively reflect the number of discrete actions undertakenby the Office of the Insurance Fraud Prosecutor in pursuing civil sanctions againstinsurance fraud violators. It should be noted that, in some instances, more than oneaction was taken against a single violator or for a single violation.

3. These figures were reported by the Department of Banking and Insurance which isresponsible for the Collections function.

OIFP Civil Investigations and Litigation Statistics2

January 1, 2003 - December 31, 2003

OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –Insurance FraudInsurance FraudInsurance FraudInsurance FraudInsurance Fraud

AutoInsurance FraudAltering of VehicleIdentification

State v.Rafael “Bugzy” Ramos,Ceaser Labrego, et al.

Investigators from the Office of theInsurance Fraud Prosecutor (OIFP) ar-rested Rafael “Bugzy” Ramos andCeaser Labrego for engaging in ascheme to sell re-tagged vehicles, in-cluding high end luxury vehicles, insome cases using fraudulently gener-ated automobile documentation. A re-tagged vehicle is one in which the Ve-hicle Identification Number (VIN) hasbeen altered to conceal the identity ofthe rightful owner. Further investigationresulted in a State Grand Jury indict-ment variously charging Rafael“Bugzy” Ramos, Ceaser Labrego, NeilArruda, Hernando Cardoso, RichardPina, Manuel Pinto, and Denise BragaSimao with conspiracy, alterations ofmotor vehicle trademarks and identifi-cation numbers, receiving stolen prop-erty, tampering with public records orinformation, attempted theft and theftby deception. In a separate indictment,Michael Garafalo was charged with re-ceiving stolen property.

On October 9, 2003, Pina pledguilty to theft by deception and was ad-mitted into the Pre-Trial Intervention(PTI) Program conditioned upon per-forming 50 hours of community service.On October 9, 2003, Garafalo pledguilty to receiving stolen property and,on the same date, was admitted into thePTI Program conditioned upon perform-ing 50 hours of community service. OnDecember 15, 2003, Labrego pled guiltyto alterations of motor vehicle trade-marks and identification numbers. He is

scheduled to be sentenced early in2004. The remaining defendants arepending trial.

CriminalUse of “Runners”

State v.Ian Haynes

On April 15, 2003, an Accusationwas filed charging Ian Haynes, an EastOrange police officer, with bribery andcorrupt influence for accepting moneyfrom a “runner” for East Orange PoliceDepartment accident reports. A “run-ner” is a person paid by a licensedmedical service provider to procure pa-tients for a medical practice so that in-surance claims can be submitted forproviding treatment. On May 31, 2003,Haynes was admitted into the PTI Pro-gram conditioned upon completing 50hours of community service.

State v.Cyrano Green

On March 24, 2003, Cyrano Greenwas sentenced to three years in Stateprison after a jury found him guilty ofconspiracy, official bribery, and gifts topublic servants. Green, acting as a“runner,” conspired with an undercoverNewark police officer to provide Greenwith Newark Police Department auto-mobile accident reports in order to so-licit the persons named in those re-ports to become insurance claimants.

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State v.Rajauhn Sharrieff, ShirleyJenkins, Abdul Jenkinsand Bernard Zeigler

On March 31, 2003, a State GrandJury returned an indictment chargingRajauhn Sharrieff, Shirley Jenkins,and Abdul Jenkins with conspiracy,several counts of bribery in officialmatters, and health care claims fraud.In a separate but related indictment,Bernard Zeigler was charged withconspiracy, health care claims fraud,and theft by deception.The first indictment alleged that, be-tween February of 1999 and October of1999, Sharrieff, Shirley Jenkins, andAbdul Jenkins conspired to pay bribes toan East Orange police officer who wasworking in an undercover capacity forOIFP. The undercover investigation fo-cused on allegations that persons wereacting as “runners” on behalf of variousmedical service providers to obtain auto-mobile accident police reports so thatthe persons identified in those police re-ports could be solicited to become pa-tients of the medical service providersand file automobile PIP insuranceclaims. The indictment also alleged thatthe defendants agreed to pay the under-cover East Orange police officer severalhundred dollars for a genuine East Or-ange police automobile accident report,so that the “runners” could coax the per-sons identified in those reports to submitPIP claims. It also specifically allegedthat Sharrieff solicited the undercover po-lice officer to create a fictitious automo-bile accident police report in which sev-eral people were falsely represented tohave been involved in a hit and run auto-mobile accident that purportedly oc-curred on March 11, 1999, in East Or-ange. The accident purportedly involvedfour persons who were passengers inSharrieff’s car, though Sharrieff was notreported as the driver of the car at that

time. As a result of the phony accidentdescribed in the fictitious police report,Colonial Penn Insurance Company paidapproximately $1,563 for alleged prop-erty damage to an automobile. The Statealso alleged that Zeigler settled a phonybodily injury claim, based in part on thephony accident report, for approximately$15,000 with Colonial Penn.

Zeigler pled guilty to conspiracy,health care claims fraud, and theft bydeception and was sentenced on Sep-tember 8, 2003, to two years probationconditioned upon paying $36,563 in res-titution to Colonial Penn Insurance Com-pany and payment of a $3,000 civil in-surance fraud fine. Shirley and AbdulJenkins pled guilty to conspiracy, briberyin official matters, and health careclaims fraud. On October 3, 2003,Shirley Jenkins was sentenced to twoyears probation conditioned on serving90 days in county jail. On the samedate, Abdul Jenkins was sentenced to364 days in county jail as a condition ofthree years probation. The case as toSharrieff is pending trial. Sharrieff wasalso named in a separate indictment aspart of the Allied Trauma investigation.

State v.Dr. Angel Loboand Mercy Lobo

A State Grand Jury charged AngelLobo, M.D., and Mercy Lobo with con-spiracy, health care claims fraud, theftby deception, criminal use of “runners,”and falsification of medical records. Dr.Angel Lobo, a licensed medical serviceprovider, and his office manager, MercyLobo (no relation), operated the medi-cal practice known as Pain Manage-ment Clinic located in Paterson. Theindictment alleged that Dr. Lobo andMercy Lobo paid persons to act as“runners” to procure patients for themedical practice so that PIP insuranceclaims for medical services renderedcould be submitted to Parkway Insur-

ance Company and AIG Claims Ser-vices, Inc. It also alleged that Dr. Loboand Mercy Lobo prepared false patientrecords to reflect that certain healthcare services were rendered whenthose services were not, in fact, ren-dered, so that phony bills could besubmitted to the insurance carriers. Allof the claims which formed the basis ofthe health care claims fraud chargeswere for services rendered to OIFPinvestigators working undercover aspatients treating at the Pain Manage-ment Clinic. Parkway Insurance paidPIP claims totaling approximately$6,481, while AIG Claims Services,Inc., paid PIP claims in the approxi-mate amount of $2,150. On September11, 2003, Angel Lobo pled guilty tohealth care claims fraud and is sched-uled to be sentenced early in 2004. OnOctober 30, 2003, Mercy Lobo pledguilty to health care claims fraud andis also scheduled to be sentencedearly in 2004.

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State v. Michael Baer

A State Grand Jury indicted Dr.Michael Baer for health care claimsfraud, criminal use of “runners,” andtheft by deception. According to theindictment, Dr. Baer, a chiropractorwho owned and operated his own chi-ropractic practice, allegedly submittedfalse PIP insurance claims on behalfof patients who were undercover in-vestigators, to Hanover InsuranceCompany and Parkway InsuranceCompany totaling nearly $20,153. Theindictment also alleged that Dr. Baerknowingly used, solicited, or em-ployed “runners” to procure patientsfor his chiropractic practice. On June17, 2003, Baer pled guilty to healthcare claims fraud and criminal use of“runners.” He is scheduled to besentenced early in 2004. The matterwas also referred to the ChiropracticLicensing Board for appropriatelicensing action.

State v.Mohsen Mosslehi

A State Grand Jury returned anindictment charging Dr. MohsenMosslehi with health care claimsfraud, criminal use of “runners,” andtheft by deception. According to the in-dictment, Dr. Mosslehi, a chiropractorwho owned and operated his own chi-ropractic practice, allegedly submittedfalse PIP insurance claims to ColonialPenn Insurance Company and Park-way Insurance Company totaling ap-proximately $4,363 on behalf of pa-tients who were actually undercoverinvestigators. The indictment also al-leged that Dr. Mosslehi knowingly em-ployed “runners” to procure patientsfor his chiropractic practice. On Octo-ber 2, 2003, following a 14 day jurytrial in Essex County, Mosslehi wasacquitted of the charges. The matter,however, was also referred to the

Chiropractic Licensing Board forappropriate licensing action.

State v.Lt. Jerome F. Bollettieri,Sgt. Thomas G. DiPatri (ret.),Sgt. Philip N. Ferrari (ret.)and Charles Warrington, II

In 2002, a State Grand Jury re-turned an indictment charging formerCamden Police Department Lt.Jerome F. Bollettieri and Sgt. Tho-mas G. DiPatri (ret.) with conspiracy,official misconduct, bribery, andcriminal use of “runners.” At the timeof the conduct alleged in the indict-ment, Bollettieri was the officer incharge of the Camden PoliceDepartment’s Traffic Records Bu-reau. According to the indictment,DiPatri, a retired Camden police of-ficer, illegally obtained police acci-dent reports from Bollettieri by pay-ing him bribes. The indictment alsoalleged that DiPatri obtained the po-lice accident reports to identify per-sons who were in automobile acci-dents in order to solicit prospectivepatients for treatment at AmericanSpinal Care, Inc., (ASC), aCollingswood chiropractic facilitywhich submitted PIP automobile in-surance claims to insurance compa-nies. On August 8, 2003, following asix day bench trial, Thomas DiPatriwas found guilty of all the charges.On October 3, 2003, DiPatri wassentenced to three years in Stateprison. The case as to Bollettieri ispending trial.

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bile insurance companies were billedfor chiropractic treatments that werenever rendered.

The first indictment alleged that,between May 1, 1998 and October 4,2000, Franca DiLisio, a licensed chi-ropractor, arranged staged accidentswith the assistance of Gerard Blancand Rolando Pierre, who acted as a“runner.” It also alleged that the ac-cidents were staged so DiLisio couldtreat the occupants of the vehicles inthe staged accidents for injuries theypurportedly sustained, and then billinsurance carriers for PIP insuranceclaims even though the patients

FraudulentPIP Insurance ClaimsInvolving HealthCare Providers

State v.Franca DiLisio, et al.

On July 30, 2003, a State GrandJury returned two indictments charg-ing a licensed chiropractic physicianand seven other persons variouslywith health care claims fraud, crimi-nal use of “runners,” theft andattempted theft by deception. Onedefendant was also charged withmisconduct by a corporate official.All of the charges relate to allega-tions that the defendants staged ac-cidents for the purpose of submittingphony PIP insurance claims to fiveinsurance carriers, or that automo-

were not injured. The first indictmentfurther alleged that, between May 1,1998 and October 4, 2000, DiLisioand the other defendants submitteda dozen false claims to Allstate In-surance Company, Selective Insur-ance Company, G.U.F.A.C. Insur-ance Company, and Colonial PennInsurance Company for purportedchiropractic treatments on 302 sepa-rate dates for patients who had notappeared for those treatments.Those claims totaled approximately$36,380, of which $3,435 had beenpaid by insurance carriers.

The second indictment chargedMarie Amay, Imaguerite Francois,Mimose Pierre, Joane Amay, andMurielle Francois with health careclaims fraud and attempted theft bydeception for acting as passengersin staged accidents and generating

phony medical treatment claims.DiLisio allegedly submitted 16 PIPinsurance claims for these defen-dants to Allstate Insurance Com-pany, Selective Insurance Company,Colonial Penn Insurance Company,Crawford Insurance Company, andOhio Casualty totaling $65,153.None of the 16 PIP claims were paid.Some of these cases are also pend-ing in civil court and/or arbitration.The criminal cases of all eight defen-dants are awaiting trial.

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State v.Lisa Tsilionis, George Tsilionis,Carl Love, Jr., Rajauhn Sharrieffand Rudolf Hora

On December 11, 2003, a StateGrand Jury returned an indictmentcharging Lisa Tsilionis and herformer husband, George Tsilionis,who were both chiropractors and theowners and operators of AlliedTrauma and Health Care Center,Inc., with conspiracy, health careclaims fraud, theft by deception,money laundering, and misconductby a corporate official. The indict-ment also charged Carl Love, Jr.,and Rajauhn Sharrieff, who operatedEssex Shuttle, Inc., a transportationcompany which purportedly trans-ported patients to and from medicalappointments, with conspiracy,health care claims fraud, theft by de-ception, and misconduct by a corpo-rate official. Another defendant,Rudolf Hora, was charged with con-spiracy. Love was also separatelycharged with unlawful possession ofa weapon.

According to the indictment, be-tween July of 1996 and March of1999, Lisa and George Tsilionis, intheir capacities as owners and op-erators of Allied Trauma, Inc.,fraudulently billed numerous insur-ance companies for chiropractic ser-vices and electro- diagnostic testsknown as Somatosensory EvokedPotentials (SSEP) that they had notprovided. The State also alleged thatthe Tsilionises, through AlliedTrauma, fraudulently billed approxi-mately 30 different insurance carriersover $1.2 million of which approxi-mately $435,000 was paid. The in-dictment further alleged that, be-tween June of 1998 and Decemberof 1998, Love and Sharrieff createda patient transportation businesscalled Essex Shuttle, to disguise il-

legal patient referral fees (known as“runners’ fees”) that Lisa andGeorge Tsilionis paid to Love,Sharrieff, and Hora as purportedtransportation costs.

The indictment also alleged thatLove and Sharrieff, through EssexShuttle, fraudulently billed various in-surance carriers approximately$5,400 for transportation servicesthat were not rendered. The indict-ment alleged that Love, who was thepresident and owner/operator ofEssex Shuttle, Inc., as well as an-other patient transportation corpora-tion operating out of East Orange,used his corporations to solicit pa-tients for Allied Trauma, acting, inessence, as a “runner.” The indict-ment alleged that, while both ofthese businesses were purportedlyincorporated to transport PIP claim-ants to and from treating medicalservice providers, Love actually usedhis corporations to solicit patients forAllied Trauma so that automobile in-surance PIP claims could be submit-ted to insurance companies. Most ofAllied Trauma’s patients were auto-mobile accident insurance claimantswho sought treatment at AlliedTrauma Chiropractic under their au-tomobile insurance PIP coverage.The indictment alleged that Love ac-cepted payments from theTsilionises in return for directing pa-tients to Allied Trauma for treatmentso that false PIP claims could besubmitted to various automobile in-surance companies for diagnostictests and other chiropractic treat-ments and services that were not ac-tually rendered to the patients. LoveCourier, Essex Shuttle, and AlliedTrauma all ceased operations follow-ing the commencement of theState’s investigation in approxi-mately March of 1999.

As part of the joint investigationconducted by OIFP and the Division

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of Criminal Justice’s Civil ForfeitureUnit, bank accounts for Love Cou-rier, Inc., and Essex Shuttle totalingapproximately $2,800 were frozensubject to possible forfeiture. Addi-tionally, a lien was filed on Love’sresidence in West Orange, and hesubsequently filed for bankruptcy.The State also seized and forfeitedthe Tsilionis home in Bergenfield andapproximately $895,000 in bank ac-counts they controlled. All defen-dants are awaiting criminal trials.

Fraudulent AutomobileTheft Claims

State v.Geuris Valdez-Fernandez

On March 14, 2003, GeurisValdez-Fernandez was entered intothe PTI Program for 36 months con-ditioned upon paying restitution toNewark Insurance Company in theamount of $10,154 and a civil insur-ance fraud fine of $4,000. Valdez-Fernandez previously pled guilty toan Accusation charging him withconspiracy. Valdez-Fernandez ad-mitted that, on October 17, 2001, hevoluntarily gave his 1998 ToyotaCamry to another individual for thepurpose of disposing of the vehiclein order to have the insurance com-pany pay off the outstanding loan ob-ligation and to avoid continued auto-mobile payments.

State v.Diane Hughes

On February 24, 2003, aMonmouth County Grand Jury re-turned an indictment charging DianeHughes with theft by deception, tam-pering with public records, and falsi-fying records. The indictment allegedthat, on May 7, 2001, Hughes re-ported to the Eatontown Police De-partment and her insurance com-pany, State Farm, that her 2000Mazda Millenia had been stolenfrom the Monmouth Mall when hercar had actually already been lo-cated by New York City police.Hughes pled guilty to theft by de-ception and was admitted into thePTI Program on July 3, 2003, condi-tioned upon paying restitution in theamount of $20,938 and a $5,000civil insurance fraud fine. She wasalso ordered to perform 75 hours ofcommunity service.

State v.Diana Fonseca

On April 11, 2003, DianaFonseca was sentenced to threeyears probation conditioned uponpaying restitution in the amount of$13,527 to Liberty Mutual, a $5,000civil insurance fraud fine, and com-pleting 100 hours of community ser-vice. Fonseca pled guilty to an Ac-cusation charging her with theft bydeception. Fonseca admitted that,on July 27, 2001, she falsely re-ported her vehicle stolen in order tosubmit a fraudulent stolen vehicleclaim to Liberty Mutual InsuranceCompany. Liberty Mutual paid theclaim totaling $13,130 to Fonsecaand the lien holder. She also admit-ted that she arranged to have an-other person dispose of her vehicleso that she could submit the fraudu-lent insurance claim.

Operation“Give and Go”

On June 18, 2003, OIFP ob-tained 22 criminal indictmentsagainst 38 persons on charges thatthey planned or participated inowner-involved automobile thefts,otherwise known as automobile“give-ups,” in order to collect morethan $790,000 in bogus insuranceclaims. As a result of a complex un-dercover investigation probing phony“owner initiated” automobile “give-up”insurance claims, these individualswere charged variously with con-spiracy, theft by deception, receivingstolen property, tampering with pub-lic records or information, falseswearing, alterations of motor ve-hicle identification numbers, andsimulating a motor vehicle insuranceidentification card.

OIFP initiated this undercover in-vestigation in order to address the in-creasing problem of automobile theftand automobile insurance “give-ups”in North Jersey. OIFP investigators,working undercover, leased a garageon Tonnele Avenue in Jersey Cityand, in the guise of an auto repair fa-cility, spread the word that anyonewho owned or leased a car andwanted to get rid of it to avoid furthercar payments or lease payments, orbecause the car was damaged orneeded expensive repairs, could “giveit up” at the facility or to the facilityoperators. An automobile “give-up” isthe term given by insurance fraudinvestigators to the voluntary trans-fer of an automobile by the owner toanother person who then disposesof the vehicle, often for a cash pay-ment, for the purpose of allowingthe owner to file a false auto insur-ance theft claim with his automo-bile insurance carrier and collect

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insurance money for the phonytheft, or to have his car loan or carlease paid off by the insurance carrier.

In the course of the investigation,State Investigators recovered 46cars and SUVs from several personswho acted as “middlemen” and re-ceived the “give-up” automobilesfrom their owners so that the carscould be falsely reported stolen. Un-dercover State Investigators also re-ceived some vehicles directly fromthe owners themselves. The totalmarket value of all the vehicles re-covered by OIFP investigators ex-ceeded $1 million. More than 32phony automobile insurance theftclaims stemming from the sting weresubmitted to 21 insurance carriers,including First Trenton Indemnity,Ohio Casualty Insurance Company,Allstate Insurance Company, Metro-politan Property and Casualty, NewJersey Manufacturers InsuranceCompany, Progressive InsuranceCompany, Liberty Mutual InsuranceCompany, State Farm InsuranceCompany, Hanover Insurance Com-pany, Prudential Insurance Com-pany, USAA Insurance Company,State and Country Fire InsuranceCompany, AIG Insurance Company,Rutgers Casualty Insurance Com-pany, Travelers Insurance Company,Selective Insurance Company, ErieInsurance Company, Penn NationalInsurance Company, Motors Insur-ance Company, Sompo Japan Insur-ance Company of America, and Uni-versal Underwriters Insurance Com-pany. Carriers paid approximately$791,094 for these phony auto insur-ance theft claims. Another $48,056in insurance claims were not paid ei-ther because the insurance companywas suspicious of the claim or be-cause OIFP’s investigation inter-rupted the claims process. Forty-sixcars obtained by OIFP in the course

of the investigation were returned tothe insurance companies or to the le-gitimate holder of title to the car.Restitution for the amount of claimsmoney paid may be sought from thedefendants in court.

Two of the defendants identifiedduring this undercover investigation,Ryan December and Jason Decem-ber, had been previously arrested onJanuary 12, 2003 by OIFP investiga-tors. Ryan December was chargedwith conspiracy and receiving stolenproperty, and Jason December wascharged with conspiracy. Arrest war-rants were issued for nine of the 38defendants, including Richard Ruiz,Carmen Marchitello, AnthonyMarchitello, Gilberto Pascual, RafaelPadilla, Jason December, JuanNaut, Alex Carvalho, and GuillermoGuzman a/k/a “Junior.” Nineteen ofthe defendants were issued sum-monses. Some of the defendants in-dicted as a result of this undercoveroperation were charged with “re-tag-ging” three vehicles. A “re-tagged”vehicle is a car whose VIN has beenaltered in order to conceal the trueidentity of the car and its owner, aswell as the fact that it has been“given- up,” all to facilitate fraudu-lent auto theft insurance claims.Two of the defendants who were al-legedly involved in automobile re-tagging conduct, Rafael “Bugzy”Ramos and Ceaser Labrego, werepreviously arrested in August of2002 by OIFP investigators andcharged with conspiracy to commitaltering motor vehicle trademarksand conspiracy to commit posses-sion of altered property.

Also, as part of this investigation,three of the defendants charged withreceiving stolen property and simu-lating a motor vehicle insuranceidentification card, pled guilty. OnSeptember 2, 2003, Joaquin

Martinez pled guilty to receiving stolenproperty, namely, a stolen CadillacEscalade. On November 7, 2003, hewas admitted into the PTI Programconditioned upon performing 60 hoursof community service. On November17, 2003, Gilberto Pasqual pled guiltyto receiving stolen property. He isscheduled to be sentenced early in2004. Edward G. Whyte pled guilty toreceiving stolen property on Septem-ber 29, 2003. On November 14, 2003,he was admitted into the PTI Pro-gram conditioned upon performing 60hours of community service.

Whyte was charged with pos-sessing a stolen 2003 MercedesBenz on December 20, 2002 thatwas stolen from a Mercedes Benzdealership located in Plumstead,Pennsylvania, by means of a “keyswap.” A “key swap” theft occurswhen a person, posing as a cus-tomer, enters an automobile dealer-ship and takes a test drive. Duringthe test drive, the genuine ignitionkey is “swapped” for a fake key, andlater the car is stolen by using thegenuine ignition key. Of the nine per-sons for whom arrest warrants wereissued, six were arrested by OIFPinvestigators on June 24, 2003. Thesix persons arrested were RichardRuiz, Carmen Marchitello, AnthonyMarchitello, Jason December,Guillermo Guzman, and Juan Naut.While conducting these arrests,OIFP investigators also arrested LuisFlores, a fugitive from the EssexCounty Sheriff’s Office who was be-ing sought on unrelated charges. OnDecember 5, 2003, GuillermoGuzman pled guilty to the attemptedtheft by deception count of the indict-ment and is scheduled to be sen-tenced early in 2004. Guzman alsopled guilty on December 5, 2003, toan unrelated Accusation which

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State v.Robert Lowery, Carlos Gonzalezand Antonio Tomassini

On August 1, 2003, a MiddlesexCounty Grand Jury returned sepa-rate indictments against three defen-dants involved in an automobile “give-up” scheme. The first indictmentcharged Robert Lowery with con-spiracy, attempted theft by deception,and tampering with public records orinformation. The second indictmentcharged Carlos Gonzalez with con-spiracy and attempted theft by decep-tion, and the third indictment chargedAntonio Tomassini with conspiracyand attempted theft by deception. Theindictments alleged that on January 4,

charged him with attempted theft bydeception. Guzman admitted that onAugust 4, 2001, he reported his 1984Oldsmobile Cutlass stolen inSecaucus. He submitted a theftclaim to Prudential Insurance Com-pany supported by various fraudulentinvoices indicating that he had a$1,000 stereo system and $850worth of rims and tires recently in-stalled in the car. Guzman admittedthat the invoices were phony and thestereo system, rims and tires had notactually been installed. Guzman willalso be sentenced for this matterearly in 2004.

2000, Lowery conspired withTomassini and Gonzalez to dispose ofLowery’s 1988 Chevrolet Corvette, val-ued at approximately $8,000, so thatLowery could file a fraudulent stolenvehicle claim with his insurance com-pany. It is alleged that Gonzalez re-moved the vehicle from Lowery’s placeof business using a flatbed tow truckand gave the keys to the Corvette toTomassini, who subsequently re-turned the keys to Lowery.

According to the indictments, onJanuary 17, 2000, Lowery filed afalse stolen vehicle report with thePerth Amboy Police Department. Itis further alleged that on January19, 2000, Lowery submitted a

fraudulent stolen vehicle insuranceclaim with CNA Insurance Com-pany. On October 16, 2003,Gonzalez was admitted into the PTIProgram conditioned upon payingstandard fines in the amount of$125. The case as to the remainingdefendants is pending trial.

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Defendant Charges Plea Sentence SentenceDate Date

Thomas Wasso Conspiracy - 3rd Degree 8/22/03 11/14/03 (3rd Degree Conspiracy)Theft by Deception - 3rd Degree

2 years probation;$30,220.45 restitution

Luis Trabal Conspiracy - 3rd Degree 9/22/03 11/14/03 (3rd Degree Theft by Deception)Theft by Deception - 3rd DegreeTampering with Public Records 2 years probation;or Information - 3rd Degree $33,723.80 restitution

Nidia Munoz Conspiracy - 3rd Degree 9/30/03 11/21/03 (3rd Degree Tampering withTheft by Deception - 3rd Degree Public Records or Information)Tampering with Public Recordsor Information - 3rd Degree 3 years probation;

$19,526 restitution

Aldemar Palacios Conspiracy - 3rd Degree 10/24/03 12/12/03 (3rd Degree Theft by Deception)Theft by Deception - 3rd DegreeTampering with Public Records 3 years probation; $3,000 civil fine;or Information - 3rd Degree 150 hours community service

Ysrael Tavarez Conspiracy - 3rd Degree 10/17/03 12/12/03 (3rd Degree Attempted Theft by Deception)Attempted Theft by Deception- 3rd Degree Admitted into PTI; $5,000 civil fine;Tampering with Public Records 50 hours community serviceor Information - 3rd Degree

Luigi Andriano Conspiracy - 3rd Degree 10/17/03 12/8/03 (3rd Degree Conspiracy)Theft by Deception - 3rd Degree (Postponed)

Pending sentencing

Renee Perez Conspiracy - 3rd Degree 10/24/03 1/13/04 (3rd Degree Attempted TheftAttempted Theft by Deception by Deception)- 3rd DegreeTampering with Public Records 1 year probation; $250 criminal fineor Information - 3rd Degree

“Give and Go” Guilty Pleas

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Richard Pina Theft by Deception - 3rd Degree 10/9/03 10/9/03 (3rd Degree Theft by Deception)Tampering with Public Recordsor Information - 3rd Degree Admitted into PTI; 50 hours

community service

Michael Garafalo Receiving Stolen Property 10/9/03 10/9/03 (Receiving Stolen Property - 3rd Degree)- 3rd Degree

Admitted into PTI;50 hours community service

Joaquin Martinez Receiving Stolen Property- 3rd DegreeSimulating a Motor Vehicle Insurance 9/2/03 11/7/03 (3rd Degree Receiving Stolen Property)Identification Card - 4th Degree

Admitted into PTI;60 hours community service

Edward G. Whyte Receiving Stolen Property 9/29/03 11/14/03 (Receiving Stolen Property - 3rd Degree)- 3rd Degree

Admitted into PTI; 60 hourscommunity service

Gilberto Pasqual Conspiracy - 3rd Degree 11/17/03 1/16/04 (Receiving Stolen Property - 3rd Degree)Theft by Deception - 3rd DegreeReceiving Stolen Property 3 years State prison - 3rd Degree

Maria A. Mora Conspiracy - 3rd Degree` 11/20/03 1/23/04 (Theft by Deception - 3rd Degree)Theft by Deception - 3rd DegreeTampering with Public Records 5 years probation;or Information - 3rd Degree $11,342.70 restitution

Gary Albanese Conspiracy - 3rd Degree 12/5/03 1/23/04 (Conspiracy - 3rd Degree)Theft by Deception - 3rd Degree

2 years probation; $250 criminalfine; full restitution

Guillermo Guzman Conspiracy - 3rd Degree 12/5/03 1/23/04 (Attempted Theft by DeceptionAttempted Theft by Deception - 3rd Degree) - 3rd Degree

2 years probation; $200 criminal fine

Defendant Charges Plea Sentence SentenceDate Date


State v.Omar K. Gordon

On August 5, 2003, a HudsonCounty Grand Jury charged Omar K.Gordon with attempted theft by de-ception, tampering with publicrecords or information, and falsifyingrecords. According to the indictment,on August 24, 2001, Omar Gordonreported to the Jersey City PoliceDepartment that his 1996 NissanMaxima had been stolen from theJersey City Pep Boys parking lot.The indictment also alleged that onSeptember 24, 2001, Gordon sub-mitted an Affidavit of Vehicle Theft toState Farm Insurance Companyclaiming that he last saw his vehicleon August 23, 2001, in the Pep Boysparking lot and reported it missing onAugust 24, 2001. The State intendsto prove that, because New York CityPolice Department Detective Ken-neth DeStefano recovered Gordon’svehicle in the Bronx, New York, onAugust 23, 2001, it could not havebeen in the Pep Boys parking lot asreported by Gordon. His case ispending trial.

State v.Joseph Cirino, Jr.

On August 18, 2003, JosephCirino pled guilty to an Accusationcharging him with arson of propertyfor the purpose of collecting insur-ance proceeds. Cirino admitted that,on November 2, 2002, he met a per-son identified as Robert Halpin in theWalMart parking lot located in Berlin,New Jersey, and gave him his 2000Honda Accord along with $500, inorder for Halpin to take Cirino’s carto an undisclosed location and set iton fire. Cirino planned to discontinuehis lease payments and file a fraudu-lent insurance claim. Cirino admittedthat he reported the vehicle stolenand submitted a fraudulent claim to

his insurance carrier, Allstate Insur-ance Company. On October 31, 2003,Cirino was sentenced to two yearsprobation and ordered to paya $3,500 civil insurance fraud fine. OnDecember 10, 2003, a State GrandJury returned an indictment chargingHalpin with conspiracy, arson for hire,aggravated arson, arson to collect in-surance proceeds, and theft by de-ception. Halpin’s case is pending trial.

State v.Husam A. Hamdan

On September 15, 2003,Husam Hamdan pled guilty to anAccusation charging him with con-spiracy. Hamdan admitted that onJune 1, 2003, he offered to pay aco-conspirator to take Hamdan’s1994 Mazda 626 and dispose of itso that he could file a fraudulentstolen vehicle insurance claim withAmerican International InsuranceCompany of New Jersey. Hamdanalso admitted that after he turnedover the vehicle to his co-conspira-tor, he filed a stolen vehicle reportwith the East Orange Police Depart-ment. On November 21, 2003,Hamdan was admitted into the PTIProgram conditioned on performing50 hours of community service.

State v.Harold Davis

On March 24, 2003, HaroldDavis pled guilty to an Accusationcharging him with attempted theft bydeception. Davis, an Atlantic City ca-sino employee, admitted that, onSeptember 27, 2001, he submitted afalse automobile insurance claim toRutgers Casualty, claiming that hehad driven his car into New York Cityon September 11, 2001, and that itsustained damage from falling debrisfrom the terrorist attacks on theWorld Trade Center Towers. The in-

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vestigation revealed that Davis and hiscar were at his place of employmentin Atlantic City on September 11,2001, and, therefore, that his carcould not have sustained damage inNew York City as he claimed. Davisadmitted that the damage to his ve-hicle was caused by highway debris.Davis was admitted into the PTI Pro-gram on May 1, 2003, conditionedupon performing 75 hours of com-munity service and paying a $2,500civil penalty.

State v.Donald Bracco

Donald Bracco pled guilty to anAccusation charging him with tam-pering with public records or infor-mation. Bracco admitted that, on No-vember 30, 2001, he submitted afalse report with the Old Bridge Po-lice Department claiming that his2001 Ford Explorer, which he wasleasing from Ford Motor Credit, hadbeen stolen. Bracco knew that thevehicle had not been stolen, but, infact, had been abandoned inMarlboro, where it had been recov-ered by the Marlboro Police Depart-ment. On March 24, 2003, Braccowas sentenced to three years inState prison, ordered to pay restitu-tion in the amount of $584, andagreed to pay a $5,000 civil insur-ance fraud fine.

State v.Ernest Davis

On February 20, 2003, ErnestDavis pled guilty to an Accusationcharging him with attempted theft bydeception. Davis admitted that, onDecember 5, 2001, he filed a falseautomobile theft claim with his insur-ance company, Liberty Mutual,claiming that his 1998 Toyota Avalonhad been stolen on November 26,2001, when Trenton police foundDavis’ Toyota in flames on Broad

Street in Trenton. It was determinedthat there was no evidence that thevehicle had been stolen and that thefire was the result of arson. Becauseof the suspicious nature of Davis’theft claim, Liberty Mutual denied theclaim and referred it to OIFP. Daviswas sentenced to two years proba-tion conditioned upon paying a$3,000 civil insurance fraud fine.

State v.Anna M. White

A Cumberland County GrandJury returned an indictment chargingAnna M. White with falsifyingrecords. According to the indictment,on June 2, 2001, White submitted afalsified Affidavit of Theft for her1992 Dodge Caravan to Ohio Casu-alty Insurance Company in conjunc-tion with a fraudulent insuranceclaim. White had, in fact, loaned hervan to another person who was theninvolved in an accident. Whitewanted the insurance carrier to be-lieve her car was damaged after itwas purportedly stolen. On February3, 2003, White pled guilty to falsify-ing records. On April 25, 2003, shewas admitted into the PTI Programconditioned upon performing 30hours of community service.

State v.Trisha Townsend

Trisha Townsend was charged bya Mercer County Grand Jury with at-tempted theft by deception. Accordingto the indictment, on May 26, 2001,Townsend falsely reported to the Tren-ton Police Department that her 1994Dodge Intrepid had been stolen andfiled a fraudulent auto theft claim withher insurance company, New JerseyManufacturers Insurance Company,four days later. On January 27, 2003,Townsend was admitted into the PTIProgram conditioned upon payment ofa $5,000 civil insurance fraud fine.

State v.

On March 18, 2003, a BergenCounty Grand Jury returned an in-dictment charging with attempted theft by deception.According to the indictment, on Feb-ruary 1, 2001, owner of the

a Paramus autorepair shop, reported to the ParamusPolice Department that his 1992Mercury Grand Marquis had beenstolen the day before from his placeof business. On the same date,

allegedly submitted a ve-hicle theft claim to the Motor Club ofAmerica (MCA) in the approximateamount of $4,325. MCA denied theclaim and referred the matter toOIFP for investigation. The State in-tends to prove that the 1992 MercuryGrand Marquis which alleg-edly reported stolen on February 1,2001, was actually recovered by theNew York Police Department onJanuary 28, 2001, in New York City,thus casting doubt on the veracity of

report. case isscheduled for trial early in 2004.

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State v.Angel Rodrigo

On February 28, 2003, AngelRodrigo pled guilty to an Accusationcharging him with falsifying or tam-pering with records. Rodrigo admit-ted that on September 11, 2001, hefraudulently submitted an Affidavit ofVehicle Theft claim to New JerseyCitizens United Reciprocal Ex-change, claiming that his 2000Mercedes-Benz C280 had been sto-len on September 2, 2001. The in-vestigation revealed that the vehiclehad been recovered by the HillsideTownship Police Department on Au-gust 28, 2001, four days prior to thetime Rodrigo reported last seeing theMercedes Benz. On May 16, 2003,Rodrigo was sentenced to threeyears probation conditioned uponcompleting 100 hours of communityservice and paying restitution in theamount of $2,279 as well as a$2,500 civil insurance fraud fine.

State v.Wendy Montalvo

On April 1, 2003, WendyMontalvo pled guilty to an Accusa-tion charging her with tampering withpublic records or information.Montalvo admitted that, on May 3,2002, she falsely reported to theKearny Police Department that her2001 Honda Civic had been stolen inorder to submit a fraudulent stolenvehicle theft claim to Liberty MutualInsurance Company. On May 14,2003, Montalvo was admitted intothe PTI Program conditioned uponcompleting 25 hours of communityservice and paying a $5,000 civil in-surance fraud fine.

State v.Michael Scarpa

On May 13, 2003, a HudsonCounty Grand Jury returned an indict-ment charging Michael Scarpa withattempted theft by deception, tamper-ing with public records or information,and falsifying records. According tothe indictment, on December 22,2001, Scarpa reported to the JerseyCity Police Department that his 1992Chevrolet Suburban had been stolenfrom the Hudson Mall in Jersey City.On December 26, 2001, Scarpa sub-mitted a stolen automobile claim withState Farm Insurance Company for$11,103, the value of the insured carat the time of the claim. State Farmdenied the claim and referred the mat-ter to OIFP for investigation. The OIFPinvestigation revealed that, unbe-knownst to Scarpa, on December 18,2001, four days prior to Scarpa’s sto-len vehicle report to the Jersey CityPolice Department, his 1992 ChevroletSuburban had been “tagged” in theBronx, New York, as a “derelict” ve-hicle and, on December 19, 2001, theSuburban was removed and crushedby the New York City Sanitation De-partment. Scarpa pled guilty to at-tempted theft by deception and, onNovember 7, 2003, he was sen-tenced to one year probation with theconditions that he pay a $5,000 civilinsurance fraud fine and perform 100hours of community service.

State v.

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Jorge L. VelazquezOn June 19, 2003 Jorge

Velazquez pled guilty to an Accusa-tion charging him with tamperingwith public records or information.Velazquez admitted that, on Decem-ber 25, 2002, he falsely reported tothe Elizabeth Police Department thathis 1999 Ford Contour had been sto-len so that he could submit a falseauto insurance theft claim. He admit-ted that he had actually been in-volved in a hit-and-run accident inLinden involving a parked car, fledthe scene and abandoned the car inanother location. He filed a vehicletheft insurance claim with PrudentialInsurance Company, but subse-quently withdrew the insuranceclaim. On August 15, 2003,Velazquez was admitted into the PTIProgram conditioned upon perform-ing 60 hours of community serviceand paying a $5,000 civil insurancefraud fine.

State v.Mariusz Kwiatkowski

On June 30, 2003, MariuszKwiatkowski pled guilty to an Accu-sation charging him with tamperingwith public records or information.Kwiatkowski admitted that, on Janu-ary 11, 2003, he lost control of his2003 Nissan, hitting a parked car.Following the accident, Kwiatkowskifled the scene. Kwiatkowski falselyreported to the Lawrence Police De-partment that his Nissan had beenstolen and filed a fraudulent automo-bile theft claim with Liberty Mutual In-surance Company to cover the dam-age done to the car in the accident.On September 17, 2003,Kwiatkowski was admitted into thePTI Program conditioned upon per-forming 75 hours of community ser-vice and paying a $5,000 civil insur-ance fraud fine.

State v.Julio Arenas

On May 13, 2003, a complaintsummons was issued to Julio Are-nas charging him with attemptedtheft by deception. The complaint al-leged that in December of 2001, Are-nas falsely reported his 1998Cadillac Catera stolen to the NewarkPolice Department and subsequentlyfiled a phony vehicle theft insuranceclaim with Liberty Mutual. Arenassubsequently admitted that theCadillac had not been stolen, butthat he had voluntarily destroyed thevehicle by setting it on fire, as part ofa scheme to steal insurance moneyfrom Liberty Mutual and avoid furtherexpensive car payments. Liberty Mu-tual denied the claim. On June 24,2003, Arenas pled guilty to an Accu-sation charging him with the crime.He was admitted into the PTI Pro-gram on August 15, 2003, condi-tioned upon performing 50 hours ofcommunity service.

State v.Robert E. Smith

A Burlington County Grand Juryreturned an indictment chargingRobert E. Smith with theft by decep-tion, unsworn falsification to authori-ties, and falsifying or tampering withrecords. According to the indictment,sometime between October 14, 1999and November 22, 1999, Smith re-ported to the Moorestown Police De-partment that his former wife’s 1994Saab 900 had been stolen from theMoorestown Mall parking lot on Oc-tober 14, 1999. The indictment fur-ther alleged that, on October 26,1999, Smith signed and submittedan affidavit of theft to Allstate Insur-ance Company falsely stating thatthe vehicle had been stolen from theMoorestown Mall, causing Allstate topay approximately $12,000 on the

theft claim. However, OIFP’s investi-gation revealed that two weeks prior tothe purported October 14, 1999 theftdate, the car had been involved in apolice chase and abandoned in theCity of Camden. The investigation fur-ther revealed that the Camden PoliceDepartment impounded the car andthat it was towed to a garage inPennsauken where it remained untilJune 18, 2001. On July 24, 2003,Smith pled guilty to theft by decep-tion and was sentenced to two yearsprobation, conditioned on serving 64days in county jail, and payment of$9,000 in restitution to the Allstate In-surance Company. He was also or-dered to pay a $5,000 civil insurancefraud fine.

State v.James Good

On October 30, 2003, JamesGood was charged by an EssexCounty Grand Jury with falsifyingrecords. According to the indictment,on January 10, 2002, Good filed astolen vehicle claim with his insur-ance carrier, Liberty Mutual Insur-ance Company, stating that his 1989Subaru had been stolen, eventhough he knew that the vehicle hadnot been stolen and that he was notentitled to the insurance money. TheState intends to prove that, on Octo-ber 12, 2001, Good’s 1989 Subaruwas involved in an automobile acci-dent in Newark in which the driverand a passenger fled the scene. It isalleged that Good submitted thefalse claim with Liberty Mutual in or-der to cover up for the person drivingthe car because she had wrongfullyleft the scene of the accident. Hiscase is pending trial.State v.

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Jorge A. SalamancaOn October 28, 2003, Jorge

Salamanca pled guilty to an Accusa-tion charging him with tamperingwith public records or information.Salamanca admitted that, on June11, 2002, he falsely reported to theElizabeth Police Department that his1996 Acura had been stolen. He alsoadmitted that he filed a fraudulentstolen car insurance claim withAllstate Insurance. He representedto Allstate that he last saw his ve-hicle at 5:30 p.m. on June 9, 2002, inElizabeth, New Jersey. However, thevehicle was found at 1:30 a.m. onJune 10, 2002, in Miami, Florida,which would have made it impos-sible for him to have seen his car atthe time and date in Elizabeth thathe claimed. Allstate denied the claimand referred the matter to OIFP.Salamanca is scheduled to be sen-tenced early in 2004.

State v.Lojza Gruevski

On October 17, 2003, LojzaGruevski pled guilty to an Accusa-tion charging her with attemptedtheft by deception. Gruevski admit-ted that, on May 4, 2001, she falselyreported to Allstate Insurance Com-pany that her 1995 Nissan Path-finder had been stolen the previousday in New York City, in order toconceal the fact that her uninsuredson had been driving the car andwas involved in an automobile acci-dent in New York City. Allstate de-nied the claim and referred the mat-ter to OIFP for investigation.Gruevski was admitted into the PTIProgram conditioned on performing25 hours of community service.

State v.

Martino A. CartierOn October 14, 2003, Martino

Cartier pled guilty to an Accusationcharging him with theft by deception.Cartier admitted that, in Septemberof 2001, he brought his 2000Chrysler Sebring to a body shop inPhiladelphia for repairs. WhenCartier was unable to pay the re-maining mechanic’s lien on the ve-hicle, he conspired with the bodyshop repair man to abandon the carat Penn Station in Philadelphia.Cartier then falsely reported his carstolen to Allstate Insurance Com-pany, which paid the lien holder$19,370. On December 1, 2003,Cartier was admitted into the PTIProgram conditioned on paying resti-tution in the amount of $19,327.

State v.Modesta Vendittoli

On December 9, 2003, a StateGrand Jury returned an indictmentcharging Modesta Vendittoli with at-tempted theft by deception and tam-pering. According to the indictment,on January 28, 2002, Vendittoli re-ported to the Secaucus Police De-partment that her 1999 Acura hadbeen stolen from the HarmonMeadow Plaza parking lot inSecaucus while she was insideshopping. Allegedly, Vendittoli alsoreported the purported theft to her in-surance carrier, First Trenton Indem-nity Insurance Company. The Stateintends to prove that Vendittoli’sAcura had, in fact, been impoundedby the Jersey City Police Departmenton January 19, 2002, nine days priorto the reported theft in Secaucus.Vendittoli’s case is pending trial.

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Other FraudulentAutomobile RelatedInsurance Claims

State v.Narenda Solanki

Narenda Solanki pled guilty in2002 to an Accusation charging himwith falsifying records. Solanki admit-ted that, on May 29, 1998, he falselyreported to the North Brunswick Po-lice Department that his car hadbeen burglarized and that approxi-mately $8,000 in cash and gift itemswere stolen from the vehicle. Solankialso admitted that he made a theftclaim to State Farm Insurance Com-pany in the amount of $8,000 and, inorder to support his claim, submittedphony receipts that were provided tohim by Timetron Watch Company lo-cated in Edison. On March 28, 2003,Solanki was admitted into the PTIProgram and ordered to pay a$5,000 civil insurance fraud fine.The investigation is continuing andfurther civil or criminal insurancefraud penalties against other per-sons who may have assistedSolanki are pending.

State v.Alloy Johnson

On January 2, 2003, a MiddlesexCounty Grand Jury handed up an in-dictment charging Alloy Johnson withtheft by deception and forgery. Ac-cording to the indictment, on January15, 2000, Johnson, without authori-zation, cashed and kept for himselfthe proceeds of a New Jersey Manu-facturers Insurance Company settle-ment check in the amount of $2,173by forging the endorsement signa-ture of Sean Caposella, Vice-Presi-dent of Jefferson Loan Company.The settlement check was issued byNew Jersey Manufacturers and

made payable to Johnson andJefferson Loan Company as a resultof a vehicle theft claim submitted byJohnson in November 1999, in whichhe claimed his 1990 Acura had beenstolen. Johnson was supposed toendorse the check over to JeffersonLoan Company to pay the balance ofthe loan that Johnson owed on theAcura. Instead, Johnson cashed thecheck and kept the money for hisown use. On June 17, 2003,Johnson pled guilty to uttering aforged document and on September4, 2003, he was sentenced to threeyears probation conditioned upon pay-ing restitution to the Jefferson LoanCompany in the amount of $2,173.

State v. Daniel Pascuite

On March 12, 2003, DanielPascuite pled guilty to an Accusationcharging him with attempted theft bydeception. Pascuite admitted that, onDecember 16, 2000, he falsely re-ported to Clarendon National Insur-ance Company that the rims andtires from his 1999 Chevrolet Cor-vette had been stolen. He also ad-mitted that, on May 10, 2001, hesubmitted altered receipts to the in-surance company in order to stealclaim money to which he was not en-titled. On July 16, 2003, Pasciutewas admitted into the PTI Programwith the condition that he perform 50hours of community service.

State v.Peter Mangiola

On February 10, 2003, PeterMangiola pled guilty to an Accusa-tion charging him with attemptedtheft by deception. Mangiola admit-ted that, on October 17, 1996, hefraudulently reported to General Ac-cident Insurance Company that sev-eral items, including a Nikon cameraand a pair of Ray Ban sunglasses,had been stolen from his automobile.Mangiola submitted two fraudulentcredit card receipts as proof of thevalue of the camera and sunglassesand General Accident paid his claimin the amount of $1,277. Mangiolaalso admitted that, on May 5, 1999,he submitted the same two fraudu-lent receipts to Hanover InsuranceCompany, reporting that the sameitems, along with clothing and com-puter equipment valued at $5,921,were stolen from his car. Hanover

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denied the claim and referred the caseto OIFP. On May 2, 2003, Mangiolawas sentenced to two years probationconditioned upon paying $1,278 inrestitution to the insurance company.He was also ordered to pay a $10,000civil insurance fraud fine.

State v.Zurab Tandilashvili

On November 21, 2003, ZurabTandilashvili pled guilty to an Accu-sation charging him with forgery.Tandilashvili admitted that, on No-vember 1, 2001, he submitted falsegarage rental and car rental receiptstotaling $3,450 in support of an auto-mobile insurance liability claim toAllstate Insurance Company. The in-surance claim related to an automo-bile accident which occurred on Au-gust 14, 2001, in New York City inwhich Tandilashvili’s vehicle wasstruck by an Allstate insured vehicle.On November 21, 2003, Tandilashviliwas admitted into the PTI Programconditioned upon performing 50 hoursof community service and paying acivil insurance fraud fine in theamount of $5,000.

State v.Pretam R. Parsam

On April 17, 2003, PretamParsam pled guilty to an Accusationcharging him with attempted theft bydeception. Parsam admitted that, onJune 24, 2002, he falsely reportedthe attempted theft of his 1993Honda Accord to the Morris Town-ship Police Department. Parsamalso admitted that, on July 17, 2002,he falsely reported to the MorrisTownship Police Department that aSony television-stereo combo valuedat $1,244 had been stolen at thetime of the attempted theft of his au-tomobile. Parsam presented a phony

store receipt to a Morris Township po-lice officer in support of his claim thatthe television was stolen. Parsamsubsequently submitted an insuranceclaim to Liberty Mutual InsuranceCompany with the intent to defraudthe insurance company into replacingthe television and repairing damage tohis vehicle allegedly sustained in theattempted theft. On May 30, 2003,Parsam was admitted into the PTIProgram conditioned upon completing50 hours of community service andpaying a $1,500 civil insurancefraud fine.

State v.Michael Marchevsky

On October 22, 2003, MichaelMarchevsky was admitted into thePTI Program conditioned upon per-forming 100 hours of community ser-vice and paying a $2,500 civil insur-ance fraud fine after he pled guilty toan Accusation charging him with at-tempted theft by deception. In July of2002, Marchevsky’s 2000 Ford F150pick-up truck was burglarized and awindow shattered. Marchevskyclaimed that several items valued atover $4,000, including speakers anda laptop computer, had been stolenfrom his truck. Marchevsky subse-quently filed a loss of property insur-ance claim with Selective InsuranceCompany of America in the approxi-mate amount of $4,980. Marchevskyadmitted that he submitted a phonyreceipt from AVIV Electronics in sup-port of his claim and that, in fact, hehad not suffered the loss as claimed.

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Personal InjuryClaims Adjuster Fraud

State v.Joseph DeGregorio

A State Grand Jury returned anindictment in 2001 charging JosephDeGregorio with theft by unlawfultaking. The indictment alleged thatDeGregorio, who worked as an ad-juster/paralegal for personal injurylawyers, misappropriated approxi-mately $87,000 in insurance claimsettlement checks from variousclaimants who were clients of the lawfirm that employed him. The settle-ment checks were deposited intoDeGregorio’s bank account whichwas in the name of JRD Adjusting, acorporation he created. Following in-dictment, DeGregorio fled to Floridawhere investigators from OIFP ar-rested him. DeGregorio pled guilty totheft by deception and, on Septem-ber 19, 2003, he was sentenced tofour years in State prison and or-dered to pay restitution in theamount of $102,000.

ReceivingStolen Property

State v.Thomas Robinson, David Levineand Robert VonSee

On April 1, 2003, ThomasRobinson was charged by a PassaicCounty Grand Jury with conspiracyand receiving stolen property. Alsonamed in a separate but related in-dictment were David Levine andRobert VonSee, who were chargedwith conspiracy and theft by decep-tion. The indictment againstRobinson alleged that, betweenJune of 1997 and January of 1999,Robinson provided stolen cars toFrank Thomas Holgate who owned

and operated Best Buys Auto Partsand Cars in Cedar Grove. Some of thestolen cars were dismantled and theparts sold. False insurance claimswere submitted with respect to someof the stolen cars. Among the stolenvehicles supplied by Robinson were a1992 Ford valued at approximately$10,000, a 1995 Dodge valued at ap-proximately $14,425, a 1995 Hondavalued at approximately $13,775, a1990 Mazda valued at approximately$6,500, a 1990 Toyota valued at ap-proximately $9,725, a 1991 Toyotavalued at approximately $7,825, a1994 Toyota valued at $15,750, a1995 Toyota valued at approxi-mately $22,725, and a 1997Volkswagen valued at approxi-mately $18,000. Holgate pled guiltyto receiving stolen property and, onOctober 31, 2003, was sentenced tofour years probation conditionedupon serving 275 days in countyjail. Holgate’s restitution will be de-termined by the Court.

Robinson pled guilty to con-spiracy and receiving stolen propertyand on October 31, 2003, was sen-tenced to five years probation condi-tioned upon serving 364 days incounty jail. Robinson was also or-dered to pay $24,000 in restitution.

The indictment charging Levineand VonSee alleged that, betweenAugust 11, 1998 and October 14,1998, VonSee “gave up” his 1990Mercedes Benz to Levine who thenprovided the vehicle to Holgate.Levine assisted VonSee in falsely re-porting his 1990 Mercedes stolen.Levine also allegedly falsely reportedthe Mercedes stolen to the WaynePolice Department. VonSee filed a

fraudulent auto theft insurance claimwith First Trenton Indemnity InsuranceCompany which paid $31,518. OnMay 19, 2003, VonSee pled guilty tothe charges and was admitted intothe PTI Program conditioned uponcompleting 75 hours of communityservice and paying $27,669 in restitu-tion to First Trenton Indemnity. OnJune 9, 2003, Levine pled guilty toconspiracy and was admitted into thePTI Program conditioned upon com-pleting 75 hours of community ser-vice.

State v.Artan Rosania

On January 31, 2003, ArtanRosania was sentenced to threeyears in State prison following hisguilty plea to receiving stolen prop-erty. The charges related to the factthat Rosania, as a salesman forNewton Motor Sports, sold car keysfor luxury automobiles to under-cover State Investigators so thecars could be stolen. OIFP investi-gators along with Organized Crimeand Racketeering Bureau investiga-tors in the Division of Criminal Jus-tice investigated the case.State v.

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Andrzej DomanskiOn June 12, 2003, Andrzej

Domanski pled guilty to an Accusa-tion charging him with receiving sto-len property. Domanski admittedthat, on February 20, 2003, he tookpossession of a 2001 BMW X5 auto-mobile for compensation, knowingthe car had been falsely reportedstolen in East Orange two days ear-lier. On July 18, 2003, Domanskiwas sentenced to two years proba-tion, receiving credit for two daysserved in county jail.

State v.M. M.

On October 2, 2003, OIFP inves-tigators executed a search warrantand arrested a suspect known in theinvestigation as M.M. Numerous carsand car parts were seized during thesearch, suggestive of the operationof a “chop shop” and probable auto-mobile insurance fraud. M.M. wascharged with receiving stolen prop-erty, dealing in stolen property, andcertain alterations of motor vehicleidentification numbers. Bail was setat $50,000 with a 10% cash option.The identity of M.M. has not been re-leased to preserve the integrity ofOIFP’s ongoing investigation.

Staged and

Fictitious Accidents

State v.Anhuar Bandy,Alejandro Ventura, Elvin Castillo,Raynaldo Cuevas, Cesar Caba,Victor Almonte, et al.

The prosecution of this large-scale staged accident ring ad-vanced significantly in 2003.Twenty-eight persons were namedin ten separate State Grand Jury in-dictments in 2002 charging themvariously with racketeering, con-spiracy, health care claims fraud, at-tempted theft and theft by decep-tion, use of a 17 year old or youngerto commit a criminal offense, andpossession of a weapon without apermit. All of the charges relate toallegations that the defendants par-ticipated in phony automobile acci-dents in and around Union Countyto submit false insurance claims.

The main indictment in this casecharged racketeering and relatedcrimes, alleging that Anhuar Bandy,who owned, controlled, or operatedas the chief corporate officer of sixNorth Jersey chiropractic clinics, andAlejandro Ventura, Elvin Castillo,Raynaldo Cuevas, Cesar Caba andVictor Almonte, all of whom were as-sociated with Anhuar Bandy or theclinics, allegedly fabricated eightphony automobile accidents. It alsoalleged that, as a result of theseeight phony automobile accidents,claimants submitted PIP insuranceclaims in excess of $331,000 to sev-eral insurance companies. Addition-ally, the indictment alleged that in-surance claims in excess of $2 mil-lion were also submitted in conjunc-tion with more than 90 other phonyaccidents. According to the indict-ment, the accidents were con-structed by obtaining cars, solicitingdrivers and passengers, faking acci-

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dents, and then sending the occu-pants of the cars to treat at chiro-practic clinics in order to submit thefraudulent insurance PIP claims. Aspart of the conspiracy to constructphony accidents, the State allegedthat Ventura, Castillo, Cuevas, Caba,and Almonte acted as “runners” andrecruited persons to participate in thephony automobile accidents. TheState also alleged that the personswho participated in the phony acci-dents became patients at several ofthe Bandy owned, controlled, or op-erated chiropractic clinics, as well asat other medical service provider of-fices, even though they were not hurtin the phony accidents. The indict-ment also alleged that the “runners”were sometimes known as “con-structors” because they allegedlyconstructed these automobile acci-dents. The other indictmentscharged the remaining 22 defen-dants for their participation in theeight phony accidents as passen-gers, drivers and/or claimants.These 22 defendants were namedbased on their participation as pas-sengers, vehicle operators, and in-surance claimants treating at variouschiropractic clinics in order to submitinsurance claims as part of the con-spiracies involving these phony auto-mobile accidents. The State furtheralleged that most of the claim moneywas paid to Bandy owned, operated,or controlled chiropractic clinics. Thevictimized insurance companies in-cluded Allstate Insurance Company,Kemper Insurance Company, MDA/Newark Insurance Company, Pru-dential Insurance Company, Repub-lic Western Insurance Company (U-Haul of Arizona), Selective InsuranceCompany, Sentry Insurance Com-pany, State Farm Insurance Com-

pany, Bayside Casualty, ClarendonNational, Continental Insurance,Farm Family Insurance Company,Liberty Mutual Insurance Company,Maryland Insurance Company, theMoxon Company, National Conti-nental Progressive, National Gen-eral Insurance Company, N.J. Cure,Ohio Casualty Insurance Company,Parkway Insurance, ProgressiveCasualty, Red Oak Insurance Com-pany, United States Automobile As-sociation (USAA), and New JerseyManufacturers Insurance Company.

During calendar year 2003, threeof the six indicted racketeers pledguilty to conspiracy to commit rack-eteering and face prison sentences.Another defendant also pled guilty tohealth care claims fraud and faces aprison sentence. To date, approxi-mately 24 of the 28 indicted defen-dants charged with participating inthe ring have pled guilty.

State v.Dannie Campbell, et al.

On March 19, 2003, a StateGrand Jury returned three indict-ments charging Dannie Campbelland ten other defendants with con-spiracy, health care claims fraud,and attempted theft by deception.According to the indictments, be-tween July of 1997 and March of1999, Dannie Campbell master-minded two fictitious automobile ac-cidents involving other co-conspira-tors in order to have the co-conspira-tors treat for injuries purportedly sus-tained in the phony accidents andsubmit Personal Injury Protection(PIP) insurance claims to an insur-ance company. The State allegesthat the first phony automobile acci-dent planned by Campbell tookplace on July 24, 1997, in Hillside,involving co-defendants George Holly,Jr., Shaheen Johnson, Nathaniel

Jones, and Rashonda Harris, all ofwhom claimed to have sustained inju-ries requiring medical treatment. PIPinsurance claims of approximately$47,700 were submitted to KeystoneInsurance Company/AAA Mid-AtlanticInsurance Company under Holly’s au-tomobile insurance policy for this pur-ported accident. The State further al-leges that the second phony accidentplanned by Campbell took place onSeptember 16, 1998 in Newark involv-ing co-defendants Robert PaulMitchnera/k/a “Shaboor,” Chad Watson,Ramil Robinson, Duane Smith,Monesha Gray, and Deborah Mathisand that they also submitted phonyPIP insurance claims to Keystone In-surance Company/AAA Mid-AtlanticInsurance Company totaling approxi-mately $42,950. In both cases, Key-stone Insurance Company/AAA Mid-Atlantic Insurance Company becamesuspicious of the claims, denied pay-ment, and referred the matters toOIFP. On October 24, 2003,Campbell failed to appear in Courtand a bench warrant was issued forhis arrest. The cases as to theother defendants are pending trial.State v.Ali Harvey, Roy Bailey

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On March 7, 2003, Rene Obredorwas sentenced to one year probationconditioned upon completing 50 hoursof community service and paying a$750 criminal fine. Obredor had pledguilty to an Accusation charging himwith attempted theft by deception, ad-mitting that he caused a purportedGlenwood Police Department automo-bile accident report to be falsified soas to reflect that, on or about February11, 1999, he was injured in an auto-mobile accident. Obredor also admit-ted that he used the false police acci-dent report to support an automobileinsurance PIP claim which was sub-mitted to First Trenton Indemnity In-surance Company and New JerseyManufacturers Insurance Company,along with several other falsified claimdocuments. At his guilty plea hearing,Obredor admitted that he soughtmedical treatments for purported in-juries arising from the accident, eventhough he was not really injured inan automobile accident as he hadclaimed to the insurance companies.The insurance companies deniedfraudulent PIP claims of approxi-mately $5,000 and referred the casefor investigation.

State v.Yvonne Blakney, et al.

Loreen Blakney falsely reportedto the Camden Police Departmenton August 9, 1997, that her vehiclewas struck by an unidentified hit-and-run driver while she was driving.She also claimed that LareenBlakney-Reed, Loreen’s twin sister;Yvonne Blakney, Lareen’s daughter;and Danielle Miller, a friend, werepassengers in the vehicle. Followingthe falsely reported accident, they re-ceived treatment from medical ser-vice providers, causing General Ac-cident Insurance Company to payPIP medical payments totaling over$47,000. All four defendants pled

guilty to charges arising out of this il-licit scheme. In November of 2002,Lareen Blakney-Reed was sen-tenced to 18 months probation andordered to pay $12,041 in restitution,while Danielle Miller was sentencedto one year probation and ordered topay $9,143 in restitution. On Decem-ber 13, 2002, Loreen Blakney wassentenced to three years probationand ordered to pay $15,916 in resti-tution. On January 31, 2003, YvonneBlakney was sentenced to two yearsprobation conditioned on paying$10,634 in restitution to General Ac-cident Insurance Company and serv-ing 100 hours of community service.

State v.Robin Ellison, et al.

A Burlington County Grand Juryreturned an indictment in 2002charging Robin Ellison, DeniseGaines, Patricia Oglesby, andDeborah Thomas with conspiracy,health care claims fraud, and theftby deception. According to the in-dictment, on April 10, 1998,Gaines, Oglesby and Thomas werepassengers in a vehicle beingdriven by Ellison in Philadelphia,Pennsylvania, when they conspiredto falsely claim that an automobileaccident had occurred. Ellison re-ported the collision to the Philadel-phia Police Department and all fourdefendants told the responding of-ficer that they were injured in thephony accident. Ellison also re-ported to State Farm InsuranceCompany that her vehicle was in-volved in a motor vehicle accident.

The indictment alleged that allfour defendants subsequently sub-mitted fraudulent PIP claims to StateFarm for reimbursement for healthcare services for injuries they claimedto have sustained. Oglesby,Gaines, and Thomas pled guilty to

and Irene SmithAn Essex County Grand Jury

handed up an indictment in 2002charging Roy Bailey and Irene Smithwith conspiracy to commit theft bydeception and attempted theft by de-ception. According to the indictment,on February 11, 1997, Ali Harvey,Bailey, and Smith reported to theNewark Police Department that theywere passengers in an automobilewhich was struck by another vehiclethat had run a stop sign and fled.The indictment alleged the accidentnever occurred and that they treatedat an East Orange chiropractic clinicfor injuries they falsely claimed tohave sustained in the phony accidentso that bodily injury and PIP claimscould be submitted to State Farm In-surance Company. State Farm de-nied the claims and referred the caseto OIFP for investigation. Harveypled guilty to an Accusation charginghim with conspiracy. He was admit-ted into the PTI Program and or-dered to complete 50 hours of com-munity service. On November 22,2002, Bailey was arrested pursuantto a bench warrant issued for unre-lated charges and arraigned inEssex County Superior Court. Helater failed to appear for a courthearing and a second bench warrantwas issued for his arrest. Smith pledguilty to the charges in the indict-ment and was sentenced on March7, 2003, to two years probation con-ditioned upon completing 100 hoursof community service.State v.Rene Obredor

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one count each of theft by deception.On January 10, 2003, Oglesby wassentenced to five years probation con-ditioned upon serving 180 days incounty jail, payment of $2,011 in resti-tution to State Farm and payment of a$2,500 civil insurance fraud fine.Gaines was also sentenced on Janu-ary 10, 2003 to three years probationconditioned upon serving 180 days incounty jail, payment of $7,560 in resti-tution to State Farm, and payment ofa $2,500 civil insurance fraud fine. OnJanuary 17, 2003, Thomas was sen-tenced to five years probation condi-tioned upon serving 180 days incounty jail, paying restitution in theamount of $7,560 to State Farm, andpaying a $2,500 civil insurance fraudfine. Ellison pled guilty to conspiracyand health care claims fraud and onJanuary 17, 2003, she was sen-tenced to three years in State prison,payment of $16,741 in restitution toState Farm, and a $5,000 civil insur-ance fraud fine. On August 4, 2003,Pauline Whitfield pled guilty to anAccusation charging her with healthcare claims fraud and imperson-ation, admitting that she alsofraudulently claimed to have beeninjured in the same automobile acci-dent as the other four defendants. Inparticular, she admitted that shehad misrepresented herself to bePaulette Jones to the investigatingofficer and to State Farm InsuranceCompany for the purpose of submit-ting fraudulent health insuranceclaims in the amount of $16,908, ofwhich State Farm paid approxi-mately $5,900. On December 19,2003, Whitfield was sentenced tofive years probation conditionedupon serving 364 days in countyjail, ordered to pay $5,913 in restitu-tion to State Farm, and to pay a$5,000 civil insurance fraud fine.

State v.

John Groff, et al.A State Grand Jury returned an

indictment charging John Groff, LuisRuiz and 27 others with conspiracyand attempted theft by deception inJuly of 2001. Groff and Ruiz, who es-sentially acted as “runners,” conspired

with 27 other defendants to stage a to-tal of seven automobile accidents inand around Camden County. As a re-sult of these phony accidents, phonyPIP claims totaling nearly $97,000were submitted to five insurance carri-ers, including Allstate Insurance Com-pany, State Farm Insurance Company,Liberty Mutual Insurance Company,Prudential Insurance Company, andMaterial Damage Adjustment Corpora-tion. False police reports were made tosix police departments, includingPennsauken, Voorhees, Cherry Hill,Bellmawr, Camden, and GloucesterTownship. Due to the suspicious na-ture of the claims, the carriers re-fused payment and referred the caseto OIFP for further investigation. Ruizpled guilty to conspiracy to committheft by deception in January of 2002and was sentenced to three years inState prison with one year of paroleineligibility. He was also ordered to paya $20,000 civil insurance fraud fine.Groff pled guilty to attempted theft bydeception, admitting that he conspiredwith the 28 other defendants to “stage”

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the phony accidents. On September19, 2003, he was sentenced to sevenyears in State prison with three and ahalf years of parole ineligibility. Theother defendants were admitted intothe PTI Program conditioned uponpaying a $1,000 civil insurance fraudfine and continued cooperation withthe State.

State v.Neil Arrudaand Simone Fernandes

On August 29, 2003, a StateGrand Jury returned two separate in-dictments against Neil Arruda andhis girlfriend, Simone Fernandes,arising out of an OIFP investigationof M&A Auto Body. The first indict-ment charged Arruda with con-spiracy, theft by deception, and falseincrimination. Fernandes wascharged in the second indictmentwith conspiracy, theft by deception,and hindering apprehension or pros-ecution. The indictments allegedthat, between March of 1998 andFebruary of 2000, Arruda orches-trated five staged accidents with thehelp of nine co-conspirators, includ-ing Fernandes, which generatedover $80,000 in fraudulent automobileinsurance claims submitted to variousinsurance companies. On November21, 2003, Fernandes pled guilty totheft by deception. She is scheduled

to be sentenced in early 2004. Sevenof the co-conspirators had been previ-ously charged by OIFP in three sepa-rate indictments returned, respec-tively, by the Essex County GrandJury on May 9, 2003, and by theUnion County Grand Jury on April 9,2003. An eighth co-conspirator hadbeen previously charged by a StateGrand Jury.

State v.Rui Salgado, Anthony Padovano,Ricardo Venturaand Joseph Caponegro

In another case stemming fromthe M&A Auto Body investigation, aUnion County Grand Jury returnedan indictment charging Rui Salgado,Anthony Padovano, RicardoVentura, and Joseph Caponegrowith conspiracy and theft by decep-tion. According to the indictment, onOctober 22, 1999, Padovano inten-tionally drove his 1998 Toyota into a1998 Ducati motorcycle and a 1999Kawasaki Ninja motorcycle, both ofwhich were parked without riders infront of Caponegro’s house. TheState alleged that Padovano falselyreported to the Union Township Po-lice Department that the collisionwas an accident so that he couldsubmit false insurance claims. Theindictment also alleged thatPadovano, Caponegro, Salgado,and Ventura conspired to stage thepurported accident and shared in theproceeds of the insurance claimsmonies paid by Rider InsuranceCompany, Elco Administrative Ser-vices, and Prudential InsuranceCompany in the amount of $13,334.Ventura pled guilty to theft by decep-tion and, on October 3, 2003, wassentenced to three years probationconditioned upon serving 180 days incounty jail and ordered to pay a $500criminal fine. Padovano and

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Caponegro were acquitted by a juryfollowing a trial in Union County. OnOctober 14, 2003, Salgado pledguilty to an amended charge of hin-dering apprehension or prosecutionand was sentenced to one year pro-bation conditioned upon paying a$750 criminal fine.

State v.Antonio Oliviera,Francisco da Cruz,Maria Antunesand Nelson Soares

As part of the M&A Auto Body in-vestigation, Antonio Oliviera, Fran-cisco da Cruz, and Maria Antuneswere variously charged in two sepa-rate Essex County indictments withconspiracy, theft by deception, andunsworn falsification to authorities.The first of the two indictments al-leged that, between March 11, 1998and October 26, 1998, Oliviera andda Cruz conspired to obtain a 1999Isuzu Rodeo from a body shop inNewark, and intentionally drove itinto a 1993 Nissan in Newark so thatproperty damage insurance claimscould be submitted to Liberty MutualInsurance Company. In total, ap-proximately $18,263 in propertydamage was paid on this allegedfraudulent insurance claim. The sec-ond indictment alleged that, betweenOctober 6, 1998 and January 19,1999, Oliviera and Antunes stagedan accident involving a 1994 HondaCivic. The indictment further allegedthat Antunes reported the accident tothe Newark Police Department andsubmitted a false automobile acci-dent report to Liberty Mutual Insur-ance Company claiming propertydamage in the amount of $8,195.Oliviera pled guilty to theft by decep-tion, and on December 12, 2003, wassentenced to two years probation andordered to pay a criminal fine of

$1,000. Pursuant to the plea agree-ment, as to Oliviera, the second in-dictment was dismissed at sentenc-ing. Antunes pled guilty to unswornfalsification to authorities, and on De-cember 12, 2003, was sentenced totwo years probation and payment of a$500 criminal fine. On October 20,2003, da Cruz pled guilty to theamended charge of making a false re-port to law enforcement authoritiesand was sentenced to probation andpayment of a $500 fine.

A State Grand Jury returned an-other indictment, also stemming fromthe M&A investigation, chargingNelson Soares with conspiracy, theftby deception, and hindering appre-hension. This indictment allegedthat, on August 21, 1998, Soaresand several others rented a U-Haultruck to purposely cause an accidentto generate a phony insurance claim.According to the indictments, Soaresthen drove the U-Haul truck into a1994 BMW and allegedly falsely re-ported to the Newark Police Depart-ment that an automobile accidenthad occurred. Soares is currently afugitive and his case is pending trial.State v.Eric Boyer, et al.

On May 19, 2003, 22 individualswere named in four State Grand Juryindictments charging conspiracy,

health care claims fraud, and at-tempted theft by deception. The in-dictments alleged that one of theconspirators, Eric Boyer, master-minded three staged accidents in-volving 21 other co-conspiratorswhich resulted in the submission ofmultiple phony PIP insurance claimsto several insurance companies. Theindictments alleged that, betweenOctober of 1998 and October of1999, Boyer planned and orches-trated the three fictitious automobileaccidents with 21 other defendantswho posed as passengers in the ac-cidents. According to the indict-ments, these three fictitious acci-dents resulted in the submission ofover $204,378 in fraudulent PIP in-surance claims to Progressive Insur-ance Company, State Farm Insur-ance Company, and Alamo-NationalUnion Fire Insurance Company.One of the indictments alleged thatBoyer orchestrated a staged acci-dent which purportedly occurred onOctober 5, 1998, in East Orange.The indictment alleged that Boyerrecruited Shaquan McLaurin, KirkMcNeil, Alnicsa Franklin, Otis Chris-topher, Rodney Mayes, andRaynelle Hamilton to claim that, onOctober 5, 1998, they were passen-gers in a van driven by Boyer andthat they were supposedly injured inan accident which, in fact, never oc-curred. The indictment alleged thatthese defendants were treated fortheir purported injuries and approxi-mately $66,052 in PIP insuranceclaims were submitted to Progres-sive as a result. Progressive deniedthe claims.

According to another one of theindictments, Boyer orchestrated astaged accident on November 1,1998, in West Orange in which avan allegedly driven by Tamika

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Sutton collided with a vehicle drivenby Valentino White. It is alleged thatthe passengers in the van wereSakinah Hill, Shinaka Hill, LouisMcKenzie, Kevin Douglas, andEmilio Mayes, and the passengersin White’s vehicle were VanessaMiller, Raphael McCray, and an-other person who was not identifiedin the indictment. It is also allegedthat the occupants of both vehicleswere treated for purported injuriessustained in the staged accidentand subsequently submitted PIP in-surance claims to Progressive andState Farm. The PIP insuranceclaims submitted to both carriers to-taled approximately $62,865, ofwhich the carriers paid $5,389.

Another one of the indictmentsalleged that Boyer arranged a stagedaccident which occurred on Decem-ber 1, 1998, in Irvington. Accordingto the indictment, Boyer arranged forTamika Sutton to report that she hadbeen driving a rented van which hadbeen struck by a hit and run vehicle.It is alleged that passengers in thevan driven by Sutton were SheriBrown, Robert Henderson, OnaJones, Ali Sawab, Shonique Carney,and Sareesah Houston. As was al-leged in all of the other phony acci-dents, the indictment alleged that allof the occupants in the rented vanclaimed they sustained injuries, weretreated for the purported injuries, andsubmitted PIP insurance claims total-ing $75,460 to Alamo-National UnionFire Insurance Company.

On September 15, 2003, McNeilpled guilty to attempted theft by de-ception and is scheduled to be sen-tenced early in 2004. On November10, 2003, McKenzie pled guilty to at-tempted theft by deception and is alsoscheduled to be sentenced early in2004. All remaining defendants arepending trial.

State v.Iris Salkauski, et al.

On January 13, 2003, a StateGrand Jury returned ten separate in-dictments charging 48 persons withconspiracy, theft by deception, andattempted theft by deception for theiralleged participation in a staged ac-cident ring. The indictments allegedthat the 48 defendants planned orparticipated in at least ten “staged”automobile accidents over a two andone half year period from December9, 1996 through May 27, 1998, in theCamden County area. As a result ofthe “staged” accident scheme,Allstate Insurance Company re-ceived PIP claims totaling $567,940.

The OIFP investigation deter-mined that the defendants would al-legedly “stage” fake automobile acci-dents by purposely crashing carsinto one another or into fixed objects.The motor vehicle accidents wouldbe reported to area police depart-ments, principally the Camden andPennsauken Police Departments, af-ter which the “victims” would seekand obtain treatment for purportedinjuries sustained as a result of the“staged” accidents. Ultimately,fraudulent PIP claims were filed withAllstate Insurance Company for pay-ment or reimbursement of medicalexpenses and “pain and suffering”costs. At least one “staged” accidentinvolved undercover law enforce-ment officers posing as participantsin the illegal scheme.

The principal indictment identi-fied Iris Salkauski as the allegedleader of the conspiracy and the co-ordinator of each of the ten “staged”

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accidents. It alleged that Salkauski or-chestrated the “staged” accidents, re-cruited the participants for each of the“staged” accidents, paid them for theirparticipation in the “staged” accidents,and directed them to obtain medicalcare and legal services. Salkauski re-mained a fugitive from the time of theindictment until her arrest on March 5,2003, when she was found coweringin a bedroom closet inside a resi-dence in Kissimmee, Florida.Salkauski was lodged in the OsceolaCounty Jail without bail until her extra-dition to New Jersey.

Hector Bonilla, one of the partici-pants, pled guilty to conspiracy and,on June 20, 2003, was sentenced tofour years in State prison to run con-current with a county jail sentencestemming from an unrelated matter.Restitution and civil insurance fraudfines were also imposed. DavidGonzalez, another participant, pledguilty to conspiracy and, on Septem-ber 19, 2003 was sentenced to threeyears probation conditioned uponperforming 150 hours of communityservice and paying a $1,500 civil in-surance fraud fine. Ileana Gonzalez,another participant, pled guilty toconspiracy and, on September 19,2003 was sentenced to two yearsprobation conditioned upon perform-ing 100 hours of community service.Miguel Roman and Elba Soto, twoother participants, pled guilty to con-spiracy. On November 14, 2003, Ro-man was sentenced to three yearsprobation conditioned upon perform-ing 150 hours of community serviceand ordered to pay a $1,500 civil in-surance fraud fine. On November14, 2003, Soto was sentenced to twoyears probation conditioned uponpaying a $1,500 civil insurance fraudfine. Salkauski pled guilty to con-spiracy and on November 14, 2003,was sentenced to five years in Stateprison and ordered to pay a civil in-

surance fraud fine in the amount of$235,000. Several other defendantspled guilty and received probationarydispositions while the remaining de-fendants are pending trial.

Fictitious InsuranceIdentification Cardsand Motor VehicleDocuments(Uninsured Motorists)

State v.Jenette Thomas-Malik, et al.

An Essex County Grand Jury re-turned indictments against JenetteThomas-Malik and Yolanda Danielsa/k/a Yolanda Adams, charging themvariously with conspiracy, theft bydeception, simulating a motor ve-hicle insurance identification card,forgery, and possession of a con-trolled dangerous substance (CDS).The indictment alleged that Thomas-Malik, Daniels, and another con-spirator, Regina Bryan, fraudulentlysold fictitious “insurance” in the formof phony insurance identificationcards and phony insurance policy“declaration pages” to individuals, in-cluding two undercover State Investi-gators for $600. Kareem Young, aco-conspirator of Thomas-Malik,Daniels, and Bryan, pled guilty to anAccusation charging him with con-spiracy and theft by deception for hisrole in the conspiracy. Young wassentenced to 27 days in jail as a con-dition of three years probation, andordered to seek, obtain, and main-tain employment. Regina Bryan pledguilty to an Accusation charging herwith conspiracy to commit theft bydeception and was sentenced to oneyear probation conditioned uponmaintaining employment and con-tinuing to attend drug rehabilitation.Thomas-Malik pled guilty to con-

spiracy, simulating a motor vehicleinsurance card, and possession ofCDS. On February 14, 2003, Tho-mas-Malik was sentenced to 364days in county jail as a condition ofthree years probation.

State v.Brett Denby

On January 8, 2003, aCumberland County Grand Jury re-turned an indictment charging BrettDenby with simulating a motor ve-hicle insurance identification card.The indictment alleged that, onJune 7, 2002, Denby produced acounterfeit motor vehicle insuranceidentification card, purportedly is-sued by Merchants Mutual Insur-ance Company, to a person con-ducting a routine inspection ofDenby’s car at the Millville motor ve-hicle inspection facility. The indict-ment also alleged that, on June 23,2002, Denby displayed a purportedMerchants Mutual counterfeit motorvehicle insurance identification cardto a New Jersey State Trooper dur-ing a traffic stop. Denby’s case ispending trial.

State v.John Galiazzi

On January 31, 2003, JohnGaliazzi was sentenced to threeyears probation and ordered toserve 120 days of community ser-vice after he pled guilty to an Accu-sation charging him with simulatinga motor vehicle insurance identifica-tion card. Galiazzi admitted that heproduced and sold phony motor ve-hicle insurance identification cardspurportedly issued by Selective In-

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surance Company of America andthe Barclay Insurance Company. Healso admitted presenting a fictitiousmotor vehicle insurance identifica-tion card to law enforcement au-thorities during a traffic stop.

State v. T.R.As part of OIFP’s investigation

into the sale of fake motor vehicledocuments, including fraudulentlyissued drivers’ licenses, T.R. pledguilty on May 5, 2003, to a onecount Essex County indictmentwhich charged her with receivingstolen property. She admitted re-ceiving a stolen 2000 Audi automo-bile. On the same date, she was ad-mitted into the PTI Program condi-tioned upon completing 50 hours ofcommunity service.

State v.Larry L. Casey

On February 21, 2003, Larry L.Casey pled guilty to an Accusationcharging him with simulating a mo-tor vehicle insurance identificationcard. Casey admitted that, on May4, 2002, he presented an alteredautomobile insurance identificationcard, purportedly issued by Pruden-tial Insurance Company, to a MotorVehicle Commission (MVC) inspec-tor while having his car inspected atthe Baker’s Basin inspection facility.The Motor Vehicle Commission em-ployee reported the matter to theState Police, who investigated thecase and referred it to OIFP forprosecution. On June 6, 1975,Casey had previously been con-victed of murder and served 24years in State prison. He is currentlyincarcerated at Bayside State

Prison as the result of parole viola-tions. On February 21, 2003, Caseywas sentenced to six months inState prison to run concurrently withhis parole violation prison sentence.

State v.Lamont Hines

On January 27, 2003, LamontHines pled guilty to an Accusationcharging him with conspiracy to sellsimulated motor vehicle insuranceidentification cards. Hines admittedthat following his earlier arrest onunrelated charges during a motorvehicle stop in South Plainfield, hehad in his possession 13 blankState Farm Insurance Company au-tomobile insurance identificationcards. Hines also admitted that heand another unidentified personwere selling the blank identificationcards out of Hines’s car. Hines wassentenced on the same date to fiveyears in State prison with 20 monthsparole ineligibility.

State v.Sonia Negron

On February 20, 2003, aCamden County Grand Jury returnedan indictment charging Sonia Negronwith simulating a motor vehicle insur-ance identification card. According tothe indictment, on July 30, 2002, shepresented a phony automobile insur-ance identification card purportedlyissued by Progressive Northern In-surance Company to a New JerseyState Trooper, knowing that the card

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was a counterfeit and that she had noautomobile insurance. On December9, 2003, Negron was admitted into thePTI Program conditioned upon per-forming 50 hours ofcommunity service.

State v.Gerry Frederique

On April 14, 2003, GerryFrederique was admitted into the PTIProgram conditioned upon complet-ing 50 hours of community serviceand participating in drug and alcoholtesting as directed by Probation.Frederique was charged by anEssex County Grand Jury with simu-lating a motor vehicle insuranceidentification card. The indictment al-leged that on August 2, 2001,Frederique presented a phony motorvehicle insurance identification cardto an Irvington police officer, know-ing that the insurance identificationcard, purportedly issued by the Colo-nial Penn Insurance Company, wasa fake. Frederique allegedly pre-sented the card to the Irvington po-lice officer when the police officerquestioned him about an illegallyparked 1999 Honda Accord.

State v. Regina Lasane

Regina Lasane was charged byan Essex County Grand Jury withsimulating a motor vehicle insuranceidentification card. Lasane presenteda phony motor vehicle insuranceidentification card to an Irvington po-lice officer, knowing that the insur-ance identification card, purportedlyissued by the Allstate InsuranceCompany, was counterfeit. Lasanewas trying to retrieve her impounded1989 Honda from the Irvington Po-lice Department impound yard when

she was asked for proof of insuranceand presented the fictitious identifica-tion card. On March 10, 2003, Lasanepled guilty and, on April 14, 2003, shewas admitted into the PTI Programconditioned upon completing 50 hoursof community service.

State v.Zoila M. Collao-Villegas

A Union County Grand Jury re-turned an indictment charging ZoilaM. Collao-Villegas with simulating amotor vehicle insurance identificationcard. According to the indictment,while having her vehicle inspected atthe Plainfield Motor Vehicle Commis-sion inspection facility, Collao-Villegas presented a phony insur-ance identification card, purportedlyissued by Allstate Insurance Com-pany, to the motor vehicle inspector.On November 7, 2003, Collao-Villegas was admitted into the PTIProgram conditioned upon perform-ing 60 hours of community service.

State v.Luis A. Membreno-Dominque

A Somerset County Grand Juryreturned an indictment charging LuisA. Membreno-Dominque with simu-lating a motor vehicle insuranceidentification card. According to theindictment, while attempting to gethis vehicle released from theFranklin Township Police Depart-ment impound lot, Membreno-Dominque presented a phony auto-

mobile insurance identification card toa Franklin Township police officer. OnAugust 5, 2003, Membreno-Dominquewas admitted into the PTI Programconditioned upon performing 50 hoursof community service.

State v.Jamel Laboo

A Hudson County Grand Juryreturned an indictment chargingJamel Laboo with simulating a mo-tor vehicle insurance identificationcard. According to the indictment,while having his vehicle inspectedat the Jersey City Motor VehicleCommission inspection station,Laboo presented a phony insuranceidentification card, purportedly is-sued by Allstate Insurance Com-pany, to the motor vehicle inspector.On July 29, 2003, Laboo was admit-ted into the PTI Program condi-tioned upon performing 25 hours ofcommunity service.

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ance Company, gave him the blank in-surance identification cards for thepurpose of selling them. Hopson and

each subsequently pledguilty to conspiracy. On September12, 2003, Hopson was sentenced totwo years probation conditionedupon serving 364 days in county jailand ordered to pay a $750 criminalfine and to perform 75 hours of com-munity service. was sen-tenced on the same date to one yearprobation and ordered to pay a $500criminal fine and to perform 75 hoursof community service.

State v.Keisha Lashaye-Dashawna Brown

On April 7, 2003, KeishaLashaye-Dashawna Brown pledguilty to an Accusation charging herwith simulating a motor vehicle insur-ance identification card. Brown ad-mitted that, while having her automo-bile inspected at the Millville MotorVehicle Commission inspection sta-tion, she presented a phony automo-bile insurance identification card,purportedly issued by Newark Insur-ance Company, to the motor vehicleinspector. In May of 2003, Brownwas admitted into the PTI Programconditioned upon performing 20hours of community service.

State v.Wanda Bryan

Wanda Bryan was charged by aMercer County Grand Jury withsimulating a motor vehicle insuranceidentification card. According to theindictment, during a traffic stop inHamilton Township, Bryan presenteda phony insurance identificationcard, purportedly issued by StateFarm Indemnity Company, to aHamilton Township police officer.Bryan was admitted into the PTI Pro-gram on June 3, 2003.

State v.Yvette R. Williams

On September 24, 2003, aCumberland County Grand Jurycharged Yvette R. Williams withsimulating a motor vehicle insuranceidentification card. According to theindictment, Williams presented aphony motor vehicle insurance iden-tification card, purportedly issued byLiberty Mutual Insurance Company,to a Millville Motor Vehicle Commis-sion inspector, while having her ve-hicle inspected at the Millville inspec-tion station. On October 15, 2003,Williams failed to appear at her pre-arraignment interview. A bench war-rant was issued for her arrest. Will-iams’ case is pending trial.

State v.Jimmy Gurzkovic

An Essex County Grand Jury re-turned an indictment charging JimmyGurzkovic with simulating a motorvehicle insurance identification card.According to the indictment, betweenMay 16 and May 21, 2001,Gurzkovic, who owned and operatedF&G Auto Repair, sold two phony,blank automobile insurance identifi-cation cards to an undercover StateInvestigator. On April 8, 2003,Gurzkovic pled guilty to the indict-

State v.Janie A. Jenkins-Morrison

A Mercer County Grand Jury re-turned an indictment charging JanieJenkins-Morrison with simulating amotor vehicle insurance identifica-tion card. According to the indict-ment, on May 22, 2002, Jenkins-Morrison created two phony motorvehicle insurance identificationcards, purportedly issued by A Clas-sic Plan, Inc., and bearing the nameof an acquaintance, EudeanMcMillan. One phony motor vehicleinsurance identification card pur-ported to provide insurance cover-age for a 1985 Cadillac and theother for a 1987 Lynx. On July 28,2003, Jenkins-Morrison pled guiltyto simulating a motor vehicle insur-ance identification card and was ad-mitted into the PTI Program condi-tioned upon performing 25 hours ofcommunity service.

State v.Montez Hopsonand

An Essex County Grand Jury re-turned an indictment chargingMontez Hopson and

with conspiracy and simu-lating a motor vehicle insuranceidentification card. According to theindictment, on July 11, 2001, follow-ing his involvement in a motor ve-hicle accident, Hopson was arrestedfor operating an uninsured motor ve-hicle while his driver’s license wasunder suspension. At the time of hisarrest, approximately 17 blank Lib-erty Mutual Insurance Company in-surance identification cards were inhis possession. Also according to theindictment, Hopson’s girlfriend,

in her capacity asan employee of Liberty Mutual Insur-

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ment. On July 18, 2003, Gurzkovicwas sentenced to two years proba-tion conditioned upon paying a $500criminal fine and continued coopera-tion with the investigation.

State v.Emiled R. Herrera

On July 2, 2003, a Union CountyGrand Jury returned an indictmentcharging Emiled Herrera with simu-lating a motor vehicle insuranceidentification card. According to theindictment, while having his 1995Toyota pick-up truck inspected at aPlainfield Motor Vehicle Commission

Shariff was sentenced to 18 monthsprobation and ordered to completeher college courses.

State v.Lunic Adisson

On June 27, 2003, an EssexCounty Grand Jury returned an in-dictment charging Lunic Adissonwith two counts of simulating a motorvehicle insurance identification card.According to the indictment, Adissonpresented the fictitious insuranceidentification card to an Irvington po-lice officer to regain possession ofher car, which had been impounded

facility, Herrera presented a phony au-tomobile insurance identificationcard, purportedly issued by New Jer-sey Manufacturers Insurance Com-pany, to the motor vehicle inspector.Herrera’s case is pending trial.

State v.Tonya Shariff a/k/a Sharif Bayyinah

On May 16, 2003, Tonya Shariffa/k/a Shariff Bayyinah pled guilty toan Accusation charging her withsimulating a motor vehicle insuranceidentification card. Shariff admittedthat she presented a phony automo-bile insurance identification card,purportedly issued by Security Insur-ance Company, to a Jersey City Mo-tor Vehicle Commission inspectorwhile having her vehicle inspected.

by the Irvington Police Department.On July 29, 2003, Adisson was againindicted for her role in a health careclaims fraud scam involving Dr.LeClerc Adisson. Lunic Adisson’scases are pending trial.

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State v.Paul J. Frye

On July 29, 2003, Paul J. Fryepled guilty to an Accusation charg-ing him with simulating a motor ve-hicle insurance identification card.Frye admitted that he presented aphony automobile insurance identi-fication card, purportedly issued byIFA Insurance Company, to a MotorVehicle Commission inspector atthe Millville inspection station,while having his vehicle inspected.On the same date, Frye was admit-ted into the PTI Program condi-tioned upon performing 50 hours ofcommunity service.

State v.Samuel Rodriguez

On July 29, 2003, a CumberlandCounty Grand Jury returned an in-dictment charging Samuel Rodriguezwith simulating a motor vehicle insur-ance identification card. According tothe indictment, Rodriguez presenteda phony automobile insurance identi-fication card, purportedly issued byAllstate Insurance Company, to aMotor Vehicle Commission inspectorat the Millville inspection station,while having his vehicle inspected.This case is pending trial.

State v.Nimer Elsamna

On August 20, 2003, an EssexCounty Grand Jury returned an in-dictment charging Nimer Elsamnawith forgery. According to the indict-ment, Elsamna sold a fictitious Mo-tor Vehicle Commission temporaryregistration tag to an undercoverOIFP investigator. This case ispending trial.

State v.Juan G. Rivera

On August 8, 2003, Juan G.Rivera pled guilty to an Accusationcharging him with simulating a motorvehicle insurance identification card.Rivera admitted that he presented aphony insurance identification card,purportedly issued by PalisadesSafety & Insurance Association, toan inspector at the Deptford MotorVehicle Commission inspection facil-ity. On August 19, 2003, Rivera wasadmitted into the PTI Program, withthe requirement that he provideproof of valid automobile insurance.

State v.Joel Jean-Pierre

On August 21, 2003, Joel Jean-Pierre pled guilty to an Accusationcharging him with forgery. Jean-Pierre admitted that he altered acancellation letter from his automo-bile insurance carrier, NJ Cure Insur-ance Company, to falsely reflect thathe had valid automobile insurancecoverage, and submitted the letter tothe New Jersey Motor Vehicle Com-mission in order to show proof ofcoverage. On the same date, Jean-Pierre was admitted into the PTI Pro-gram conditioned upon performing25 hours of community service.

State v.Tyshon Phipps

On November 19, 2003, anEssex County Grand Jury returnedan indictment charging TyshonPhipps with simulating a motor ve-hicle insurance identification card.According to the indictment, on April

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30, 2003, during the course of a trafficstop in Essex Fells, Phipps presentedthe police officer with a fraudulent au-tomobile insurance identification card,purportedly issued by Progressive In-surance Company. This case is pend-ing trial.

State v.Jose Ramon Bouson

On October 3, 2003, JoseRamon Bouson pled guilty to an Ac-cusation charging him with simulat-ing a motor vehicle insurance identi-fication card. Bouson admitted that,on March 23, 2001, while on proba-tion for an unrelated conviction, hemanufactured and sold a counterfeitmotor vehicle insurance identificationcard to a person acting in an under-cover capacity for OIFP. Bousonawaits sentencing.

State v.Waddell A. Tidwell

On October 3, 2003, WaddellTidwell pled guilty to an Accusationcharging him with simulating a mo-tor vehicle insurance identificationcard. Tidwell admitted that he soldfictitious insurance identificationcards to an undercover New JerseyState Trooper on three occasions.Tidwell awaits sentencing.

State v.James Cacciavillano

On October 16, 2003, JamesCacciavillano pled guilty to an Accu-sation charging him with simulating amotor vehicle insurance identificationcard. Cacciavillano admitted that, onOctober 10, 2002, he presented aphony insurance identification card,purportedly issued by Penn National

Insurance Company, to an inspectorat the Deptford Motor Vehicle Com-mission inspection facility. On De-cember 5, 2003, Cacciavillano wasadmitted into the PTI Program.

State v.Alfred J. Whittaker

On November 13, 2003, AlfredWhittaker pled guilty to an Accusa-tion charging him with simulating amotor vehicle insurance identificationcard. Whittaker admitted that onFebruary 25, 2003, following a motorvehicle accident in Lawrence Town-ship, he presented a false automo-bile insurance identification card to aLawrence Township police officer.On November 13, 2003, Whittakerwas admitted into the PTI Programconditioned upon performing 50hours of community service.

State v.Marcy L. Moss

On November 18, 2003, MarcyMoss pled guilty to an Accusationcharging her with simulating a motorvehicle insurance identification card.Moss admitted that on June 24,2003, she produced and sold to anundercover New Jersey StateTrooper, a false motor vehicle insur-ance identification card, purportedlyissued by Liberty Mutual InsuranceCompany, which purportedly re-flected insurance coverage for a1984 Pontiac in the name of DavidReed. Moss admitted that she knewthe insurance identification card wascounterfeit. Moss awaits sentencing.

State v.Clarence E. Shambry, Sr.

On November 13, 2003, aCamden County Grand Jury returnedan indictment charging Clarence E.Shambry, Sr., with simulating a mo-tor vehicle insurance identificationcard. The indictment alleged that, onJune 5, 2002, Shambry sold a ficti-tious motor vehicle insurance identi-fication card, purportedly issued byAllstate Insurance Company, to aNew Jersey State Trooper working inan undercover capacity, knowingthat the insurance identification cardwas counterfeit. Shambry’s case ispending trial.

State v.John Solomon Riley

On November 10, 2003, JohnSolomon Riley pled guilty to an Ac-cusation charging him with tamper-ing with public records or informa-tion. Riley admitted that, on May 11,2003, during a traffic stop in MorrisCounty, he presented a fraudulentdriver’s license in the name of Mat-thew Mercer to a Harding Townshippolice officer, knowing that thedriver’s license was a fake. On De-cember 22, 2003, Riley was sen-tenced to 18 months probation con-ditioned upon serving 30 days incounty jail.

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State v.Jorge Luis Velasquez

On December 12, 2003, JorgeLuis Velasquez pled guilty to an Ac-cusation charging him with simulat-ing a motor vehicle insurance identi-fication card. Velasquez admittedthat on June 5, 2002, during a trafficstop in South Plainfield, he pre-sented the police officer with afraudulent motor vehicle insuranceidentification card, purportedly is-sued by the Liberty Mutual InsuranceCompany, knowing that the insur-ance identification card was counter-feit. Velasquez awaits sentencing.

State v.Boyd Robinson

A State Grand Jury returned anindictment charging Boyd Robinsonwith simulating a motor vehicle in-surance identification card, sale of asimulated document, and forgery.According to the indictment, be-tween July of 2001 and August of2001, Robinson sold a fictitious au-tomobile insurance identificationcard, purportedly issued by StateFarm Indemnity Company, a ficti-tious New Jersey driver’s license,and three fictitious motor vehicle in-spection stickers to an undercoverOIFP investigator. OIFP’s investiga-tion into this matter began when itwas contacted by the Irvington Po-lice Department which had arresteda woman known as Snow Gossettea/k/a Tykema Lewis, who had pre-sented a fictitious automobile insur-ance identification card to anIrvington police officer in order toget her impounded vehicle re-leased. She identified Robinson asthe person who sold her the ficti-tious identification card. On October17, 2003, Robinson pled guilty tosale of a simulated document. He ispending sentencing.

State v.JoAnn Guzzi

On August 21, 2003, JoAnnGuzzi pled guilty to an Accusationcharging her with official misconduct.Guzzi admitted that, while an em-ployee of the Motor Vehicle Commis-sion, on August 22, 2001, she manu-factured a duplicate automobile titleapplication form in the name of DianDouglas and signed Douglas’ nameon the application without Douglas’knowledge or authorization. Guzziadmitted that she sold the duplicatetitle to Ismael Ramos for approxi-mately $80 knowing that Ramos wasnot entitled to the duplicate automo-bile title. Guzzi was terminated fromher employment with the Motor Ve-hicle Commission on June 25, 2003.The investigation is continuing andfurther charges are possible. OnSeptember 26, 2003, Guzzi was sen-tenced to three years probation.

State v.Gina Guzzi

On September 15, 2003, GinaGuzzi pled guilty to an Accusationcharging her with falsifying records.Guzzi, who was an employee of theVineland Motor Vehicle Commissionoffice, admitted that on September27, 2000, she falsified and providedto another woman a duplicate auto-mobile driver’s license in the nameof a third woman by filling in thedriver’s license application form as ifshe (Guzzi) was the third woman,without the third woman’s knowledgeor permission. Guzzi admitted thatshe provided the fraudulent driver’slicense knowing that it was false. OnOctober 24, 2003, Guzzi was sen-tenced to three years probation andwas permanently barred from publicemployment in New Jersey.

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Health, Life,and DisabilityInsurance Fraud

Health Care Provider Fraud

State v.Thomas Boselli

Thomas Boselli pled guilty to anAccusation charging him with falsi-fying records. Boselli admitted that,on January 24, 2001, he submitteda claim form to Horizon Blue Cross/Blue Shield for providing chiroprac-tic services as if he held a valid chi-ropractic physician’s license when,in fact, he did not. On January 3,2003, Boselli was sentenced to twoyears probation conditioned uponpaying a $100,000 civil insurancefraud fine and completing 100 hoursof community service.

State v.Martin Weinstein

Dr. Martin Weinstein was in-dicted by a State Grand Jury andcharged with health care claimsfraud, theft by deception and forgery.The indictment alleged that, betweenJuly of 1997 and January of 1999,Weinstein, a licensed podiatrist,fraudulently billed Horizon BlueCross/Blue Shield approximately$285,000 for podiatric services henever rendered and for which hewas paid more than $200,000.Weinstein allegedly submitted thefraudulent claims by means of elec-tronic billing from his office to Hori-zon Blue Cross/Blue Shield and di-verted the insurance claim checks is-sued to the patients to a Post Officebox that he rented. It is alleged thatWeinstein would forge the patients’names on the back of the checksand deposit them into his own ac-

count to steal the money. Weinsteinfailed to appear in court and a benchwarrant was issued for his arrest onFebruary 25, 2003.

State v.Arthur Dinkel

Arthur Dinkel, a former psy-chologist who owned and operatedtwo Paramus psychotherapy clinics,pled guilty to an Accusation charg-ing him with theft by deception.Dinkel admitted that, between Janu-ary of 1998 and March of 1999, hesubmitted fraudulent billings to vari-ous insurance carriers. Dinkel’sfraudulent billings took the form ofoverbilling for psychological ser-vices rendered, falsely billing thehealth insurance policies of certainpatients for psychological servicesrendered to others who were notcovered, and billing for services pur-portedly performed by a staff medi-cal doctor on dates prior to themedical doctor’s employment andafter his termination. In total, Dinkelwas paid $45,281 by the various in-surance companies for thesefraudulent billings. On April 4, 2003,Dinkel was sentenced to two yearsprobation conditioned upon payingfull restitution.

State v.Roland Evans

On March 11, 2003, Dr. RolandEvans pled guilty to an Accusationcharging him with health care claimsfraud. Evans admitted that, betweenJanuary of 1996 and May of 2000,he submitted fraudulent bills to AetnaLife Insurance Company and Guard-ian/PHS Health Plans for chiropracticservices he never rendered. Evansfraudulently billed Aetna and Guard-ian a total of $12,313, for which hewas paid $6,302. On June 6, 2003,Evans was sentenced to three years

probation conditioned upon payingrestitution in the amount of $6,302and ordered to pay a civil insurancefraud fine of $20,000.

State v.Lev Natovich, Boris Natovichand Joseph Matriss

On July 10, 2003, Lev Natovichwas charged by a State Grand Jurywith health care claims fraud, con-spiracy to commit health care claimsfraud, conspiracy to commit theft bydeception, unlawful practice of den-tistry, theft by deception, and con-spiracy to commit unlawful practiceof dentistry. Also named in the indict-ment was Boris Natovich, LevNatovich’s father and the owner ofUnited Dental Center. Boris Natovichwas charged with one count of con-spiracy to commit unlawful practiceof dentistry. The final defendantnamed in the indictment was Dr. Jo-seph P. Matriss, a dentist licensed topractice dentistry in New Jersey, whoperformed dental services at UnitedDental Center. Matriss was chargedwith health care claims fraud, con-spiracy to commit health care claimsfraud, conspiracy to commit theft bydeception, and theft by deception.

The indictment alleged that, be-tween September of 1999 and Marchof 2002, Boris Natovich and Matrissassisted Lev Natovich and anotherperson who was previously charged,Vadim Lioubomoudrov, in providingdental treatment to patients of UnitedDental Center, including children,even though neither Lev Natovichnor Lioubomoudrov were licensed topractice dentistry in New Jersey. It isalso alleged that United Dental Cen-ter submitted fraudulent bills for den-tal services to Local 338 Fund, a la-bor union, and to Delta Dental Insur-ance for dental treatments per-formed by persons who were not li-

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Bergen County authorities pursuantto a bench warrant that had been is-sued for his arrest on these charges.On the same date, he pled guilty totheft by deception and was later sen-tenced to two years probation andordered to pay restitution to the StateHealth Benefits Program in theamount of $2,306, and a $2,500 civilinsurance fraud fine.

State v.Barry Vogel

On June 12, 2003, a StateGrand Jury returned an indictmentcharging Barry M. Vogel, a former li-censed neurologist, with health careclaims fraud and theft by deception.According to the indictment, betweenJuly of 1997 and May of 1999, Vogelsubmitted fraudulent bills totalingmore than $54,000 to PrudentialProperty and Casualty InsuranceCompany of New Jersey, for diag-nostic services he failed to render orfailed to render properly. It is allegedthat Vogel submitted fraudulenthealth insurance claims for electro-diagnostic tests, known as nerveconduction velocity (NCV) tests, per-formed on patients who had alleg-edly been injured in automobile acci-dents. It is also alleged that hefraudulently submitted the same di-agnostic test results for multiple pa-tients. Vogel’s case is pending trial.

censed dentists. The indictment fur-ther alleged that the fraudulent billswere submitted to the insurance car-riers claiming that Matriss, who waslicensed, was the treating dentist,even though he had not treatedsome of the patients. This case ispending trial.

State v.Vadim Lioubomoudrov

As part of the United DentalCenter investigation, on March 31,2003, Vadim Lioubomoudrov, a na-tive of Russia, pled guilty to an Accu-sation charging him with the unlawfulpractice of dentistry. Lioubomoudrovadmitted that, between November of1997 and December of 1999, he pro-vided dental treatment to patients atthe United Dental Center located inWallington, even though he did notpossess a license to practice den-tistry in New Jersey. On May 9,2003, Lioubomoudrov was admittedinto the PTI Program conditionedupon continued cooperation withOIFP’s investigation into the UnitedDental Center.

State v.Jerome Cochran

Jerome Cochran was among ap-proximately 200 defendants whowere indicted or charged by way ofAccusation in a complex public cor-ruption health insurance fraud caseinvolving a licensed psychologist,Carl Lichtman. Lichtman conspiredwith employees of several New Jer-sey school districts, includingCochran, and submitted false healthinsurance claims to more than 36 in-surance carriers and health careplans in order to steal millions of dol-lars of health care insurance money.Lichtman was previously sentencedto State prison for his role in the con-spiracy. On March 14, 2003, JeromeCochran voluntarily surrendered to

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State v.LeClerc Adissonand Lunic Adisson

On July 29, 2003, a State GrandJury returned an indictment againstDr. LeClerc Adisson, a licensedmedical doctor, and his niece, LunicAdisson, charging them with healthcare claims fraud, theft by deception,misconduct by a corporate official,and falsifying records. According tothe indictment, between April of 1997and December of 2000, LeClercAdisson concealed the fact that heowned and had a “beneficial interest”in two corporations, Dantor MedicalSupply and Clara Medical Services.It is further alleged that, with the as-sistance of his niece, Lunic Adisson,LeClerc Adisson, submitted bills tovarious insurance companies formedical supplies and related ser-vices purchased from Dantor andClara Medical, knowing the insur-ance companies would not pay thebills if they had known he ownedDantor and Clara Medical. The in-dictment alleged that, in some in-stances, the bills were fraudulent be-cause they were inflated or theywere for equipment that was neverprovided to patients. In total, it is al-leged that LeClerc and LunicAdisson fraudulently billed insurancecarriers approximately $48,273, ofwhich the Adissons were paid ap-proximately $26,028.

Lunic Adisson was also namedin an unrelated indictment chargingthat, on December 13, 2002, inIrvington, she was in possession ofa fictitious insurance identificationcard. It is alleged in that indictmentthat she presented the fictitious in-surance identification card to anIrvington police officer to regainpossession of her car which hadbeen impounded by the IrvingtonPolice Department. Both cases arepending trial.

State v.Alan Ottenstein

On July 16, 2003, OIFP investi-gators executed a search warrant atthe medical offices of Dr. AlanOttenstein located in Lawrencevilleand Hamilton Township, and arecords storage facility located inMount Holly. During the course ofexecuting the search warrant, sev-eral weapons, including a gun, am-munition, a “stun gun” and otherweapons, as well as marijuana werefound and seized. Ottenstein wascharged with possession of mari-juana with intent to distribute, pos-session with intent to distribute within1,000 feet of a school, as well aswith possession of prohibited weap-ons and devices (explosives), pos-session of prohibited weapons anddevices (stun gun), possession ofprohibited weapons and devices(ammunition), and unlawful posses-sion of weapons (Oleoresin Capsi-cum). On July 23, 2003, Ottensteinwas arrested on the above refer-enced charges and bail was set inthe amount of $50,000. TheOttenstein case is pending grandjury presentation.

State v.Richard Finder

On November 10, 2003, RichardFinder, a former licensed chiroprac-tor, pled guilty to an Accusationcharging him with health care claimsfraud. Finder, who had operated theFamily Chiropractic Clinic located inFort Lee, admitted that, from Januarythrough August of 2000, he submit-ted over $1,260 in fraudulent bills tothe Cigna Insurance Company forchiropractic treatments that he neverrendered. Finder awaits sentencing.

State v.Alphonso Smithand Daniel Catanzaro

On December 17, 2003, a StateGrand Jury returned an indictmentcharging Dr. Alphonso Smith and Dr.Daniel Catanzaro with health careclaims fraud, attempted theft by de-ception, and theft by deception. Theindictment alleged that Smith, a li-censed medical doctor, andCatanzaro, a licensed chiropractor,operated a medical practice inWayne known as Quality Care Phy-sicians. It is alleged that, betweenJuly of 1997 and March of 1999, thedoctors submitted bills in the amountof $36,000 for anesthesia adminis-tered by needle injection when, infact, electrical stimulation therapy,which did not involve injected anes-thesia, were the medical service(s)actually rendered to the patients.The indictment alleged that the falseclaims were submitted to several in-surance companies for both healthand automobile insurance, includingOxford Health Care, New JerseyManufacturers Insurance Company,United Health Care and Allstate In-surance Company. This case ispending trial.

False Health Care Claims

State v. Andrea WahligAndrea Wahlig was arrested by

OIFP investigators pursuant to acomplaint and summons chargingher with health care claims fraud forsubmitting claims for prescription re-imbursements to which she was notentitled. Wahlig subsequently pledguilty to an Accusation charging herwith health care claims fraud. At theguilty plea hearing, Wahlig statedthat she had been injured at workand had received workers’ compen-sation benefits from New Jersey

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Manufacturers Insurance Company,which benefits paid for her medicaltreatment and prescription medica-tions. Wahlig was also covered un-der her husband’s prescription plan,which required a co-pay of $5 perfilled prescription. Wahlig admittedthat, between 1997 and 2000, shesubmitted false insurance claims toNew Jersey Manufacturers for full re-imbursement of her prescriptionmedications, when, in fact, herhusband’s prescription plan had paidfor the prescriptions, less the $5 co-pay. Because she failed to discloseher husband’s prescription coverage,New Jersey Manufacturers paidWahlig a total of $11,771 represent-ing the full cost of 18 prescriptiontransactions, when Wahlig shouldhave only been reimbursed for herco-payments for the prescriptions.On January 10, 2003, Wahlig wassentenced to five years probationconditioned upon paying $11,681 inrestitution to New Jersey Manufac-turers Insurance Company and or-dered to pay a $5,000 civil insurancefraud fine.

State v.Brian Butler

A State Grand Jury returned anindictment charging Brian Butler withhealth care claims fraud and theft bydeception. According to the indict-ment, Butler falsely claimed to haveslipped and fallen while a passengeron a Coach USA/O.N.E. bus operat-ing in Elizabeth and fraudulently sub-mitted an insurance claim to Aetna/U.S. HealthCare for injuries purport-edly sustained in the bus accident.Aetna paid the claim money directlyto Butler’s medical service providers.The indictment also alleged that But-ler fraudulently submitted an insur-ance claim to ACE Property and Ca-sualty Company, the insurance car-

rier for Coach USA/O.N.E., for per-sonal injuries and was paid approxi-mately $3,000 for this claim. Butlerpled guilty to theft by deception and,on January 17, 2003, he was sen-tenced to three years probation con-ditioned upon paying $3,740 in resti-tution to Sedwick Claims Servicesand Aetna/US HealthCare.

State v. Donald RobisonOn February 13, 2003, a Passaic

County Grand Jury returned an in-dictment charging Donald Robisonwith health care claims fraud andtheft by deception. According to theindictment, Robison submitted threefraudulent health insurance claims toAARP Health Care Options for treat-ment he had not received at threeNorthern New Jersey hospitals. Theindictment also alleged that Robisonknew that the claims were fraudulentwhen he submitted them. Robisonallegedly received a total of $2,880as a result of these fraudulent sub-missions. On March 13, 2003,Robison failed to appear to answerthe charges and a bench warrantwas issued for his arrest. Robison’scase is pending trial.

State v. Patricia and Paul Sullivan

A State Grand Jury chargedPatricia and Paul Sullivan in connec-tion with the submission of fraudu-lent health care claims in two sepa-rate indictments. The first indictmentalleged that, between July 27, 2000and November 2, 2000, PatriciaSullivan submitted fraudulent claimsto MetLife Auto and Home InsuranceCompany in order to seek reim-bursement for prescriptions purport-edly paid for by her, when, in fact,she was not entitled to reimburse-ment for the cost of the prescriptions.The indictment also alleged that

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Patricia Sullivan altered and/or falsifiedprescription medication records insupport of the fraudulent claims. Shewas charged in this indictment withhealth care claims fraud, theft by de-ception, and destruction, falsificationor alteration of records relating tomedical care.

In a second, separate indictment,Patricia was charged, along with herhusband Paul Sullivan, with con-spiracy, health care claims fraud, at-tempted theft by deception, and de-struction, falsification or alteration ofrecords relating to medical care. Thesecond indictment alleged that, be-tween December 17, 2001 and March5, 2002, Patricia Sullivan, in concertwith her husband, Paul Sullivan, con-spired to defraud Blue Cross/BlueShield by submitting fraudulent insur-ance claims totaling over $75,000 forreimbursement for prescriptions theyfalsely claimed to have purchasedfrom Marquet Pharmacy. Accordingto the indictment, they falsifiedmedical records and submittedthem to Blue Cross/Blue Shield insupport of their phony claim.

Subsequently, Patricia Sullivanpled guilty to health care claimsfraud, theft by deception, and at-tempted theft by deception and PaulSullivan pled guilty to conspiracy. OnMay 30, 2003, Patricia Sullivan wassentenced to four years in Stateprison and ordered to pay restitutionin the amount of $18,578 to BlueCross/Blue Shield and $14,258 toMetLife, as well as a $25,000 civil in-surance fraud fine. On the samedate, Paul Sullivan was entered intothe PTI Program conditioned uponpaying restitution to Blue Cross/BlueShield in the amount of $18,578 anda $25,000 civil insurance fraud fine.State v.

Robert J. BermanOn May 20, 2003, Robert J.

Berman pled guilty to an Accusationcharging him with theft by deception.Berman admitted that, between No-vember 1, 1999 and December 29,2000, he submitted approximately 56health care reimbursement claims toAetna Insurance Company. Of the$8,222 in claims submitted, Aetnapaid Berman $3,082. Some of theclaims were false, including claimsfor services purportedly rendered tohis daughter who was not entitled tohealth care coverage. Additionally,Berman inflated the amount of cer-tain claims in order to steal moneyfrom Aetna Insurance. On July 24,2003, Berman was sentenced to fiveyears probation conditioned uponpaying $3,082 in restitution and a$2,500 civil insurance fraud fine.

State v.Ruth Schwartz

A State Grand Jury returned anindictment charging Ruth Schwartzwith health care claims fraud andtheft by deception. According to theindictment, Schwartz submitted anumber of legitimate prescriptions toseveral pharmacies, but intentionallydid not pick them up or pay for them.Schwartz submitted the prescriptionsbecause she knew she would re-ceive payment for the prescriptiondrugs from Horizon Blue Cross/BlueShield, administrator of herhusband’s prescription plan throughhis employment as a union electri-cian, even if she never picked themup. Schwartz was “reimbursed”$19,569 by Horizon for the prescrip-tions. Schwartz pled guilty to theft bydeception and, on November 11,2003, was sentenced to three yearsprobation, and payment of restitutionin the amount of $19,569 and a$5,000 civil insurance fraud fine.

State v.James Clark

On July 16, 2003, a State GrandJury returned an indictment chargingJames Clark with two counts of theftby deception and one count of healthcare claims fraud. Clark was thepresident of Home Health Care Cen-ter, Inc., (HHC), located in Hoboken,as well as the Director of the now de-funct Medical Care Management,Inc., d/b/a Mile Square MedicalGroup, formerly located inWeehawken. HHC is a business thatdelivers prescription medicationsfrom pharmacies to persons’ homesand is not licensed to dispense orotherwise sell prescription medica-tions. Mile Square Medical Groupwas a medical facility staffed by vari-ous physicians. Clark, himself, wasneither a medical service providernor a licensed pharmacist.

According to the indictment, be-tween December 1, 1996 and Sep-tember 11, 1998, Clark misrepre-sented to Horizon Blue Cross/BlueShield, third party claims administra-tor for the New Jersey State HealthBenefits Program, that HHC was li-censed to supply, dispense, and sellprescription medications which weredelivered to patients of Mile SquareMedical Group. According to the in-dictment, Clark misrepresented toHorizon that HHC was, therefore,entitled to payment or reimburse-ment from the State Health BenefitsPlan for the cost of the medications.The indictment further alleged that,for many prescriptions HHC sold, itgrossly inflated the cost over theusual and customary price for claimswhich it submitted to the StateHealth Benefits Program. The indict-ment also alleged that Clark submit-ted fraudulent health care reimburse-ment claims to Horizon Blue Cross/Blue Shield and the State Health

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Benefits Program for prescriptionmedications that were neither dis-pensed nor delivered.

The State intends to prove thatClark submitted as many as approxi-mately 400 fraudulent insuranceclaims for various medications, ap-proximately 330 of which may havebeen for medications that were neverdispensed and never delivered to thepatients. The total amount of fraudu-lent billings allegedly submitted byClark to Horizon Blue Cross/Blue

moves unwanted hair, and submittednumerous fraudulent health insur-ance claims to two insurance com-panies. It is alleged that Acquaire,using the business name “HighMountain Medical Center,” submittedfraudulent claims to United HealthGroup Insurance Company andAetna Insurance Company totaling$908,843. The claims were allegedto be fraudulent because Acquairebilled hair removal by means of elec-trolysis as though it was a reimburs-able medical surgical procedureknown as a debridement which canonly be done by, or under the super-vision of, a properly licensed medicalprovider. Acquaire was not a li-censed medical service provider,was allegedly not qualified to per-form medical or surgical procedures,and would not have been authorizedto bill the insurance companies forsuch procedures. Acquaire’s case ispending trial.

State v.Christine Schmidtand Peter Schmidt

Christine Schmidt pled guilty toan Accusation charging her withforgery. Schmidt admitted she hadknowledge of pharmacy proceduresand submitted nine forged prescrip-tions to the De Rosa Pharmacy andthe Rossmore Pharmacy, both inNewark. On August 11, 2003, shewas sentenced to three years pro-bation. Peter Schmidt, ChristineSchmidt’s former husband, was ar-rested by OIFP investigators andcharged with theft by deception andforgery for forging blank prescriptionforms in the name of Dr. OrmondWilkie and submitting phony pre-scription reimbursement claims ofover $3,600 to Aetna Insurance. Pe-

Shield and the State Health BenefitsProgram was in excess of $365,000,of which Horizon paid more than$343,000. The fraudulent prescriptionscheme allegedly involved at leasteight different patients. Clark’s case ispending trial.

State v.Florence Acquaire

On October 30, 2003, a StateGrand Jury returned an indictmentcharging Florence Acquaire with twocounts of health care claims fraud,two counts of attempted theft by de-ception, and two counts of theft bydeception. According to the indict-ment, between July of 1998 and Aprilof 2001, Acquaire rendered servicesas an electrologist, a person who re-

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ter Schmidt pled guilty to theft by de-ception and forgery and, on May 30,2003, was sentenced to three yearsprobation and payment ofrestitution of $3,642 to AetnaInsurance Company.

FraudulentDisability Claims

State v.Dr. Ngan Hirai

A State Grand Jury returned anindictment charging Ngan Hirai, adentist licensed to practice in NewJersey, with theft by deception for fil-ing a fraudulent disability claim. Ac-cording to the indictment, Hirai con-tinued to practice dentistry while shefalsely claimed to be disabled andcollected total disability insurancepayments of $155,399 pursuant to adisability insurance policy issuedthrough General American InsuranceCompany. The insurance companyterminated her benefits after deter-mining that she had been practicingdentistry despite the purported dis-ability. On February 10, 2003, Hiraiwas admitted into the PTI Programconditioned upon performing 50hours of community service.

State v.Surrinder Aggarwal

On January 31, 2003, SurrinderAggarwal pled guilty to an Accusa-tion charging him with theft by de-ception and falsifying or tamperingwith records. Aggarwal admitted that,between March 1, 1991 and May 31,2001, he fraudulently received dis-ability insurance benefits totalingmore than $1 million under both So-cial Security and a private disabilityinsurance policy underwritten byNorthwestern Mutual. A joint investi-gation by OIFP and the Division of

Criminal Justice’s Social Security andFinancial Crimes Units revealed thatAggarwal’s purported disabilities werefraudulent and, during the time of thepurported disability, Aggarwal hadbeen involved as an owner/operator ofnumerous businesses in the New Jer-sey/New York area. On October 24,2003, Aggarwal was sentenced to fouryears in State prison, ordered to payrestitution in the amount of$1,150,717 and pay a $15,000 civil in-surance fraud fine.

State v.Michael Cicconetti

On February 24, 2003, MichaelCicconetti pled guilty to an Accusa-tion charging him with theft by de-ception. In 1999, during the courseof his employment at International-Matex Tank Terminals located inBayonne, Cicconetti suffered a workrelated injury to his shoulder, pro-ceeded with a course of therapy, andcollected disability insurance ben-efits. Cicconetti admitted that, be-tween June 3, 1999 and September7, 1999, while collecting approxi-mately $4,216 in disability insurancebenefits from his employer and Lib-erty Mutual Insurance Company, hewas able to work and did actuallywork at a hardware store, despitemisrepresenting that his injury pre-vented him from working. Cicconettiwas sentenced on May 21, 2003, totwo years probation conditionedupon paying restitution in the amountof $4,216 and a civil insurance fraudfine of $2,500.

State v. W.Lance Kollmer

On March 26, 2003, a StateGrand Jury returned an indictmentcharging W. Lance Kollmer, a board-certified plastic surgeon, with theft bydeception. According to the indict-

ment, Dr. Kollmer submitted a waiverof life insurance premiums claim toUnumProvident, falsely claiming thathe was totally disabled from thepractice of plastic surgery and was,therefore, entitled to have his life in-surance premiums waived. By doingso, Kollmer allegedly stole life insur-ance premium coverage worth$9,000. This case is pending trial.Kollmer also faces charges under aprior indictment which charged himwith the theft of more than $300,000of insurance monies from Sentry In-surance Company and AmericanGeneral Insurance Company for al-legedly falsely claiming that he wastotally disabled from practicing as aplastic surgeon when, in fact, he per-formed dozens of surgical proce-dures during the period of hisclaimed disability.

State v.Barbara D. Dickens

On May 8, 2003, a State GrandJury returned an indictment chargingBarbara D. Dickens with theft by de-ception and falsifying records. Ac-cording to the indictment, betweenApril of 1997 and January of 1999,Dickens represented to CIGNA In-surance Company that she was to-tally disabled and, as a result, unableto maintain employment. Pursuant toa long-term disability insurancepolicy, CIGNA paid Dickens a total of$25,305 in disability insurance ben-efits. The indictment alleged that dur-ing the period in question, Dickenswas, in fact, continuously employedand, therefore, ineligible to receivedisability insurance benefits.Dickens’ case is pending trial.

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State v.Gerard M. Zaccardi

A State Grand Jury returned anindictment charging Gerard M.Zaccardi with theft by deceptionand falsifying records. The indict-ment alleged that Zaccardi fraudu-lently applied for disability insur-ance benefits with the Social Secu-rity Administration (SSA) followinga “slip and fall” at his place of em-ployment, after termination of tem-porary benefits payments fromworkers’ compensation. On theSSA application, Zaccardi claimedan inability to return to work andfunction normally at home due tohis purported disability. After con-ducting an investigation which in-cluded surveillance, authorities de-termined that during this time pe-riod, Zaccardi was employed at anauto body shop and did not appearto be disabled. Zaccardi pled guiltyto both counts of the indictmentand, on September 19, 2003, wassentenced to five years probationand ordered to pay restitution in theamount of $49,287.

State v.Jose Susana-Rosario

On October 1, 2003, a StateGrand Jury charged Jose Susana-Rosario with theft by deception. Ac-cording to the indictment, betweenDecember of 2002 and February of2003, Susana-Rosario fraudulentlyreceived over $5,000 in workers’compensation benefits from Ameri-can Home Assurance Company(AIG). It is alleged that Susana-Rosario reported that he injured hisback while performing his duties asan employee at Eastern SeaboardPackaging in Edison when, in fact,he sustained the injuries at home.Susana-Rosario’s case ispending trial.

State v.Campbell Halleran

On December 2, 2003, a StateGrand Jury returned an indictmentcharging Campbell Halleran withattempted theft by deception,health care claims fraud, and falsi-fying records. According to the in-dictment, on July 18, 2002,Halleran, who was employed byDick’s Sporting Goods, Inc., inMoorestown, submitted a fraudu-lent workers’ compensation claimto his employer. Halleran allegedlyclaimed that he had injured hisback the day before while movingstore inventory from the loadingdock to the interior of the store.The State intends to prove that, infact, another employee of Dick’s,had moved the inventory, and thatHalleran had not injured himself ashe had claimed. The workers’ com-pensation claim had been submit-ted to the Chubb Group of Insur-ance Companies which denied theclaim and referred the matter toOIFP for further investigation.Halleran’s case is pending trial.

State v.Suzanne Shenk

On October 23, 2003, a PassaicCounty Grand Jury returned an in-dictment charging Suzanne Shenkwith theft by deception, forgery, andfalsifying documents. According tothe indictment, between February 1,2002 and May 14, 2002, Shenkwrongfully collected disability insur-ance payments from Aetna Insur-ance Company by concealing thefact that she was not disabled andwas working at a physician’s office.The indictment also alleged thatShenk forged a letter and falsifiedanother letter in support of her dis-ability claims to Aetna Insurance.Shenk’s case is pending trial.

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State v.Albert H. Beebe

Albert H. Beebe was charged bya State Grand Jury indictment withtheft by deception and falsifyingrecords. The indictment alleged that,between December 11, 1997 andMay 24, 1999, Beebe committedtheft in connection with his receipt ofinsurance disability benefits when heknowingly failed to notify Hartford In-surance Company that he had alsobegun to receive Social Securitybenefits. According to Beebe’s Hart-ford disability insurance policy, hisinsurance disability benefits had tobe “coordinated” with any disabilitybenefits he also received from SocialSecurity. Beebe’s Hartford insurancedisability benefits were to be reducedif he also received disability benefitsfrom the Social Security Administra-tion. The indictment also alleged thatin support of Beebe’s thefts, Beebeallegedly falsely answered “no” toquestions on a Hartford question-naire which asked whether he wasreceiving, or expected to receive,Social Security benefits. Beebe is al-leged to have wrongfully receivedover $29,000 in disability benefits.On January 24, 2003, Beebe wasadmitted into the PTI Program condi-tioned on paying restitution of ap-proximately $29,000.

Health InsuranceUnderwriting/ApplicationFraud

State v.Fred D’Avanzoand Ralph D’Avanzo

On January 10, 2003, Fred andRalph D’Avanzo were each sen-tenced to three years probation con-ditioned upon completing 200 hoursof community service, paying$10,765 in restitution to Horizon BlueCross/Blue Shield, and a $1,500 civilinsurance fraud fine. Fred D’Avanzohad previously pled guilty to an Ac-cusation charging him with theft bydeception and falsifying or tamperingwith records while his brother, RalphD’Avanzo, had pled guilty to a sepa-rate Accusation charging him withtheft by deception. Fred D’Avanzowas the president of Coverall StaffServices, Inc., a temporary employ-ment agency located in Linden. Headmitted that, in October of 1995,he obtained health insurance bymeans of a Small Group HealthBenefits Policy insurance contractwith Horizon Blue Cross/Blue Shieldof New Jersey. The health insur-ance policy required that employeeseligible for group health care ben-efits be permanent, full-time em-ployees who work a minimum of 25hours per week for Coverall. Be-tween September of 1997 and Octo-ber of 2000, Fred D’Avanzo wrong-fully obtained health insurance forhis brother, Ralph, and two otherpersons under that policy by signinga New Jersey Small Employer Certi-fication falsely claiming that hisbrother, Ralph, and the two otherpersons were full-time employees ofCoverall and worked 40 hours ormore per week when, in fact, theywere not full-time employees.

Ralph D’Avanzo admitted that he waswrongfully enrolled in Coverall’s grouphealth insurance policy, that he wasnot a full-time employee of Coverall,and was, in fact, residing in Florida.Ralph also admitted submitting$104,750 in insurance claims to BlueCross/Blue Shield, of which BlueCross/Blue Shield paid $53,178.

State v.Barry W. Kallenberg

On December 19, 2003, BarryKallenberg pled guilty to an Accusa-tion which charged him with theft bydeception. Kallenberg admitted thathe created a fictitious business, pur-portedly a real estate managementbusiness, in order to purchasegroup health insurance. On or aboutFebruary 21, 1999, Kallenberg ap-plied to Horizon Blue Cross/BlueShield of New Jersey for a smallemployer health benefits policy inorder to obtain health coverage at alower premium employee group ratefor five people who were not entitledto the coverage because they werenot bona fide employees of a bonafide business. The investigation re-vealed that, between January of1996 and January of 1999, healthinsurance claims were submitted toHorizon Blue Cross/Blue Shield onbehalf of the purported employeestotaling $111,500. Kallenberg isawaiting sentencing.

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Health Insurance ClaimsInvolving Identity Fraud

State v.Mynerva Jean

On June 4, 2003, Mynerva Jeanpled guilty to an Accusation chargingher with theft by deception. Jean ad-mitted that she took the health insur-ance benefits card issued to her sis-ter, Wendy Jean, and sought treat-ment from a doctor. Mynerva Jeanadmitted that she fraudulently usedthe card to obtain health insurancecoverage in her sister’s name onthree separate dates between De-cember 24, 2001, and January 15,2002. The treating medical serviceprovider submitted claims to StateFarm Insurance Company in theamount of $1,415 and State Farmpaid $877 for the treatments ren-dered to Mynerva Jean while shewas impersonating her sister. StateFarm began the investigation whenWendy Jean was questioned aboutsome of the medical services pro-vided and she advised State Farmthat she never received those medi-cal services. Mynerva Jean was ad-mitted into the PTI Program on July24, 2003, conditioned upon perform-ing 60 hours of community serviceand paying a $4,000 civil insurancefraud fine.

State v.Norma Rivera and Veronica Pantoja

On January 30, 2003, NormaRivera and her daughter, VeronicaPantoja, pled guilty to separate Ac-cusations charging them with theft bydeception. Rivera and Pantoja ad-mitted that, between November of1999 and September of 2000,Pantoja assumed Rivera’s identity inorder to obtain medical insurance to

Phony “Slip and Fall” Claims

State v.Bruce Robert Tarlowe

Following a 12 day jury trial,Bruce Robert Tarlowe, a licensed in-surance agent, was convicted ofhealth care claims fraud and at-tempted theft by deception for plan-ning and staging a phony “slip andfall” accident. The Union County juryfound Tarlowe guilty of falsely claim-ing that, on April 12, 1998, he“slipped and fell” on a piece of let-tuce on the floor of the produce aislewhile shopping at the A&P Super-market in Union Township. Unawarethat the phony “slip and fall” at thesupermarket was recorded on video-tape by a store camera, Tarlowe hadfurther claimed that he sustained se-rious and permanent injuries andwas unable to work as a result ofthese injuries. The jury also foundthat, between April 12, 1998 andMarch 10, 1999, Tarlowe submitted20 fraudulent health insuranceclaims to the United States Life In-surance Company for medical billstotaling $5,730. As a result of thesesubmissions, the United States LifeInsurance Company paid out a totalof $3,002 to the medical service pro-viders. Tarlowe had also filed a civilsuit against A&P in August of 1998which was dismissed by stipulationof the parties in January of 1999. OnFebruary 14, 2003, Tarlowe wassentenced to three years in Stateprison and payment of restitution inthe amount of $2,724 and a $1,000criminal fine.

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cover dermatology treatments.Norma Rivera, who was covered un-der the State Health Benefits Planthrough her husband, obtained a re-ferral for dermatology treatmentsfrom her primary care physician andgave it to Pantoja, who assumed hermother’s identity to obtain insurancecoverage for the dermatology treat-ments. Aetna and Blue Cross/BlueShield paid out over $800 for officevisits and prescriptions. After theirpleas, Rivera and Pantoja were ad-mitted into the PTI Program condi-tioned upon paying restitution in theamount of $962 to the State HealthBenefits Plan and serving 50 hoursof community service.

State v.Lenann L. Hill

On January 16, 2003, Lenann L.Hill pled guilty to an Accusationcharging her with identity theft. Hilladmitted that, on October 4, 1999,she went to the emergency room atWayne General Hospital and identi-fied herself as the wife of ClarkMiller. At that time, Miller was em-ployed by the County of Passaic and,as a county employee, he and hiswife were entitled to health care cov-erage under an insurance policy is-sued by Passaic County and admin-istered by Insurance Design Admin-istrators. Hill, who had no insuranceof her own, also admitted that, onOctober 5, 1999, using the name ofMiller’s wife, she had a surgical pro-cedure done at Wayne General Hos-pital. The total cost of services paidout by Insurance Design Administra-tors for Hill’s medical treatment was$2,430. On the day of her guilty plea,Hill was admitted into the PTI Pro-gram conditioned upon paying resti-tution in the amount of $2,430 toPassaic County.

State v.Michael Daye and Darryl Walker

On April 2, 2003, a HudsonCounty Grand Jury returned an in-dictment charging Michael Dayeand Darryl Walker with theft by de-ception. According to the indictment,between June of 1999 and Octoberof 1999, Daye assumed Walker’sidentity in order to obtain medicaltreatments at the KhaleidoscopeHealth Care/Parkside Medical Cen-ter under Walker’s Horizon BlueCross/Blue Shield insurance cover-age. Khaleidoscope submitted billsto Horizon Blue Cross/Blue Shieldfor Daye’s treatment in the amountof $2,153, of which Horizon paid$1,564. Daye pled guilty to theft bydeception and, on October 9, 2003,Daye was sentenced to two yearsprobation, ordered to pay $1,564 inrestitution, and a $1,000 civil insur-ance fraud fine. The indictment asto Walker was dismissed on Octo-ber 10, 2003. Walker was assesseda civil insurance fraud penaltyof $1,000.

Insurance RelatedTax Fraud

State v.Dr. Samuel Evenstein

Dr. Samuel Evenstein pled guiltyto an Accusation charging him withthree counts of failing to pay NewJersey gross income tax with intentto evade payment. A joint investiga-tion between OIFP and the New Jer-sey Division of Taxation determinedthat Evenstein failed to report over$500,000 in income in 1999 andowed over $50,000 in New JerseyState income taxes with respect tothe unreported income. On January24, 2003, Evenstein was admittedinto the PTI Program conditionedupon paying restitution in the amountof $71,748.

Life Insurance Fraud

State v.Daouda Traore

On October 31, 2003, DaoudaTraore was sentenced to two yearsprobation with 38 days jail credit andordered to perform 75 hours of com-munity service after previouslypleading guilty to theft by deceptionin conjunction with a scam to filephony life insurance claims. At hisplea hearing, Traore admitted that,between December 15, 2000 andDecember 5, 2001, he purchased orincreased the benefits for two life in-surance policies, one from AIG LifeInsurance Company and one fromUnited Omaha Life Insurance Com-pany. Specifically, he admitted that,on December 15, 2000, he amendedhis life insurance policy with AIG LifeInsurance Company to include anadditional death benefit of $125,000for a woman, Salimata Traore, whohe falsely claimed was his wife. He

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also amended his AIG Life InsuranceCompany policy to include additionaldeath benefits of $50,000 for a boy,Abdoulaye Traore, who he claimedwas his son. Additionally, Traore ad-mitted that, on December 26, 2000,he purchased another accidentaldeath life insurance policy fromUnited of Omaha Life InsuranceCompany in the amount of $200,000on the life of Salimata Traore, and inthe amount of $20,000 on the life ofAbdoulaye Traore. Finally, Traoreadmitted that, on December 27,2000, he purchased yet another$12,000 life insurance policy for hispurported son, Abdoulaye Traore.Traore admitted that both his pur-ported wife and his purported sonwere fictitious persons, that he sub-mitted false claims to the insurancecompanies that they had died acci-dental deaths, and that the claimswere submitted so that he could bilkthe insurance companies. Traore ad-mitted, in particular, that on January4, 2001, he submitted a phony claimwith AIG claiming that both his pur-ported wife and his purported sonwere killed in an automobile accidentin Africa. In support of the claim,Traore also submitted phony hospitalrecords, death certificate forms, andpolice reports substantiating the au-tomobile accident and the deaths ofhis purported wife and son. The totalamount of fictitious claims submittedby Traore was $407,000. Both insur-ance companies denied the claims.

State v.Mr. N.A. and Mrs. N.A.

On February 7, 2003, OIFP In-vestigators arrested Mrs. N.A. andcharged her with attempted theft bydeception. The investigation re-vealed that, between November of1998 and June of 2002, Mrs. N.A.and her husband, Mr. N.A., whosefull names are withheld for investiga-tive reasons, falsely applied for 11life insurance policies in the total ap-proximate amount of $5 million.Among the insurance companies vic-timized by this scheme were ValleyForge Life Insurance Company(CNA), Provident Mutual InsuranceCompany, First Colony Insurance,Banner Insurance, North AmericanCasualty, Great American Insurance,and Equitable Insurance. The inves-tigation further revealed that Mr. andMrs. N.A. submitted death claims tothe insurance companies falselyclaiming Mr. N.A. died in Damascus,Syria. They also submitted a falsedeath certificate in support of theclaims. When Mrs. N.A. was ar-rested, her husband, Mr. N.A., re-mained a fugitive and was believedto be in Syria. On July 7, 2003, Mr.N.A. was arrested by OIFP investiga-tors on an outstanding warrant.On August 12, 2003, Mr. and Mrs.N.A. pled guilty, respectively, to twoseparate Accusations. The first Ac-cusation charged Mrs. N.A. with falsi-fying records. Mr. N.A. was chargedin the second Accusation with at-tempted theft by deception. On Octo-ber 24, 2003, Mr. N.A. was sen-tenced to five years probation andordered to pay a $5,000 civil insur-ance fraud fine. On the same date,Mrs. N.A. was sentenced to fiveyears probation and also ordered topay a $5,000 civil insurance fraudfine. She was also assessed a$1,000 insurance surcharge.

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State v.Patricia West

Patricia West was charged in aState Grand Jury indictment withtwo counts each of theft by decep-tion and uttering a forged instru-ment. The indictment alleged that,in June of 1998, Patricia Westfraudulently represented herself tobe Christine Franklin, the benefi-ciary of a life insurance policy onthe life of Christine Franklin’sdaughter, Desiree Franklin, whohad died in a motor vehicle accidenton November 3, 1996. West alleg-edly filed a fraudulent life insuranceclaim with the State of New JerseyGroup Life Insurance Plan adminis-tered by Prudential Life InsuranceCompany, which issued a deathbenefits check in the name of Chris-tine Franklin in the amount of$49,263. West allegedly endorsedthe check by forging Franklin’sname and deposited the check intoher own personal bank account.

The indictment also charged thatWest fraudulently represented her-self to be Christine Franklin to theState of New Jersey Division of Pen-sions and Benefits in order to collectdeath claim benefits based onDesiree Franklin’s prior public em-ployment. Prior to her death, DesireeFranklin had been employed byRutgers University and was entitledto various State benefits, includingsurvivor benefits for a designatedbeneficiary. According to the indict-ment, West forged ChristineFranklin’s name on the death ben-efits check issued to Franklin in theamount of $1,285 and deposited themoney in her personal bank account.On August 11, 2003, West was ad-mitted into the PTI Program condi-tioned upon paying $49,263 in resti-tution to Prudential Life and perform-ing 50 hours of community service.

InsuranceProfessional FraudInsurance Agent Fraud

State v.Robert Massa, Massaand Miller Agency, Inc.,and the Associated ProgramsAgency, Inc.

Robert Massa, a former OceanCounty insurance agent, pled guiltyto an Accusation which charged himwith conspiracy and theft by decep-tion. Massa was the former ownerand operator of two defunct insur-ance agencies known as the Massaand Miller Agency, Inc., and the As-sociated Programs Agency, Inc.,both located in Lakewood. Bothagencies also pled guilty to con-spiracy and theft by deception inseparate Accusations. Massa admit-ted that he conspired to fraudulentlyobtain and cash checks totaling ap-proximately $5.6 million from Na-tional Premium Plan, A1 Credit Cor-poration, and Agency Services, Inc.,insurance premium finance compa-nies which lend small businessesmoney to pay insurance premiumsfor business coverage. On January17, 2003, Massa was sentenced tofive years in State prison. In addition,Massa and his corporations, Massaand Miller Agency, Inc., and Associ-ated Programs, Agency, Inc., wereordered to pay $844,000 in restitu-tion. The corporations were eachsentenced to five years probation.Michael Miller and an attorney,Stanley Gulkin, were previously sen-tenced to State prison in connectionwith the scam.

State v.Douglas Ross

On January 24, 2003, DouglasRoss, a licensed insurance agentand the owner and operator of Dou-glas W. Ross Associates, was in-dicted by a State Grand Jury andcharged with theft by failure to makerequired disposition of property re-ceived and simulating a motor ve-hicle insurance identification card.Douglas W. Ross Associates is acommercial insurance brokeragecompany which obtains insurancecoverage for its small business cli-ents by borrowing the funds frompremium financing companies andthen forwarding them to insurancecarriers for payment of the smallbusinesses’ insurance premiums.According to the indictment, betweenFebruary of 2001 and August of2002, Ross fraudulently obtainedover $121,000 in loans from AMGROPremium Financing Company alleg-edly to finance several insurancepolicies. The indictment alleged thatRoss obtained the loans by providingfalse documentation representingnon-existent policies.

The indictment further allegedthat Ross collected insurance pre-mium payments from five commer-cial clients but failed to remit the pre-miums to the insurance carriers, andallegedly diverted the premium pay-ments to his own personal use. Rosspled guilty to the charges in the in-dictment and, on September 22,2003, he was sentenced to fiveyears probation and ordered to pay$85,288 in restitution.

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State v.Harry DelBosco

On November 14, 2003, HarryDelBosco, a licensed insuranceagent and former president of an in-surance agency known as GardenState Brokers, Inc., was sentencedto five years in State prison and pay-ment of $887,000 in restitution afterpleading guilty to an Accusationcharging him with theft by failure tomake required disposition of prop-erty received. Garden State Brokers,Inc., formerly doing business in EastHanover, was an insurance agencythat also brokered insurance pre-mium financing loans for small busi-nesses, mainly in the trucking indus-try. Following an extensive OIFP in-vestigation, DelBosco admitted thathe stole at least $887,000 entrustedto him by several premium financecompanies, including AFCO CreditCorp., First Insurance Funding Cor-poration and AMGRO Premium Fi-nancing, Inc. The funds had beengiven to DelBosco to be used for thefinancing of insurance premiums onbehalf of numerous commercialinsureds. Instead, DelBosco misap-propriated and converted the fundsto his own use.

State v.Robinson D. Barleycorn

Robinson Barleycorn wascharged in a State Grand Jury indict-ment with one count of theft by fail-ure to make required disposition ofproperty received. The indictment al-leged that, between June 1, 1994and September 15, 1997,Barleycorn, while acting as an insur-ance agent for Capacity Marine In-surance Agency, received $321,000in insurance premium paymentsfrom a Connecticut tugboat operatorto purchase marine insurance for thecorporation’s tugboat operation, but

used the money to pay his own per-sonal expenses instead of forward-ing it to the insurance carrier.Barleycorn was arrested in Louisianain August of 2002 and extradited toNew Jersey the following month toanswer the charges in the indict-ment. Barleycorn pled guilty and, onApril 25, 2003, was sentenced to fiveyears probation with credit for 249days served in county jail and pay-ment of $1,000 in restitution.

State v.Odell Coleman

On August 15, 2003, OdellColeman was sentenced to fouryears in State prison and ordered topay $101,657 in restitution to AllianzLife Insurance Company. Coleman,a Philadelphia resident who was aninsurance agent licensed in New Jer-sey, had previously pled guilty to anAccusation charging him with theftby failure to make required disposi-tion of property received and theft bydeception. Coleman admitted that inhis capacity as an insurance agentfor Allianz Life Insurance Companyof North America and LifeUSA Insur-ance Company, he convinced aMoorestown woman to purchase anannuity worth $100,000. Colemanadmitted that on August 16, 1999, heaccepted a check from the woman inthe amount of $100,000. Instead ofsubmitting the money to Allianz andLifeUSA for the annuity, Colemandeposited the check into his ownbank account for his personal use.

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State v.Farid S. Elgebaly

On May 27, 2003, Farid S.Elgebaly pled guilty to all counts ofan indictment charging him with theftby deception, misapplication of en-trusted property, and simulating amotor vehicle insurance identificationcard, and to an Accusation charginghim with tampering with witnessesand informants. A bench warrant forElgebaly’s arrest was issued after hefailed to appear for sentencing.Elgebaly, a former licensed insur-ance producer who transacted busi-ness on behalf of the New JerseyPersonal Automobile Insurance Plan(PAIP), had accepted money fromvarious individuals for automobile in-surance premiums but failed to remitthe money to PAIP or secure auto-mobile insurance for the individualswho paid the premium money.Elgebaly also distributed fraudulentinsurance identification cards tosome of his clients. Elgebaly’s insur-ance producer’s license was revokedin February of 2001.

State v.Stanley Span and Paul Kaplan

On July 17, 2003, Stanley Spanand Paul Kaplan were named in aState Grand Jury indictment. Spanwas charged with conspiracy, theftby deception, theft by failure to makerequired disposition of property re-ceived, and simulating a motor ve-hicle insurance identification card,while Kaplan was charged in thesame indictment with conspiracy,theft by deception, theft by failure tomake required disposition of prop-erty received, and issuing badchecks. Both defendants are li-censed insurance agents and wereofficers of the now defunct Span As-sociates Insurance Agency locatedin Springfield. According to the in-

dictment, between January of 2000and December of 2001, Span andKaplan stole approximately $20,000by selling fictitious insurance policiesto insurance purchasers, collectinginsurance premium monies from thepurchasers, and failing to remit themonies to the insurance companies.

The indictment also alleged that,between February of 2002 and Mayof 2002, Span distributed phony au-tomobile insurance identificationcards purportedly issued by the NewJersey Personal Automobile Insur-ance Plan (NJPAIP). It further al-leged that, in November of 2000,Kaplan cashed a $4,000 checkdrawn on a closed account, knowingthat the bank would not honor thecheck. Span pled guilty to theft bydeception and, on October 24, 2003,he was sentenced to three yearsprobation and ordered to pay restitu-tion in the amount of $6,740. Thecase as to Kaplan is pending trial.

State v.Joseph Binczak

A State Grand Jury indicted Jo-seph Binczak, an insurance agentlicensed in New Jersey, for theft bydeception and falsifying records.According to the indictment, Binczakwas employed by the Ukranian Na-tional Association (UNA) as an in-surance sales manager responsiblefor maintaining life insurance annu-ity accounts for members of UNA.The indictment alleged that, withoutauthorization, Binczak withdrewover $600,000 from the annuity ac-counts of seven members of UNAand converted the proceeds to hisown use. Binczak also allegedly fal-sified a letter dated September 14,2000, authorizing him to withdraw$30,000 from an insured’s annuityaccount held at UNA, and anotherdocument authorizing him to with-

draw $45,000 from another insured’sannuity account held at UNA. OnSeptember 2, 2003, Binczak pledguilty to theft by deception and ispending sentencing.

State v.Vito GrupposoOn May 30, 2002, armed with an ar-rest warrant for Vito Grupposo and asearch warrant to search his busi-ness premises located inParsippany, Cedar Knolls and Wash-ington, New Jersey, OIFP investiga-tors seized the books and records ofGrupposo’s insurance agency andinsurance premium finance busi-nesses. Grupposo, a licensed insur-ance agent, was arrested andcharged with three counts of theft byfailure to make required dispositionof insurance premiums obtainedfrom several of his insurance cus-tomers. Grupposo is alleged to havewrongfully engaged in insurance pre-mium financing transactions and tohave embezzled insurance premi-ums entrusted to him by insureds.Grupposo appeared before JudgeBozonelis and bail was set in theamount of $100,000. The case ispending grand jury presentation.

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Insurance CarrierEmployee Fraud

State v.Carl Prata, et al.

On August 25, 2003, Carl Pratawas sentenced to five years in Stateprison and ordered to pay $45,000 inrestitution to Allmerica InsuranceCompany and $5,000 in restitution toSt. Paul Insurance Company afterpleading guilty to conspiracy and theftby deception. Prata, formerly em-ployed as an insurance claims ad-

and been sentenced for, participatingin the scheme with Prata. Of the ap-proximately 43 co-conspiratorscharged in the Prata scheme, eightpersons were sentenced to jail, andthe sentences of the others defen-dants included probation or admis-sion to the PTI Program contingentupon paying restitution and civil in-surance fraud penalties.

State v.Mustafa Azme

On July 14, 2003, Prata co-con-spirator, Mustafa Azme, was sen-tenced to five years in State prison.Azme had previously pled guilty toan Accusation charging him withconspiracy and theft by deception.Azme admitted that, between Janu-ary of 1998 and November of 2000,he conspired with others to defraudthe Allmerica Insurance Companyand the St. Paul Insurance Com-pany by claiming to have sustainedbodily injuries in automobile acci-dents and fraudulently accepting in-surance claim checks from the in-surance companies for the claims.Azme accepted one settlementcheck in the amount of $12,500from Allmerica and two settlementchecks from the St. Paul InsuranceCompany in the amounts of $10,000and $38,000. As part of the con-spiracy, Azme recruited nine per-sons to receive fraudulent insuranceclaims checks. The nine persons re-cruited by Azme were issued nineinsurance settlement checks total-ing $113,500. Of the nine personsrecruited by Azme, six have pledguilty to charges of conspiracy and/or theft by deception, while chargesagainst the remaining three personsare pending. Azme also paid restitu-tion of $51,750 prior to his sentencing.

juster with the St. Paul InsuranceCompany and the Allmerica InsuranceCompany, had been indicted by aState Grand Jury and charged withconspiracy and theft by deception forallegedly issuing approximately 45fraudulent bodily injury automobile in-surance settlement checks totalingsome $533,000 to conspirators whowere not entitled to them. Prata wouldaccess his company’s claims com-puter and issue insurance claimssettlement checks for injuries purport-edly sustained by people who had notactually been in automobile accidents.He would then accept part of the sto-len money as a kickback. In thecourse of the investigation whichspanned several years, a number ofco-conspirators have pled guilty to,

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State v. H.K.On January 31, 2003, H.K., an-

other Prata co-conspirator, whose fullname has been withheld for investiga-tive reasons, was sentenced to fiveyears probation conditioned upon 178days in county jail, and payment ofrestitution in the amount of $54,000and a $10,000 civil insurance fraudfine. H.K. had pled guilty to an Accu-sation charging him with conspiracy,theft by deception, and terroristicthreats for his role in accepting six ofthe phony settlement checks in theamount of $54,000.

State v.Carol Cappuccio

On September 19, 2003, anotherPrata co-defendant, CarolCappuccio, was sentenced to fiveyears probation conditioned uponserving 90 days in county jail, andordered to pay $16,000 in restitutionas well as an $8,000 civil insurancefraud fine. Cappuccio had previouslypled guilty to an indictment chargingher with conspiracy and theft by de-ception. Cappuccio was recruited byMustafa Azme and accepted afraudulently obtained settlementcheck issued by Allmerica InsuranceCompany in the amount of $16,000for a purported accident in which shewas not involved. Cappuccio depos-ited the settlement check into herbank account and kept $4,000 aftergiving $12,000 to Azme. Cappuccioalso recruited three other persons toparticipate in the conspiracy. Thosethree received settlement checks to-taling $23,500 and have also pledguilty to theft by deception for theirroles in the conspiracy.

State v.Le T. Harlin

On May 2, 2003, Le T. Harlin, aclaims specialist in the Mount Laureloffice of Ohio Casualty InsuranceCompany, was sentenced to fouryears in State prison and ordered topay restitution to Ohio Casualty inthe amount of $101,869. Harlin hadpled guilty and admitted that, be-tween July 17, 2000 and March 27,2002, he stole numerous checksfrom third parties which were pay-able to Ohio Casualty, forged en-dorsements on the checks using anOhio Casualty rubber stamp, and de-posited the checks into his Com-merce Bank account.

State v.Linda Clements-Wright,Neville L. Holder, Lisa Givens,George Givens, Bruce Alston,Neville Louis Holder,Marsha Alston Walkerand Michael McCormick

On May 22, 2003, LindaClements-Wright, an Allstate Insur-ance Company Insurance ClaimsProcess Specialist working out ofAllstate Market Claims offices inMount Laurel and Moorestown, wascharged by a State Grand Jury withconspiracy, theft by unlawful taking,and money laundering. According tothe indictment, between April of 1995and September of 1998, Clements-Wright, in her capacity as a ClaimsProcessing Specialist for Allstate In-surance Company, issued approxi-mately 150 Allstate insurance claimchecks totaling approximately$594,369 to 11 persons she was ac-quainted with, but who were not en-titled to the insurance claim money.It is alleged that Clements-Wrightconspired with her acquaintances tocash the checks, keep 10% of the

proceeds, and return the balance ofthe proceeds to her. Clements-Wright’s case is pending trial.

As part of the investigation ofLinda Clements-Wright, on March26, 2003, Neville, L. Holder, LisaGivens, Lisa’s husband George Giv-ens, and Bruce Alston pled guilty toseparate Accusations charging themwith conspiracy. On March 28, 2003,Neville L. Holder’s son, Neville LouisHolder, and Michael McCormick alsopled guilty to separate Accusationswhich also charged conspiracy. Eachdefendant admitted that betweenJuly of 1995 and June of 1998, theyaccepted auto insurance relatedclaim checks in various amountsfrom Clements-Wright, knowing thatthey were not entitled to the money.On May 19, 2003, Neville L. Holderand Neville Louis Holder were admit-ted into the PTI Program. Neville L.Holder was ordered to pay restitutionin the amount of $1,646, and NevilleLouis Holder in the amount of$6,354. On September 12, 2003,McCormick was sentenced to twoyears probation and ordered to pay$11,342 in restitution. On October24, 2003, Alston was sentenced tothree years probation conditionedupon the payment of $8,825 in resti-tution. On October 31, 2003, LisaGivens was sentenced to three yearsprobation conditioned on paying$11,298 in restitution and also pay-ing a $15,000 civil insurance fraudfine. On October 31, 2003, GeorgeGivens was also sentenced to threeyears probation conditioned uponpaying restitution in the amount of$14,674 and a $15,000 civil insur-ance fraud fine.

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State v.Tara Mack

On May 13, 2003, Tara Mack, afinancial support technician for Pru-dential Insurance, pled guilty to anAccusation charging her with theft.Mack admitted that, between Febru-ary of 2001 and April of 2001, duringthe course of her employment as afinancial support technician for Pru-dential Insurance Company, shestole seven checks from Prudentialtotaling approximately $14,135, and

after keeping $800 for herself, sheturned over the balance of the pro-ceeds to Williams. She was admittedinto the PTI Program subject to mak-ing restitution, maintaining gainfulemployment, and cooperating inOIFP’s prosecution of Williams.

Public InsuranceAdjuster Fraud

State v.Marc Rossi, Otis Boone,Michael Winbergand Marc Graziano

On November 10, 2003, MarcRossi, the alleged leader of an “ar-son for hire” ring, pled guilty tocharges of arson, conspiracy to com-mit arson, bribery, theft, and theft bydeception. In pleading guilty to thecharges, Rossi admitted that he con-spired with other co-conspirators todamage or set fire to various proper-ties so that he could solicit the victimsas clients for his public adjusting busi-ness, Rossi Adjustment Services. Inparticular, Rossi admitted his role insix arsons involving two commercialproperties and four residential proper-ties. Rossi is pending sentencing.

Rossi’s other co-conspiratorshave previously pled guilty. On De-cember 12, 2003, Otis Boone, anemployee of Rossi Adjustment Ser-vices, was sentenced to four years inState prison for participating in thesetting of the arson fires as part ofthe Rossi conspiracy. On October31, 2003, Michael Winberg, also alicensed public adjuster, was sen-tenced for aggravated arson to five

diverted them to a business accountcontrolled by another person. OnJuly 1, 2003, Mack was sentenced to18 months probation conditionedupon completing 75 hours ofcommunity service.

State v.Jemal Williams

On November 21, 2003, JemalWilliams was sentenced to threeyears probation and payment of$3,982 in restitution for fraudulentlyissuing insurance claims checkswhile working as a claims represen-tative for Great West Life and Annu-ity Insurance Company. Williams ad-mitted at his prior guilty plea hearingthat he had issued six fraudulentchecks totaling $7,415 to LetticiaWaymer. Waymer pled guilty to theconspiracy in 2002, explaining that,

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years in State prison, payment of$102,000 in restitution and a $5,000civil insurance fraud fine. On March21, 2003, Marc Graziano, formerowner of Graziano Florist, was sen-tenced for theft by deception andconspiracy to five years probationand payment of $26,468 in restitu-tion and a $2,500 civil insurancefraud fine.

State v.William Kiernan, Jr.

Related to the Rossi investiga-tion and the Jeffrey Nemes investi-gation (set forth elsewhere in thisReport), on December 17, 2003,William Kiernan, Jr., Chief ofHamilton Township Enterprise FireCompany, pled guilty to an Accusa-tion charging obstructing the adminis-tration of law. Kiernan admitted pro-viding false statements to law en-forcement authorities during thecourse of an investigation into alle-gations that Rossi and Nemes werepaying bribes and soliciting firechiefs to allow fires to burn longerand do more damage so that theamount of insurance claims wouldbe higher, thus allowing bothNemes and Rossi to reap greater fi-nancial benefits. Nemes would ben-efit because his home repair con-tracting business, Nemes Enter-prises, would potentially receivelarger contracts, and Rossi’s publicadjusting insurance business wouldbe awarded larger fees based onhigher insurance claims. Kiernan’ssentencing is scheduled forearly 2004.

State v.Oscar Medina

On March 6, 2003, OIFP investi-gators arrested Oscar Medina, an in-surance claims adjuster employed atLiberty Mutual Insurance Company,and charged him with theft by decep-tion. Medina allegedly contacted in-surance claimants involved in auto-mobile accidents and advised themthat they would be able to obtain alarger claim settlement by payinghim a fee rather than hiring an attor-ney. The arrest warrant alleged thatMedina stole $5,500 by falsely creat-ing the impression that, as a LibertyMutual Group Claims Adjuster, hewas entitled to 15% of the claimants’bodily injury insurance settlementmoney. This case is pending grandjury presentation.

State v.William R. Taintor, III

William R. Taintor, III, a licensedpublic insurance adjuster, wascharged in two separate State GrandJury indictments. The first indictmentcharged Taintor with theft by failureto make required disposition of prop-erty and alleged that, in Septemberof 2001, Taintor received an insur-ance claim settlement check in theamount of $3,743 on behalf of an in-sured and kept the proceeds for him-self. The second indictment chargedTaintor with attempted theft by de-ception and forgery. According tothat indictment, Taintor submitted aforged invoice to Omaha Propertyand Casualty Insurance Companybearing the purported signature ofanother insured that Taintor repre-sented in order to inflate a propertydamage claim. The allegedly phonyinvoice, dated October 10, 1995,purported that T&K Kitchens hadpreviously repaired damage to theproperty located in Avalon. However,

allegedly, the previous damage hadnot been repaired by T&K Kitchensand the invoice did not accurately re-flect the repairs done. It was furtheralleged that Taintor submitted theforged invoice to obtain a largercommission in his capacity as thepublic insurance adjuster represent-ing the insured in settling the insur-ance claim. On June 5, 2003, Taintorwas admitted into the PTI Programconditioned upon completing 100hours of community service and pay-ing restitution to his client, CurtisBoykins, in the amount of $3,743.

Insurance Premium Fraud

State v.Philip A. McKeaney

On November 17, 2003, PhilipMcKeaney pled guilty to theft by fail-ure to make required disposition ofproperty received and to a relatedbut separate charge of misapplicationof entrusted property. A State GrandJury had previously chargedMcKeaney, the operator of HaddonNational Companies, Inc., (HNC),with financial facilitation of criminalactivity (money laundering), theft byfailure to make required dispositionof property received, and theft by de-ception. HNC was a corporation thatserved as a third party health insur-ance administrator. Third partyhealth insurance administrators re-ceive money to pay claims from em-ployers, corporations, and some-times government entities which self-fund and self-insure the health insur-ance plans that provide health ben-efits to their employees. HNC, as athird party administrator, was undercontract to receive money from itsself-insured clients for health insur-ance benefits, deposit that money,and pay the health insurance claimsof its clients as they were submitted.

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HNC would earn a fee for health insur-ance claims paid. In some cases,HNC also received money from itsclients to purchase special re-insur-ance policies to provide health insur-ance coverage.

According to the indictment,McKeaney stole in excess of $1 mil-lion from nine clients, which shouldhave been used to pay health insur-ance claims or purchase re-insur-ance policies. Some of the stolenmoney was used to pay McKeaney’spersonal debts and expenses, andsome of it was transferred to anotherbusiness, Cambria Corporation, inwhich McKeaney had an interest.The indictment also specifically al-leged that McKeaney committed thecrime of money laundering by trans-ferring approximately $494,188 fromhis company, HNC, which moneyshould have been used to pay healthcare claims or procure health insur-ance policies for clients, to CambriaCorporation, a business in whichMcKeaney had an interest.McKeaney is scheduled to besentenced in 2004.

State v.Nunzio Tartaglio

On August 27, 2003, NunzioTartaglio pled guilty to an Accusationcharging him with theft by failure tomake required disposition of prop-erty received and was admitted intothe PTI Program conditioned uponpaying $9,000 in restitution.Tartaglia, a former insurance agentfor the Nettis Insurance Agency, ad-mitted that he collected life insurancepremium payments from insurancepurchasers and failed to remit thepremium payments to the insurancecarriers. He also admitted that auto-matic policy loans were initiated onthe policies without the owners’knowledge or consent so he couldsteal the loan proceeds.

Contractor’s Fraud

State v.Jeffrey Nemes

On February 19, 2003, followinga five week jury trial in MercerCounty Superior Court, JeffreyNemes was found guilty of theft byfailure to make required dispositionof property. While employed as aHamilton Township police officer,Nemes, owner of Nemes Enter-prises, Inc., a home repair contract-ing business, took insurance claimsmoney totaling approximately$122,000 from both commercial andresidential property owners purport-edly to make repairs on their proper-ties through his home repair con-tracting business but failed to com-plete the repairs to the properties orreturn the money. On May 30, 2003,Nemes was sentenced to sevenyears in State prison and ordered topay a total of $130,833 in restitution.Nemes’ conviction is presentlyon appeal.

More recently, on December 18,2003, a State Grand Jury returnedanother indictment against Nemescharging him with bribery in officialand political matters. This indictmentcharged Nemes with offering twobribes to local fire chiefs allegedly toenhance property damage in thecourse of extinguishing fires. Thefirst bribe allegedly occurred on April22, 1998, when Nemes is alleged to

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have offered cash to the Fire Chief ofthe Rusling Hose Fire Company. Thesecond bribe is alleged to have oc-curred following a conspiracy in whichNemes and Marc Rossi, the formerowner of Rossi Adjustment Services,a public insurance claims adjustingbusiness, agreed to offer a bribe toFire Chief William Kiernan, Jr., of theEnterprise Fire Company located inHamilton Township, New Jersey. TheState intends to prove at trial thatcash bribes were offered to the Chiefsso that they would allow additionaldamage to be done to buildings bypermitting fires to burn longer whilesupposedly working to extinguishthose fires. Nemes is pending trialwith respect to the charges under thislatter indictment.

InsuranceInspection Fraud

State v.Waleed Itani

Waleed Itani pled guilty to an Ac-cusation charging him with commer-cial bribery. In February 2000, Itaniwas employed at George’s Shell, aservice station in Hackensack, whichwas also an authorized CARCO in-surance inspection facility. CARCOis an independent vendor for the au-tomobile insurance industry whichcontracts with service stations to in-spect used automobiles to assesstheir condition for the purpose of cal-culating insurance coverage and pre-miums. Itani admitted that as anagent of CARCO, he accepted $200to falsify a CARCO inspection reportto indicate that a 1995 Toyota Co-rolla contained a stereo AM/FM ra-dio with tape deck, compact discplayer, and alarm system. On Feb-ruary 28, 2003, Itani was admittedinto the PTI Program conditioned

upon paying $200 in restitution tothe State of New Jersey.

Property RelatedInsurance FraudFalse HomeownersInsurance Claims

State v.Tracy D. Childress

Tracy D. Childress, a Newarkpolice officer, was charged by anEssex County Grand Jury in 2002with attempted theft by deceptionrelating to a false insurance claimfor a laptop computer allegedly sto-len from his home. According to theindictment, Childress submitted afalse receipt to his insurance com-pany, purporting to substantiate thepurchase of a computer costing inexcess of $7,282. Childress alleg-edly submitted the receipt to CignaInsurance Company as support fora homeowner’s insurance claim inwhich he claimed that a burglary oc-curred at his residence and thatsome of his personal property wasstolen, including the computer. OnMarch 3, 2003, Childress was ad-mitted into the PTI Program condi-tioned upon completing 50 hours ofcommunity service.

State v.Robert Stevens

On March 14, 2003, RobertStevens was sentenced for forgeryto two years probation conditionedupon paying a $1,000 civil insurancefraud fine and a $350 criminal fine.Stevens admitted that he submitteda forged receipt from Eagle GolfWorks in the amount of $1,004 toAAA Mid-Atlantic Insurance Com-pany, in support of a homeowner’s

insurance claim following a burglary athis home on December 10, 2001.

State v.Steven Budge, John Budgeand Frank Land

On February 26, 2003, a StateGrand Jury returned an indictmentcharging Steven Budge, a PublicInsurance Claims Adjuster; his brother,John Budge; and their uncle, FrankLand, with attempted theft bydeception. According to theindictment, on or about December 12,2000, a house owned by Frank Landwas damaged as a result of winds thatcaused a large tree limb to fall on theroof. It is alleged in the indictment thatSteven Budge, John Budge, and FrankLand inflicted additional damage to theroof in order to inflate the homeowner’sinsurance claim to Liberty MutualInsurance Company. The Stateintends to prove that Steven Budgesubmitted an appraisal to repair theroof to Liberty Mutual which wasinflated by approximately $60,000.Liberty Mutual, suspecting fraud,denied the claim, and referred the caseto OIFP for further investigation. Thecases are pending trial.

State v.Lisa Mulrooney

On May 22, 2003, Lisa Mulrooneypled guilty to an Accusation chargingher with attempted theft by deception.Mulrooney admitted that on October 1,2001, she altered a $126 invoiceissued by Aqua Pure, Inc., a companywhich delivered water to Mulrooney’sresidence, to read $3,316. Shesubmitted the altered invoice to StateFarm in support of a property damageclaim after fuel oil leaked from anunderground tank on her property andcontaminated her water supply. OnAugust 22, 2003, Mulrooney wasadmitted into the PTI Program with the

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conditions that she perform 60 hours ofcommunity service and pay a $5,000civil insurance fraud fine.

State v.David Rozjabek

On December 4, 2003, aMiddlesex County Grand Jury returnedan indictment against David Rozjabek,charging him with attempted theft bydeception. According to theindictment, on May 24, 2002, anautomobile accident occurred nearRozjabek’s home which caused minordamage to his landscaping. Theindictment alleged that Rozjabeksubmitted a property damageinsurance claim to his homeowner’sinsurance carrier, Allstate InsuranceCompany, using a phony invoice in theamount of $1,250 in support of hisclaim. According to the indictment, theactual damage to Rozjabek’s propertywas estimated at $125. Rozabek’scase is pending in trial.

State v.Carmina Vicidomini

Carmina Vicidomini pled guilty toan Accusation charging her withattempted theft by deception and, onSeptember 12, 2003, was admitted intothe PTI Program conditioned uponpaying a $2,000 civil insurance fraudfine and performing 50 hours ofcommunity service. Vicidominiadmitted that, on July 17, 2002, shefiled a fraudulent property loss claimwith her homeowner’s insurance,Selective Insurance Company,claiming that jewelry valued at$4,980 had been lost. Theinvestigation revealed that, in July of2000, Vicidomini had filed aninsurance claim for the loss of thesame jewelry under her automobilepolicy but it was not covered.

FraudulentProperty Claims

State v.Solomon Bouzaglou,Joseph Benlolo and Effy Harari

On March 12, 2003, SolomonBouzaglou and Joseph Benlolo pledguilty to separate Accusations chargingeach of them with conspiracy andattempted theft by deception.Bouzaglou and Benlolo admitted that,between September of 1997 and Mayof 1998, they conspired with others,including a public insurance adjuster,to intentionally cause water damage tocostume jewelry stored in a warehouselocated in Irvington, which wasinsured by Fireman’s Fund InsuranceCompany for $1 million. Thedefendants admitted that theysubmitted an insurance claim toFireman’s Fund for approximately$973,638, knowing that the jewelryhad intentionally been damaged.Fireman’s Fund, suspecting the claimwas fraudulent, denied the claim andreferred the matter to OIFP for furtherinvestigation. Sentencing is scheduledfor early 2004.

As part of the OIFP investigationinto the Bouzaglou and Benlolo falseclaims, Effy Harari pled guilty to anAccusation charging him withconspiracy. Harari admitted that hegave Benlolo $12,000 to finance thescheme. Harari was, in turn, promiseda portion of the insurance proceeds.On October 10, 2003, Harari wasadmitted into the PTI Programconditioned upon performing 50 hoursof community service. He was alsoordered to pay a $5,000 civil insurancefraud fine.

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State v. Mitchell Markowitz,Sol Zaltz, Yehudah Berger,Sam Nisser and David Nisser

On June 20, 2003, as part of theBouzaglou and Benlolo investigation,Mitchell Markowitz, Sol Zaltz,Yehudah Berger, Sam Nisser, andDavid Nisser were charged in aState Grand Jury indictment withconspiracy and attempted theft bydeception. According to the indict-ment, between January of 1998 andJanuary of 1999, the defendantsconspired to purchase 20,000 piecesof inexpensive costume jewelry, pro-duce phony receipts, store the jew-elry in a warehouse, and purposelydamage the jewelry in order to col-lect on the insurance policy. TheIrvington warehouse was insured byFireman’s Fund Insurance Companyfor $1 million. According to the indict-ment, Markowitz, a licensed publicinsurance adjuster, submitted an in-flated insurance claim in the amountof $973,638 to Fireman’s Fund. Thecases as to these five defendantsare pending trial.

State v. R. K.On July 17, 2003, R.K., whose

full name must be withheld for inves-tigative reasons, was admitted intothe PTI Program after being chargedby way of an Accusation on April 30,2003, with theft by deception, at-tempted theft by deception, and forg-ery. The Accusation charged that,between March of 1993 and May of2001, R.K. submitted phony insur-ance claims for lost luggage andtheir contents under various travel/baggage insurance policies following

numerous international flights. Threetravel insurance companies, WorldAccess Service Corporation/AccessAmerica, Travel Insured Interna-tional, Inc., and Travel Guard Inter-national, paid R.K. a total of $15,636before suspecting that the claimswere fraudulent. R.K. also admittedthat she used the letterhead and sig-nature of an Alitalia Airlines em-ployee to create a letter which falselyindicated that Alitalia was unable tolocate R.K.’s missing luggage andwould forward a settlement check toR.K. for the maximum amount of theairline’s liability. As part of her par-ticipation in the PTI Program, R.K.was required to cooperate with theState in other investigations, pay a$5,000 civil insurance fraud fine, andpay $10,447 in restitution to WorldAccess Service Corp., $2,170 in res-titution to Travel Insured Interna-tional, as well as $3,019 in restitutionto Travel Guard International.

State v.Daniel Chace

On September 2, 2003, DanielChace was admitted into the PTIProgram conditioned on performing30 hours of community service afterpleading guilty to attempted theft.Chace, who was an operations engi-neer at the World Trade Center, ad-mitted that, in April of 2002, he sub-mitted a fraudulent property lossclaim to Ohio Casualty InsuranceGroup for the loss of what heclaimed were his personal handtools, power tools, and clothing dueto the terrorist attacks at the WorldTrade Center on September 11,2001. Chace claimed the value ofthe property loss at $5,824. Thetools and uniforms, however, werenot Chace’s personal property butwere, in fact, supplied by his em-ployer. Consequently, he was not,entitled to file the claim.

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State v.Eric Rosenblatt

On October 1, 2003, EricRosenblatt was sentenced to fiveyears probation conditioned onpaying a $5,000 civil insurance fraudfine and performing 30 days ofcommunity service after pleadingguilty to theft by deception. In May of2001, Rosenblatt had submitted aclaim to Jewelers Mutual Insurancealleging that he lost a one-caratdiamond ring valued at approximately$5,700. An investigation by JewelersMutual revealed that previously, inNovember of 2000, Rosenblatt hadreported the same diamond ring lostto State Farm Insurance Company,which had paid him $4,664.Rosenblatt failed to disclose the priorState Farm claim on the JewelersMutual application for insurance.Jewelers Mutual denied Rosenblatt’sMay 2001 claim and referred thematter to OIFP for investigation.

PhonyCertificates/Lettersof Insurance

State v. William Burgermaster

William Burgermaster pledguilty to an Accusation charging himwith forgery. He admitted that, as anemployee of Shading Systems, Inc.,during a routine insurance audit ofworkers’ compensation insurancecoverage, he provided the auditorswith a forged Certificate of Liability.The certificate was purportedly is-sued by the Waldorf InsuranceAgency and purported to reflectproof of workers’ compensation in-surance, when, in fact, ShadingSystems, Inc.’s Certificate of Liabil-ity Insurance had been canceleddue to non-payment. Under State


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law, workers’ compensation insur-ance is mandatory. On May 14,2003, Burgermaster was admittedinto the PTI Program conditionedupon completing 50 hours ofcommunity service.

State v.Mark DiTaranto

On September 26, 2003, MarkDiTaranto was sentenced to threeyears probation and ordered to per-form 50 hours of community serviceafter pleading guilty to forgery by ut-tering. DiTaranto had presented aforged Certificate of Liability Insur-ance, purportedly issued by the Gen-eral Agents Insurance Company, toa homeowner in order to performconstruction work at thehomeowner’s residence.State v.Douglas Pelikan

Douglas Pelikan pled guilty to anAccusation which charged him withforgery. He admitted that, in June of2002, he presented a fraudulent Cer-tificate of Liability Insurance, purport-edly issued by Nottingham Insuranceand Financial Service, to a clientwho had hired Pelikan for a con-struction project. Contractors are of-ten required to present Certificates ofInsurance substantiating liability andworkers’ compensation insurance,among others, before beginning con-struction work. Pelikan admitted thathe altered the Certificate of Liabilityto reflect current coverage becausehis liability insurance policy withNottingham had previously beencanceled. On October 31, 2003,Pelikan was admitted into thePTI Program.

State v.William Mulholland

William Mulholland, the operatorof a small independent trucking com-pany known as Bilco Transport, pledguilty to an Accusation whichcharged him with forgery. Mulhollandadmitted that, on March 4, 2002, inorder to enter into a business agree-ment with Furniture King Stores, heproduced a forged letter purportedlyfrom State Farm Insurance Com-pany, stating that Bilco Transportmaintained a general liability insur-ance policy with State Farm, thatFurniture King Stores was added tothe policy as an additional insured,and that Furniture King Stores wascovered for losses of up to $500,000.Mulholland’s company, Bilco Trans-port, did not, in fact, maintain a gen-eral liability insurance policy withState Farm. On May 5, 2003,Mulholland was admitted into the PTIProgram conditioned upon complet-ing 75 hours of community service.

State v.Anthony Spano

On June 13, 2003, AnthonySpano was sentenced to two yearsprobation conditioned upon paying$307 in restitution and $5,000 incivil insurance fraud fines afterpleading guilty to committing theftby deception. Spano admitted that,between July 13, 1999 and March 1,2000, while working as a massagetherapist at the Circle of HealthClinic, Inc., in Hillsdale, he fraudu-lently submitted insurance claims toChubb Insurance for approximately29 massage therapy sessions inexcess of $5,000.

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Criminal Cases Investigated in 2003by Fraud or Provider Type

Medicaid161

Property& Casualty

158Auto Fraud

393

Health & Life306

- Health Care Claims Fraud 131- Disability Insurance/- Workers Compensation 62- Other 59- False Claims 15- Misappropriation/Embezzlement 13- Application Fraud 10- Life Insurance 9- Premium Fraud 7

- Medical Support Other 27- Pharmacy 24- Transportation 21- Facility Other 20- Practitioners 18- Program Other 15- Clinic 9- Facility/Institution 8- Patient Abuse 7- Laboratory 6- Home Health 6

- Miscellaneous 55- False Documents 32- Agent Fraud 25- Property 13- False Claims 12- Premium Theft 11- Homeowners Insurance 10

- Staged Thefts/Give Up Schemes 118- Fraudulent Insurance Cards 76- Other 54- Health Care/PIP/BI 38- False Claims 34- Staged Accidents 30- Fraudulent Drivers Licenses 26- False Documents 17

OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –OIFP Criminal Case Descriptions –Medicaid FraudMedicaid FraudMedicaid FraudMedicaid FraudMedicaid Fraud

State v.Azam Khan, et al.

Azam Khan, owner of S BrothersPharmacy, pled guilty on August 9,2002, to health care claims fraud, ad-mitting that his pharmacy defraudedthe Medicaid Program of more than$290,000 for medications that werenever dispensed or dispensed to per-sons using another person’s Medicaidrecipient number. In some instances,phony bills were submitted to Medicaidfor medications prescribed for Medic-aid recipients who had died years ear-lier. Khan is scheduled to be sentencedin early 2004. Milton Barasch, thePharmacist-in-charge of S BrothersPharmacy, also pled guilty to healthcare claims fraud on May 19, 2003 andis scheduled to be sentenced in early2004. Co-defendant Dr. Axat Jani, alsocharged in the S Brothers Pharmacyscheme, pled guilty on January 7, 2003to health care claims fraud. Jani admit-ted that he had written phony prescrip-tions in the names of Medicaid recipi-ents who had visited his clinic locatedin Newark. He further admitted that hehad provided the prescriptions, alongwith the Medicaid beneficiary num-bers, to co-defendants ShahidKhawaja and Milton Barasch for a fee.Jani is scheduled to be sentenced inearly 2004. The case against ShahidKhawaja is pending trial. These mat-ters will be referred to the Profes-sional Licensing Boards for Medicineand Pharmacy for appropriate actionwith respect to the professional li-censes held by the defendants.

State v.Seymour H. Blau

Seymour H. Blau, a former li-censed podiatrist, pled guilty on Octo-ber 15, 2002, to Medicaid fraud andwas sentenced on July 15, 2003 to oneyear probation conditioned upon pay-ing $5,819 in restitution to the MedicaidProgram. Between September 1998and April 2001, Blau wrote and submit-ted approximately 150 prescriptions forboth legend drugs and controlled dan-gerous substances (CDS) in thenames of four former patients of hiswho were enrolled in the Medicaid Pro-gram. The former patients never re-ceived the drugs. Blau personally ob-tained the drugs from the pharmacies.The fraudulently prescribed drugs, to-taling over $6,000, were billed to theMedicaid Program.

State v.Bennie M. Martinand Recovery Services, Inc.

Bennie M. Martin, a licensed prof-essional substance abuse counselorand Recovery Services, Inc., a Medic-aid provider authorized to provide drugand alcohol counseling services, wereindicted on January 13, 2003 by aState Grand Jury. The indictmentcharged Martin with health care claimsfraud, Medicaid fraud and corporatemisconduct. According to the indict-ment, between February 2001 andSeptember 2002, Martin fraudulentlyobtained the names and Medicaid re-cipient numbers of Medicaid recipientswho were not counseled at RecoveryServices, Inc. Using the recipients’names and numbers, Martin allegedlybilled the Medicaid Program falsely

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claiming that he had provided the coun-seling services to those Medicaid re-cipients. Allegedly, Martin and Recov-ery Services, Inc. fraudulently sub-mitted claims to Medicaid totalingover $504,000 for counseling ses-sions that never took place. The caseis pending trial.

State v.Cristino Moralesand Maria Carmen Cruz

A State Grand Jury returned an in-dictment charging Cristino Morales andMaria Carmen Cruz with health careclaims fraud and Medicaid Fraud. Ac-cording to the indictment, between May1999 and October 1999, Morales andCruz, the owner/operators of the NewHopes of New Jersey Clinic inCamden, billed Medicaid more than$13,000 for mental health counselingand psychological services which werenot rendered or not rendered as billed.Cruz pled guilty to Medicaid fraud andon December 5, 2003, was sentencedto three years probation conditionedupon performing 150 hours of commu-nity service. She was also debarredfrom participating in the Medicaid Pro-gram for a period of five years. Moralespled guilty to health care claims fraudand is scheduled to be sentenced inearly 2004.

State v.Patrick Traynor

As part of the OIFP MedicaidFraud Section’s investigation into theNew Hopes of New Jersey Clinic,Patrick Traynor, Program Director ofNew Hopes of New Jersey, pled guiltyto an Accusation charging him withMedicaid fraud. Traynor admitted thatbetween March 1999 and June 1999,at the direction of the owners of NewHopes, he prepared patient progressnotes for counseling sessions whichnever occurred. As a result, New

Hopes submitted fraudulent bills to theMedicaid Program for non-existentcounseling sessions. On December 5,2003, Traynor was sentenced to threeyears probation conditioned upon per-forming 150 hours of community ser-vice. He was also debarred from par-ticipating in the Medicaid Program for aperiod of five years.

State v.Akbar Oliver, et al.

A State Grand Jury returned in-dictments charging Ifeanyi Akemelu,Kattia Bermudez, Rayonne Clark, Vic-tor Cordero, Lenora Grant, Iris Sabreeand Akbar Oliver variously with mul-tiple counts of Medicaid fraud. The in-dictments alleged that the seven de-fendants, who were employees ofMaximus, Inc., a company contractedby the State to assist with the task ofenrolling eligible persons into the NewJersey Family Care Program, fraudu-lently obtained benefits from the NewJersey Family Care Program. The Pro-gram provides health insurance ben-efits to the “working poor,” people whowork and earn too much money forMedicaid coverage, but not enoughmoney for privately purchased healthinsurance. According to the indict-ments, the defendants obtained ben-efits by providing false informationabout income or dependents on theirapplications for the Program. The in-dictments also alleged that Akemeluand Oliver assisted others in preparingfalse applications for the Program.Rayonne Clark pled guilty to Medicaidfraud and on February 21, 2003, Clarkwas sentenced to two years probationconditioned upon completing 100hours community service and paying a$250 fine. The cases against the sixremaining defendants resulted in Pre-Trial Intervention (PTI) or other proba-tionary dispositions.

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State v.Paul Steffens

Paul Steffens pled guilty to Medic-aid fraud and, on February 21, 2003, hewas sentenced to three years probation.Steffens was also barred from partici-pating as a provider in the MedicaidProgram. Steffens and the corporateentity known as Hudson BehavioralTreatment Center had been charged bya State Grand Jury with theft by decep-tion, misconduct by a corporate officialand Medicaid fraud. The indictment al-leged that as the Executive Director ofHudson Behavioral Treatment Center,an outpatient drug and alcohol treat-ment center managed by Facilities Man-agement Associates Inc. (FMA),Steffens submitted claims to the Medic-aid Program for group therapy servicesthat were not provided.

State v.Howard Williams, III

On December 23, 2002, HowardWilliams, III pled guilty to an Accusationcharging him with health care claimsfraud. Williams admitted that betweenMarch 2000 and February 2002, he ob-tained and filled phony prescriptions fornon-narcotic drugs, including Diflucan,Viracept and Epivir, fraudulently usingthe names of Medicaid recipients. Theinvestigation revealed that the MedicaidProgram was billed approximately$75,388 for the phony prescriptions filledby Williams. When Williams was ar-rested by officers of the West New YorkPolice Department, he was found to havein his possession a small amount ofheroin, as well as Diflucan, Viracept, andEpivir. On October 24, 2003, Williamswas sentenced to four years State prisonand ordered to pay restitution to the Med-icaid Program in the amount of $75,388.

State v.Nino Paradiso,Singac Pharmacy, et al.

On June 13, 2003, a State GrandJury returned an indictment chargingNino Paradiso, a licensed pharmacist,and corporate defendant, Singac Phar-macy, which Paradiso owned and op-erated, with health care claims fraudand Medicaid fraud. Paradiso was alsocharged with misconduct by a corpo-rate official. According to the indict-ment, between February 2001 and Au-gust 2001, Paradiso, through SingacPharmacy, and Kenneth Horwitz, an-other licensed pharmacist, submittedapproximately103 fictitious prescriptiondrug claims to the Medicaid Programfor eight Medicaid recipients. Horwitzwas employed as a licensed pharma-cist at the Medical Treatment Centerlocated at 935 Allwood Road in Clifton.The indictment further alleged that thefictitious claims were submitted basedupon prescriptions that Horwitz admit-ted he forged. The eight Medicaid re-cipients were unaware of the fictitiousprescriptions and fraudulent claims. Al-though no medicines were dispensed,Medicaid was billed approximately$35,012. Paradiso and Singac Phar-macy are pending trial.

State v.Kenneth Horwitz

On April 10, 2003, KennethHorwitz pled guilty to an Accusationwhich charged him with Medicaidfraud. Horwitz admitted that betweenFebruary 2001 and August 2001, heand a co-conspirator, Nino Paradiso,submitted approximately 103 fictitiousprescription drug claims to the Medic-aid Program for eight Medicaid recipi-ents. The fictitious claims were submit-ted based upon prescriptions thatHorwitz admitted he forged. The eightMedicaid recipients were unaware ofthe fictitious prescriptions and fraudu-lent claims. Although no medicines

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were dispensed to them, Medicaid wasbilled approximately $35,012. Horwitz isawaiting sentencing.

State v.Manuprasad Parikh

On November 12, 2003,Manuprasad Parikh, the owner of Irv-ing Pharmacy, pled guilty to an Accu-sation charging him with Medicaidfraud. Parikh, through Irving Pharmacy,fraudulently billed the Medicaid Pro-gram for expensive prescriptions,namely, Serostim, used in HIV treat-ment. The prescription drugs, valued atapproximately $180,000, were neverdispensed to Medicaid recipients. Thematter was referred to the Board ofPharmacy for appropriate action withrespect to Parikh’s license. Parikh isscheduled for sentencing in early 2004.

State v.Eliezer Martinez, et al.

A State Grand Jury returned an in-dictment charging Eliezer Martinez,Olga Marquez, OlgaBonett, Juanita Melendez, JoseJimenez, Bartolo Moreno and LuzSenquiz with health care claims fraudand Medicaid fraud. Martinez ownedand operated Hispanic Counseling andFamily Services of New Jersey, Inc., adrug and alcohol counseling center.According to the indictment, Martinez,Marquez, Bonett, Melendez,Jimenez, Moreno and Senquiz, allcounselors at the center, submittedfraudulent health care claims to theMedicaid Program seeking reimburse-ment for medical services provided toMedicaid recipients, when, in fact, thehealth care services had not been pro-vided. Jimenez, Bonett, Senquiz andMelendez pled guilty to health careclaims fraud and are awaiting sentenc-ing. On July 25, 2003, Marquez was ac-cepted into the Camden County Pre-Trial Intervention (PTI) Program condi-tioned upon completion of 50 hours of

community service and cooperationwith the State in the continuing investi-gation of this matter.

State v.Harvey Lee Bellamyand Bernice Bellamy

A State Grand Jury returned an in-dictment charging Harvey Lee Bellamyand Bernice Bellamy with health careclaims fraud and Medicaid fraud.Harvey Lee Bellamy was the corporatepresident of H&B Medical Transporta-tion Services, Inc., (H&B), a mobility as-sistance patient transportation servicewhich provides transportation to Medic-aid patients to and from their medicaltreatment appointments. BerniceBellamy, his wife, was in charge of thebilling for H&B. According to the indict-ment, Harvey and Bernice Bellamy,through H&B, a licensed Medicaid pro-vider, fraudulently billed the MedicaidProgram for the use of extra crewmembers who purportedly provided as-sistance to Medicaid recipients duringthe vehicle transports. At trial, the Stateintends to prove that the extra crewmembers were not provided during thetransports and the Bellamys fraudu-lently billed Medicaid for transportationservices rendered to approximately 14Medicaid patients in the approximateamount of $22,860. On February 3,2003, a bench warrant for HarveyBellamy was issued as a result of hisnon-appearance at a scheduled statusconference.

State v.Michael Stavitski, et al.

On November, 10, 2003, MichaelStavitski, Wall Pharmacy, Avon Phar-macy and Belmar Pharmacy pled guiltyto health care claims fraud. Stavitski’ssentencing is scheduled in early 2004.A State Grand Jury indictment hadcharged Stavitski, a licensed pharma-cist and the operator of four pharmacycorporations located in Monmouth

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County, with health care claims fraud,corporate misconduct and Medicaidfraud. Three of the four pharmacy cor-porations were also charged withhealth care claims fraud and Medicaidfraud. The pharmacies charged wereJr. Mick, Inc. d/b/a Belmar HometownPharmacy, 911 Main Street, Belmar,New Jersey; Stavco, Inc., d/b/a AvonPharmacy, 300 Main Street, Avon,New Jersey; and Winky, Inc., d/b/aWall Pharmacy, 2510 Belmar Blvd.,Wall, New Jersey. These pharmaciesoperated as retail walk-in pharmaciesand also filled prescriptions for resi-dents of approximately 30 nursinghome and assisted living facilities, aswell as provided services to Medicaidand private insurance recipients. Ac-cording to the indictment, betweenMay 1996 and February 2002,Stavitski and the three pharmaciessubmitted numerous claims for pay-ment which reflected that medicationsor refills of medications were providedto Medicaid and privately insured pa-tients when, in fact, such medicationswere never provided. Additionally, inmany instances, Stavitski allegedlybilled for providing medications thatwere never prescribed by physicians.

State v.John and Kathleen Bukowiec

John and Kathleen Bukowiecwere indicted by a State Grand Juryfor Medicaid fraud and filing a fraudu-lent New Jersey income tax form. Theindictment alleged that between Feb-ruary 2000 and May 2002, John andKathleen Bukowiec, husband andwife, falsely under-reported their in-come on applications for Medicaidbenefits and misrepresented theirearnings on State income tax returns.Additionally, John Bukowiec allegedlyapplied for and received unemploy-ment benefits while employed.

According to the indictment, JohnBukowiec was employed by Michael

Stavitski, a pharmacist separately in-dicted by the State Grand Jury alongwith Belmar Hometown Pharmacy,Avon Pharmacy and Wall Pharmacy.It was alleged that Bukowiec was be-ing paid “off the books” by Stavitskiand that income was not reported byBukowiec to the New Jersey Medicaidprogram or on his taxes. On June 30,2003, the Bukowiecs were admittedinto the PTI Program conditionedupon John paying $7,181 restitution,Kathleen paying $5,195 restitution,and both performing 75 hours ofcommunity service.

State v.Stephen Poggioli

As part of the OIFP’s investigationinto the Stavitski matter, StephenPoggioli pled guilty to an Accusationcharging him with Medicaid fraud.Poggioli admitted that between May1999 and February 2002, he providedkickbacks in the form of cash andover-the-counter medicine to approxi-mately 15 nursing home and assistedliving facilities. These kickbacks wereprovided in exchange for the facilities’agreement to exclusively use pharma-cies owned by Michael Stavitski toprovide medications for the facilities’Medicaid patients. On October 24,2003, Poggioli was sentenced tothree years probation.

State v.Rx2000 Pharmacy

On May 7, 2003, Rx2000 Phar-macy, a Medicaid provider, pled guiltyto an Accusation charging Medicaidfraud. Rx 2000 Pharmacy admitted thatbetween January 1999 and July 1999,it submitted bills totaling approximately$18,506 to the Medicaid Program forprescription drugs which the pharmacynever provided to Medicaid recipients.The pharmacy was ordered to pay$22,289 in restitution to the MedicaidProgram and to pay a $1,000 fine.

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State v.I&I Invalid Coach,Imad Elbashir,and Imadelin A. Khair

On May 22, 2003, Imad Elbashir,Imadelin Khair and a corporate defen-dant, I&I Invalid Coach, pled guilty tohealth care claims fraud. The defen-dants had been charged with con-spiracy, health care claims fraud, theftby deception, Medicaid fraud and cor-porate misconduct. I&I, an invalidcoach provider owned by defendants,Imad Elbashir and Imadelin Khair, pro-vided non-emergency medical trans-portation to Medicaid recipients. I&I in-flated mileage, submitted false claimsto the Medicaid Program and received$90,000 more than it was entitled to forservices rendered. In addition, the de-fendants paid cash kickbacks to sev-eral Medicaid recipients in exchangefor their continued patronage. On Sep-tember 12, 2003, Khair was sentencedto three years State prison. Khair andthe corporation were ordered to pay$103,235 restitution and the corpora-tion was dissolved and ordered to re-frain from doing business in the Stateof New Jersey. Elbashir is scheduledfor sentencing in early 2004.

State v.Matthew Faenza

On June 4, 2003, Matthew Faenzapled guilty to an Accusation whichcharged him with health care claimsfraud. Faenza, a licensed pharmacistwho owned and operated McDermottPharmacy located at 433 Union Av-enue, Paterson, admitted billing theMedicaid Program for dispensing drugsto Medicaid patients when, in fact, nodrugs were dispensed. The drug mostcommonly involved in the phony Med-icaid transactions was Serostim, an ex-pensive drug used to treat persons in-fected with HIV. On October 17, 2003,Faenza was sentenced to three years

State prison. He was also ordered topay $450,000 restitution to the Medic-aid Program, and a $15,000 criminalfine. The Judge also ordered Faenza’spharmacy license suspended for oneyear and barred him from participatingin the Medicaid Program for a period offive years.

State v.Michael Pacheco

As part of the investigation intothe McDermott Pharmacy matter, onJuly 18, 2003, Michael Pacheco pledguilty to an Accusation charging himwith Medicaid fraud. Pacheco admit-ted that between January 1998 andJuly 1999, as an employee ofMcDermott Pharmacy, he assistedMatthew Faenza, a licensed pharma-cist who owned and operated thepharmacy, with billing the MedicaidProgram for dispensing drugs to Med-icaid patients when, in fact, no drugswere dispensed. The drug most com-monly involved in the phony Medicaidtransactions was Serostim, an expen-sive drug used to treat persons in-fected with HIV. Pacheco also admit-ted that, at Faenza’s direction, he paid“runners” for prescriptions whenFaenza was not at the pharmacy.Faenza then billed Medicaid for thoseprescriptions. On September 19,2003, Pacheco was sentenced tothree years probation. He has alsobeen suspended from participating inthe Medicaid Program for five years.

State v.Kwadwo Oei Agyemangand Victory Pharmacy, Inc.

A State Grand Jury returned an in-dictment charging Kwadwo OeiAgyemang, a pharmacist licensed inNew Jersey, with health care claimsfraud, Medicaid fraud and corporatemisconduct. Victory Pharmacy, a cor-poration owned and operated by

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Agyemang, was also charged in the in-dictment with health care claims fraudand Medicaid fraud. The indictment al-leged that between November 2001and June 2002, Agyemang, throughVictory Pharmacy, Inc., submitted inexcess of $27,000 in fraudulent bills tothe Medicaid Program for legend drugswhich were never dispensed. The falseclaims were allegedly submitted on be-half of investigators from OIFP whowere working undercover and whowere posing as Medicaid recipients.Agyemang pled guilty to health careclaims fraud and on September 19,2003, he was sentenced to two yearsprobation conditioned upon paying$54,000 in restitution and penalties.

State v.Angela Fusco

Angela Fusco pled guilty to an Ac-cusation charging her with one count ofMedicaid fraud. Fusco admitted thatbetween February 2002 and November2002, she used her Medicaid ManagedCare Organization cards to pay forcontrolled dangerous substances(CDS) for which she did not have validprescriptions. On September 15, 2003,Fusco was sentenced to three yearsprobation conditioned upon paying res-titution in the amount of $502.

State v.Surbhi Tarkasand Progressive Health Careof Hudson County, Inc.

On September 19, 2003, a StateGrand Jury returned an indictmentcharging Surbhi Tarkas and Progres-sive Health Care of Hudson County,Inc., with theft by failure to make re-quired disposition. According to the in-dictment, between June 2000 andJanuary 2001, Tarkas, in her capacityas the owner/operator of MeadowviewNursing Center, which was owned byProgressive Health Care of HudsonCounty, Inc., diverted over $100,000

from the trust account of nursing homeresidents and used it to pay corporateexpenses. Meadowview Nursing Cen-ter was a Medicaid provider of longterm care services to Medicaid recipi-ents. Meadowview received paymentsfrom the Medicaid Program and SocialSecurity on behalf of the nursing homeresidents. The nursing home, in turn,was required by law to place $35 to$40 of these payments into a PersonalNeeds Account (PNA) each month foreach resident’s personal use. The in-dictment alleged that Tarkas divertedover $100,000 from the PNA accountsand used it to pay the expenses of thenursing home which was experiencingfinancial difficulties.

The case against Tarkas and Pro-gressive is pending trial.

State v.Jennifer Kim

Jennifer Kim, the owner/pharma-cist of the now defunct MedicineShoppe pharmacy located in Arlington,New Jersey, pled guilty to an Accusa-tion which charged her with third de-gree Medicaid fraud. Kim admitted thatbetween March and August 2001, shesubmitted bills to the Medicaid Pro-gram for prescription medicines forMedicaid patients that pertained toconditions and illnesses that the pa-tients did not suffer and for prescrip-tions not prescribed by physicians. Asmuch as $16,000 may have beenbilled to the Medicaid Program in thismanner, and the total fraud to the Med-icaid Program may have been as highas $35,000. On December 5, 2003,Kim was sentenced to one year of pro-bation. As a condition of probation, shewas ordered to pay a $1,000 criminalfine. She is suspended from participat-ing in the Medicaid Program for fiveyears and her pharmacist’s licensewas suspended for one year.

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State v.Douglas Tyer

On December 10, 2003, DouglasTyer pled guilty to two separate Accu-sations. The first Accusation chargedhim with Medicaid fraud and the sec-ond with receiving stolen property. Tyeradmitted that he obtained stolen Med-icaid recipient cards which entitled himto medical benefits, including prescrip-tion drugs, paid for by the MedicaidProgram. He also admitted that he ob-tained stolen written prescriptions, pur-portedly issued by doctors for variousnarcotic medicines, so that he couldobtain narcotic drugs for personal usenot related to medical treatment. Tyerwas previously arrested and convictedfor similar conduct. Tyer is scheduledto be sentenced in early 2004.

State v.Steven Aberbach

On December 19, 2003, StevenAberbach pled guilty to an Accusationcharging him with health care claimsfraud. Aberbach, a licensed pharmacistand owner/pharmacist of SpringfieldPharmacy located at 234 Mountain Av-enue in Springfield, admitted that be-tween August 2001 and June 2003, hefilled legitimate prescriptions for medi-cines on doctors’ orders for a Medicaidpatient, then added several false pre-scriptions for the same patient so thathe could fraudulently bill the MedicaidProgram. Aberbach is scheduled to besentenced in early 2004.

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2003 Medicaid2003 Medicaid2003 Medicaid2003 Medicaid2003 MedicaidCivil Case SettlementsCivil Case SettlementsCivil Case SettlementsCivil Case SettlementsCivil Case Settlements

Pfizer, Inc.The New Jersey Medicaid Pro-

gram and the National Association ofMedicaid Fraud Control Units reacheda settlement agreement with Pfizer,Inc., maker of Lipitor, an anti-choles-terol medication. Pfizer violated thefederal Medicaid drug rebate statuteby failing to accurately report statuto-rily mandated “best price” informationon the drug.

As part of the settlement, New Jer-sey recovered $1,250,626 in restitution,penalties and interest.

Lifescan, Inc.The New Jersey Medicaid Program

and the National Association of Medic-aid Fraud Control Units reached asettlement agreement with Lifescan,Inc. Lifescan manufactures and sellsblood glucose monitors and test strips.Lifescan violated Food and Drug Ad-ministration (FDA) statutes by market-ing an adulterated and misbrandedmedical device, the Sure Step blood glu-

cose monitor system. The State of NewJersey recovered $293,282 in restitutionand penalties as a result of this settle-ment agreement.

Abbott Laboratories, Inc.A settlement agreement was

reached between Abbott Laboratories,the New Jersey Medicaid Program andthe National Association of MedicaidFraud Control Units. Abbott paid kick-backs, which are unlawful under theMedicaid fraud statute, to durablemedical equipment suppliers and nurs-ing homes in exchange for the suppli-ers and homes ordering Abbott prod-ucts. Abbott supplied enteral feedingproducts which were billed to the Med-icaid Program. The State of New Jer-sey recovered $936,206 in restitutionand penalties as a result of this settle-ment agreement.

GlaxoSmithKline, Inc.The New Jersey Medicaid Pro-

gram and the National Association ofMedicaid Fraud Control Units reacheda settlement agreement withGlaxoSmithKline, Inc., maker ofFlonase, a nasal spray, and Paxil,an anti-depressant medication.

GlaxoSmithKline violated the fed-eral Medicaid drug rebate statute byfailing to accurately report statutorilymandated “best price” information on thedrugs. This action decreased the rebateamount owed to the State. As part ofthe settlement, New Jersey recovered$2,376,534 in restitution and penalties.

Medicaid Section Chief John Krayniakmeets with members of his staff toreview an investigation.

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County Prosecutors’ OfficesCounty Prosecutors’ OfficesCounty Prosecutors’ OfficesCounty Prosecutors’ OfficesCounty Prosecutors’ OfficesCriminal Case SummariesCriminal Case SummariesCriminal Case SummariesCriminal Case SummariesCriminal Case Summaries

Atlantic CountyProsecutor’s OfficeState v.Robert Stanton

After pleading guilty on June 28,2002, to charges of theft by deception,conspiracy and falsification of records,Robert Stanton was sentenced to twoyears probation and ordered to makerestitution to the First Trenton Indem-nity Insurance Company. Stanton hadfalsely reported his car stolen on May19, 1999, and filed a fraudulent insur-ance claim with First Trenton. Thefraud was discovered after the alleg-edly stolen vehicle was involved in anautomobile accident in Philadelphia,Pennsylvania. First Trenton’s examina-tion of the vehicle revealed that boththe ignition key and the remote werewith the vehicle at the time of the acci-dent and that there had been no dam-age to the steering column or forcedentry to the vehicle. Stanton admittedthat he had given the vehicle to a fe-male named “Dasia” so that she coulddispose of it for him. Dasia was lateridentified as Linda Hick-Jones who, af-ter being charged in June of 2001,failed to appear in court and became afugitive from justice. She was finally ar-rested on May 22, 2003 and pled guiltyto conspiracy on July 28, 2003.

State v.Charles Snively

On March 7, 2003, Charles Snivelywas sentenced to three years of proba-tion and payment of restitution to thePrudential Insurance Company afterpleading guilty to burning his car to col-lect on his insurance policy. Snivelyhad reported his car stolen in Novem-ber of 2002 and filed a claim with Pru-dential. Investigation triggered by a tipfrom a concerned citizen revealed that

Snively had conspired with four others,Steven Berenato, Lauren Hyson, PhillipFord and William O’Mally, to committhe fraud. Snively’s car was ultimatelyfound burned and dumped in sand pitslocated in Hammonton, New Jersey.His co-conspirators also pled guilty tocharges of conspiracy to commit arsonand received sentences ranging fromtwo to five years of probation.

State v.Richard White

On September 26, 2003, RichardWhite was charged with theft by de-ception for allegedly failing to report in-come to the New Jersey State Pharma-ceutical Assistance to the Aged andDisabled (PAAD) Program. Accordingto PAAD, White allegedly received over$45,000 in benefits to which he wasnot entitled because he failed to reportincome from a tenant of a rental prop-erty he owned.

State v.Frank Martini

On August 11, 2003, Frank Mar-tini was charged with attempted theftfor allegedly falsely reporting that hehad been robbed at the TropicanaHotel and Casino on July 7, 2003. Af-ter conducting an initial investigationof Martini’s claim, the Tropicana re-ferred the matter to the CountyProsecutor’s Office.

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Bergen CountyProsecutor’s OfficeState v.Michael Hlavaty

On September 29, 2003, MichaelHlavaty pled guilty to attempted theftby deception for falsely reporting thathis 1994 Acura Integra had been stolenfrom the Loews Movie Theater inRidgefield Park, New Jersey. Thecharges emanated from a cooperativeinvestigation between Ridgefield ParkPolice Department and the BergenCounty Prosecutor’s Insurance FraudSquad. Hlavaty is awaiting sentencing.

State v.Daniel Henriques,Helder Bronco,and Tomasco Piccirillo

On April 28, 2003, DanielHenriques and Helder Bronco pledguilty to theft by deception for defraud-ing G.E. Auto Insurance of $70,000.Tomasco Piccirillo had reported that his2001 Mercedes Benz SL500 was sto-len from Fairview, New Jersey, when,in actuality, Henriques and Bronco hadtaken the vehicle with Piccirillo’s knowl-edge. This joint investigation betweenthe Bergen County Sheriff’s Depart-ment and the Bergen CountyProsecutor’s Office ultimately resultedin the apprehension of both Broncoand Henriques for their roles in the pur-ported motor vehicle theft. Piccirillo,who was also charged, did not pleadguilty and is pending trial.

State v.Joann McGradya/k/a Joanne Schmidt

On December 20, 2002, JoannMcGrady, otherwise known as JoanneSchmidt, pled guilty to insurance fraudin a scheme to divert Medicare pay-ments from Dr. Manoucher Katebian toher own bank account. On March 7,2003, Joann McGrady was sentencedto serve five years in New Jersey Stateprison, where she currently resides.

Burlington CountyProsecutor’s OfficeState v.Jerri L. Green

On August 11, 2003, Jerri L. Greenpled guilty to health care claims fraudfor using her Horizon/Mercy prescrip-tion card to fraudulently pay for pre-scription drugs for which she had sub-mitted a phony script.

State v.Cheryl Anderson-Morris

On July 8, 2003, Cheryl Anderson-Morris was indicted for attempted theftby deception for allegedly filing afraudulent insurance claim with NewJersey Manufacturers Insurance Com-pany for the theft of her 1998Oldsmobile Intrigue on January 4,2003. Anderson-Morris reported to po-lice that she had parked her car onJanuary 3, 2003 and that the last timeshe saw the vehicle was the followingday on January 4, 2003. The State in-tends to prove at trial that the vehiclewas torched with an accelerant inPhiladelphia on January 3, 2003, priorto the time that Anderson-Morris claimsto have last seen her car.

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State v.Patrick Nelsona/k/a Michael Nelson

On July 22, 2003, Patrick Nelsonwas sentenced to two years probationconditioned upon serving 180 days inthe county jail for committing healthcare claims fraud and obtaining con-trolled dangerous substances by fraud.Nelson fraudulently obtained prescrip-tion drugs from pharmacies and paidfor them by using other people’snames and prescription cards.

Camden CountyProsecutor’s OfficeState v.Jeffrey Riendeau

On January 17, 2003, JeffreyRiendeau of Blackwood, New Jersey,was sentenced on charges of at-tempted theft by deception for havinghis 2000 Toyota Tacoma burned in or-der to collect on his insurance policy.He was sentenced to five years proba-tion conditioned upon serving 364days in the county jail’s work releaseprogram. Because he was caught be-fore receiving payment on his claim toAllstate, Riendeau was not required tomake restitution, but he was requiredto continue making his car paymentsto Toyota Financial. Both of his co-defendants were previously sentencedto serve three years in State prison.

State v.Garlin Holmesand Karen Holmes

On September 8, 2003, GarlinHolmes and his mother, Karen Holmes,pled guilty after being indicted in ascheme in which Garlin pretended tobe someone else in order to obtain in-surance coverage, and then used thatidentity to report a 2001 SUV as stolen.

Both defendants testified in an Examina-tion Under Oath (EUO), a proceedingsometimes required by insurance com-panies to obtain claimants’ facts underoath. At the EUO, Garlin Holmes contin-ued his impersonation. Despite his ear-lier insistence that he was someoneother than himself, Garlin Holmes ulti-mately was sentenced to three yearsprobation and 150 hours of communityservice on a conviction for conspiracy,while his mother, Karen Holmes, wasadmitted into the PTI Program. The in-surer, First Trenton, had denied theclaim after an investigation by its Spe-cial Investigation Unit (SIU).

State v.Natalee Jacksonand Kenneth Jackson

On September 17, 2003, NataleeJackson and her husband, KennethJackson, entered guilty pleas in a caseinvolving the theft of $320,000 in insur-ance proceeds from Mrs. Jackson’sformer employer, Pennsauken MRI.Natalee Jackson had been employed inthe billing department of PennsaukenMRI from July of 2001 through Febru-ary of 2003, when a local attorney noti-fied Pennsauken MRI that a check writ-ten to the company for services renderedhad been deposited into the wrong ac-count. After a joint investigation by thePennsauken Police Department and theCamden County Prosecutor’s InsuranceFraud Unit, it was determined that addi-tional insurance checks drafted toPennsauken MRI, and totaling approxi-mately $320,000, had been deposited byMrs. Jackson into the business accountof Family Auto & Truck Parts, Inc., abusiness run by Mrs. Jackson and herhusband, Kenneth. Commerce Bank,which was required to reimbursePennsauken MRI for most of the stolenfunds, had sustained substantial lossesas a result of the theft committed by theJacksons. Natalee Jackson’s plea

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agreement includes a six year prisonterm. Her husband Kenneth, who alsopled guilty in the theft scheme, admit-ted to taking $46,000 of the stolenfunds for his own use, and is expectedto receive a term of probation. BothJacksons will also be required tomake restitution to Pennsauken MRIand Commerce Bank.

State v.Thomas Bell

On September 24, 2003, ThomasBell pled guilty to identity theft for ob-taining treatment at various State andlocal medical facilities using the nameand birthdate of an acquaintance sothat Medicaid would pay for histreatment. The total theft exceeded$13,000. In accordance with his pleaagreement, Bell has agreed to serve aterm of 364 days in the county jail as acondition of probation and to makerestitution to, and sign civil judgmentsin favor of, the two medical providerswhich were denied Medicaidreimbursement when Bell’s scamwas uncovered.

Cape May CountyProsecutor’s OfficeState v.Michael Quinn

On April 8, 2003, Michael Quinn,president of Quinn–Woodbine, Inc., wasindicted on two counts of theft by decep-tion for allegedly taking deductionsfrom employees each week for healthinsurance and using the funds to sat-isfy other obligations of his business,which left the employees without healthinsurance from August of 2000 toFebruary of 2001.

State v.Ed Camp

On July 1, 2003, Ed Camp was in-dicted on charges of theft by deceptionand filing a false police report for alleg-edly damaging his own motorcycle inorder to collect insurance proceeds un-der his policy. Before he was charged,he had collected over $5,800 from hisinsurance company.

State v.John McHugh

On October 19, 2002, JohnMcHugh was charged with theft by de-ception and filing a false police reportfor falsely reporting his boat stolen inCape May County while he stored it atthe house of a friend in Pennsylvania.On May 8, 2003, he was sentenced tofive years probation and required tomake restitution in the amountof $23,695.

Essex CountyProsecutor’s OfficeState v.Enma Lopez,Vincente Condor, Juan Mazorra,and Marco Sanchez

On October 28, 2003, an EssexCounty Grand Jury returned an indict-ment charging Enma Lopez, VincenteCondor, Juan Mazorra, and MarcoSanchez with arson for hire, aggra-vated arson, conspiracy, and at-tempted theft by deception. Thecharges stem from the June 14, 2003arrest of Juan Mazorra and MarcosSanchez as they allegedly attemptedto burn a 1999 Toyota Corolla belong-ing to Enma Lopez in the City of New-ark. At trial, the State intends to provethe involvement of Lopez in thescheme. Lopez is also alleged to havemade a false claim against State FarmInsurance Company.

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State v.Santos Romanand Syhan Roman

On June 6, 2003, Santos Romanwas sentenced to a three year prisonterm for his role in burning a 2000Toyota Camry leased by his co-defen-dant, Syhan Roman. Both were in-dicted on December 17, 2002 oncharges of aggravated arson, con-spiracy, and theft by deception fromLiberty Mutual Insurance Company inconnection with the burning of the car.Syhan Roman was admitted into PTIon May 5, 2003 in consideration for hercooperation in the investigation.

State v.Raffaele Arcidiacono,Ximena Arcidiacono,Samuel Gonzalezand Ronny Ortiz

On March 18, 2003, RaffaeleArcidiacono, Ximena Arcidiacono,Samuel Gonzalez, and Ronny Ortizwere indicted on charges of arson forhire, aggravated arson, conspiracy,and theft by deception from State FarmInsurance Company for torching a2001 Chrysler LHS on September 9,2002 in the City of East Orange. Thevehicle was originally reported stolenout of Kearny, New Jersey. SamuelGonzalez pled guilty and was sen-tenced on October 3, 2003 to servethree years in State prison. RaffaeleArcidiacono, Ximena Arcidiacono, andRonny Ortiz were accepted into PTI fortheir cooperation in the case.

State v.Sonia Lizardi

On April 15, 2003, Sonia Lizardiwas indicted on charges of aggravatedarson, conspiracy, and theft by decep-tion. Lizardi allegedly falsely reportedher 2000 Ford Focus stolen in Newark,New Jersey. The car was subsequentlyfound burned. Lizardi, who made a

claim with her carrier, State Farm Insur-ance Company, gave a statement im-plicating herself and a second indi-vidual. The State intends to prove thatthe fire was deliberately set to the inte-rior of the car and to rely upon the co-operation of Lizardi to secure an indict-ment of the other individual.

Gloucester CountyProsecutor’s OfficeState v.Michael Ruggiero

On April 17, 2003, MichaelRuggiero was indicted for attemptedtheft by deception and perjury for al-legedly falsely reporting his 1994Cadillac as having been stolen from ashopping center parking lot in Wash-ington Township, New Jersey. The in-vestigation revealed that the vehiclehad been set ablaze in Philadelphiaan hour before Ruggiero claimed tohave parked it in New Jersey, and thatthe GM Vehicle Anti-Theft System, in-cluding the ignition, had not been de-feated. Ruggiero subsequently wasaccepted into the PTI Program andagreed to pay a civil fine.

State v.Marcial Harrigan

On November 7, 2003, MarcialHarrigan was sentenced to a jail termof nine months for knowingly displayinga fraudulent insurance identificationcard to a police officer during a policestop on Valentine’s Day.

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Hudson CountyProsecutor’s OfficeState v.Oscar Acosta, Reynaldo Ayala,Victor Hernandez, Jose Acosta,Julio Madera and Angel Ciprian

On May 27, 2003, Oscar Acostaand Reynaldo Ayala pled guilty to con-spiracy to commit health care claimsfraud. Oscar Acosta is presently serv-ing time for another crime and has notyet been sentenced. Reynaldo Ayalawas sentenced to five years probationand ordered to pay restitution of$7,398. On September 5, 2003, VictorHernandez pled guilty to health careclaims fraud and was sentenced to fiveyears probation and ordered to pay$11,452 in restitution. Finally, on Sep-tember 11, 2003, Jose Acosta pledguilty to health care claims fraud andwas sentenced to five years probationand ordered to pay $5,122 in restitu-tion. Arrest warrants have been issuedfor two other defendants who fled tothe Dominican Republic.

State v.Kevin Dillon

Kevin Dillon pled guilty to forgeryon June 11, 2003 and was sentencedto five years probation and ordered topay restitution of $16,141 to the Stateof New Jersey. Dillon admitted that hestole blank prescription pads from adoctor’s office and forged them to ob-tain medication through Medicaid forhis own personal use over a twoyear period.

State v.Eduard Draude, Jr.and Eduard Draude, Sr.

On April 22, 2003, Eduard Draude,Jr., pled guilty to theft by deception,and his father, Eduard Draude, Sr.,pled guilty to conspiracy to commit

theft for the fraudulent disposal of a 2001Acura Integra. The vehicle was recoveredcompletely stripped and destroyed sev-eral days before it was falsely reportedstolen. Father and son were admittedinto PTI on June 23, 2003 and ordered toreimburse $16,984 to the AmericanHondaFinance Company.

State v.Jose Ramirezand Heriberto Eric Rodriguez

On May 14, 2003, Jose Ramirezpled guilty to attempted theft by decep-tion, and on May 22, 2003, HeribertoEric Rodriguez pled guilty to con-spiracy to commit theft by deception.The alleged theft was reported whenthe vehicle was already in a police im-pound lot following the issuance of traf-fic summonses to a third party opera-tor, who was unable to produce owner-ship or insurance documents whenstopped by police. The attempted fraudwas discovered by North Bergen policewhen they checked their databases forany recent police contact involving thevehicle after receiving the stolen ve-hicle report. The insurance claim wasdenied because the vehicle was“recovered.” Both defendants were ad-mitted into PTI on September 10,2003. A third party is expected to bearrested shortly for his participation inthe conspiracy.

State v.Isaac Polan and Lidia Velez

On September 16, 2003, IsaacPolan and Lidia Velez pled guilty to Ac-cusations charging theft by deceptionfor fraudulently attempting to avoidmonthly lease payments. Polan re-ported Velez’ 2002 Toyota Avalon,which had been torched in New YorkCity twelve hours before, as stolenfrom a K-Mart parking lot in NorthBergen around noon the following day.

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Defendants are scheduled to besentenced shortly and to be ordered topay restitution of $30,648 to theinsurance company.

Mercer CountyProsecutor’s OfficeState v.Anthony Klimeczak

On May 9, 2003, AnthonyKlimeczak was indicted and chargedwith attempted theft by deception forallegedly submitting three suspiciousinsurance claims to the Harleysville In-surance Company totalling over$50,000. Klimeczak would allegedlyrent vehicles from various rental agen-cies, exchange them for crack cocaine,report them as stolen, and file phonyinsurance claims. Harleysville referredthe case to the Mercer CountyProsecutor’s Insurance Fraud Unit be-cause of the number of similar claims itreceived from Klimeczak in so short atime. The Unit located an associate ofKlimeczak who allegedly witnessedsome of the transactions.

State v.Ibrahim Farraj

On June 23, 2003, Ibrahim Farrajwas sentenced to two years probation,payment of $300 in restitution, and fiftyhours of community service afterpleading guilty to the sale of fivefraudulent insurance identificationcards to a confidential informant andan undercover Mercer CountyProsecutor’s Office Detective. The ar-rest of the defendant came after a sixmonth investigation into simulated in-surance cards displayed by variousdrivers to police officers in the Trentonarea. When not making sandwiches ata deli owned by his family in Trenton,Farraj would type out insurance cardson a typewriter in the back of the deli

and sell them to customers. As a firsttime offender, Farraj would have nor-mally qualified for entry into the PTI Pro-gram but was excluded because of theongoing nature of his offense.

Monmouth CountyProsecutor’s OfficeState v.Stephen Penalverand Faith Penalver

On September 5, 2003, StephenPenalver was sentenced to serve a to-tal of 11 years in State prison followinghis conviction after a May trial for ar-son and theft in connection with set-ting his mother’s home on fire to col-lect insurance proceeds. For her partin the scheme, Penalver’s mother,Faith Penalver, was sentenced toserve four years in State prison on ar-son and theft charges.

Morris CountyProsecutor’s OfficeState v.Paul Wichman, M.D.

On October 24, 2003, PaulWichman, M.D., an internist, was sen-tenced to serve a 45 day jail sentencein the Sheriff’s Labor Assistance Pro-gram (SLAP), payment of a $5,000fine, reimbursement of $600 in restitu-tion to Aetna Insurance Company, anda six-month suspension of drivingprivileges. Wichman pled guilty to ob-taining hydrocodone syrup, a Sched-ule III controlled dangerous sub-stance, for his personal use by usingsomeone else’s name.

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State v.Muhammet Erdoganoglu

On September 12, 2003,Muhammet Erdoganoglu, a Turkishalien illegally in the United States, wassentenced on a charge of theft by de-ception to 30 days in jail and eighteenmonths probation for purchasing theidentity of another person to fraudu-lently obtain a New Jersey driver’s li-cense and automobile insurance in theother person’s name. The prosecutionwas the product of an investigation bythe Allstate Insurance Company.

State v.Wanda Reevesand Clifton Baskerville

On September 23, 2003, WandaReeves and her boyfriend, CliftonBaskerville, were indicted for forgery,conspiracy and the theft of over$118,000, for their respective roles in ascheme in which Reeves, a former em-ployee of an insurance brokerage, al-legedly had settlement checks mailedto herself and Baskerville from claimsshe fabricated.

State v.Linda Toth

On November 14, 2003, LindaToth, a former employee of a medicalgroup, was sentenced on two counts ofembezzling for funneling over $18,000in insurance payments, issued to themedical group, into her own account.Toth’s sentence requires her to serve45 days in the Sheriff’s Labor Assis-tance Program (SLAP), two years pro-bation and make full restitution.

State v.Katherine Kelly

On September 10, 2003,Katherine Kelly was indicted for thecrime of “Insurance Fraud” under thestatute enacted in June of 2003, aswell as on charges of theft, for alleg-

edly fraudulently filing for, and obtain-ing, unemployment insurance ben-efits. Kelly had also previously beenindicted for the theft of RandolphTownship school funds.

State v.Suzanne Elsmore

On February 4, 2003, SuzanneElsmore was indicted for theft andhealth care claims fraud. The indict-ment alleges that Elsmore fraudulentlyobtained Medicaid benefits in excessof $3,000.

Ocean CountyProsecutor’s OfficeState v.Yong Jin Kim

On October 3, 2003, Yong Jin Kimwas sentenced to serve a term of 364days in the Ocean County Jail andagreed to pay a civil fine in the amountof $100,000 after pleading guilty tohealth care claims fraud for running anillegal acupuncture practice for severalyears in Toms River, New Jersey, with-out holding the requisite license anddespite the issuance of a civil injunc-tion barring him from conducting sucha practice without a license. Kim’s con-tinuing practice of acupuncture was in-vestigated by undercover investigatorsfrom the Ocean County Prosecutor’sOffice and OIFP. His conviction forhealth care claims fraud was basedupon his billing of various insurancecompanies for services which, withoutan acupuncture license, he was notpermitted to provide or bill.

State v.Michelle Zalta, et al.

The intentional arson of a leased1998 Honda on April 8, 2002 in SouthToms River resulted in the indictmentof nine individuals for their alleged par-ticipation in a scheme to destroy the

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car and file an insurance claim so thatthe lessee, Michelle Zalta, could avoidpenalty payments for excess mileageunder the expiring lease. The fraudscheme was doomed from the start,however, when the car was discoveredon fire in the South Toms River area atthe same time that Zalta was falsely re-porting to police in Eatontown that hercar had just been stolen from theEatontown Mall. Zalta eventually con-fessed to her involvement in thescheme as did the other participants.Zalta was sentenced to serve a term ofprobation and make full restitution,while others in the scheme receivedsentences ranging from probation andentry into the PTI Program to the imposi-tion of substantial jail terms.

State v.Rick Demartini

On August 14, 2003, a 1967 Cessna182 was stolen from the Lakewood Mu-nicipal Airport. After a multiagency inves-tigation involving the Ocean CountyProsecutor’s Office, the Lakewood Po-lice Department, the Federal AviationAdministration, the Federal Bureau of In-vestigation, the Royal CanadianMounted Police, and several out-of-state police departments, tracked theplane through Ontario, Canada, theplane was recovered on September 12,2003 at the Springfield Municipal Airportin Minnesota. Rick Demartini wascharged in Minnesota with theft and re-ceiving stolen property, and is also likelyto face theft charges in New Jersey, as

well as insurance fraud charges in Min-nesota where Demartini allegedly liedabout his ownership of the plane on aninsurance application.

Passaic CountyProsecutor’s OfficeState v.Charles Nisivoccia, D.C.,and Craig Klein, D.C.

On May 1, 2003, chiropractors,Charles Nisivoccia and Craig Klein,partners in a Clifton Chiropractic Office,pled guilty to using a “runner” and en-tered the county’s PTI Program. Theguilty pleas resulted from a six monthinvestigation in 2001 when, over a fourmonth period, the chiropractors paid aconfidential informant $900 for each offive patients who were referred to theiroffice. Nisivoccia and Klein also agreedto each pay a civil fine of $25,000.

State v.Timothy Seiger

On August 11, 2003, TimothySeiger pled guilty to an Accusationcharging him with theft by deception.On March 3, 2003, Seiger reported his1999 Ford Mustang stolen to theTotowa police. Seiger told the Totowapolice that he had driven his car towork at 6:15 in the morning and dis-covered it missing after work at ap-proximately 4:30 p.m. The PatersonFire Department, however, had recov-ered the vehicle the day before, onSunday, after the car had been in-volved in a fire. In his plea, Seiger ad-mitted that the car had not been sto-len. Seiger was admitted into the PTIProgram and agreed to pay $11,695 tothe Onyx Acceptance Corporation.

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State v.Diana Heinzelman

On March 11, 2003, DianaHeinzelman was indicted on charges oftheft by deception and false swearing.On June 18, 2002, Heinzelman re-ported her leased 1999 Toyota Rav4stolen to the Paterson police. The ve-hicle was recovered eight days later inNew York City. Investigation ofHeinzelman’s insurance claim revealedthat Heinzelman lied about the mileageon the vehicle and failed to report priordamage to the vehicle. On May 5,2003, Heinzelman pled guilty to theftby deception, entered the PTI Programand agreed to pay $6,620 in restitutionto Toyota Motor Credit.

State v.Rafael Perez, Luz Vargasand Vinicio Vargas

On June 3, 2003, Rafael Perez,Luz Vargas, and Vinicio Vargas wereindicted on charges of health careclaims fraud and theft by deceptionstemming from a car accident thatoccurred in Passaic on June 23,2001. The accident involved two ve-hicles, including one which wasparked and unoccupied. Before thepolice responded, the Vargases and

Perez “jumped” into the parked vehicleclaiming they were injured in the acci-dent, and subsequently sought treat-ment for their “injuries.” On September8, 2003, Luz and Vinicio Vargas pledguilty to the health care claims fraudand theft by deception charges. Bothwere accepted into PTI. A bench war-rant was issued for Rafael Perez.

Salem CountyProsecutor’s OfficeState v.Rachel Cantie

On October 1, 2003, Rachel Cantiewas charged with forgery, fraud andthe falsification of records for allegedlystealing the identity of another womanby fraudulently obtaining the otherwoman’s name, Social Security num-ber, date of birth and birth certificatewithout the other woman’s knowledgeor consent. Cantie perfected the iden-tity theft by allegedly using the stoleninformation to obtain a New Jerseydriver’s license with her own photo atthe local office of the Division of MotorVehicles in Bridgeton, CumberlandCounty. Cantie then allegedly used thestolen identity to open a bank accountin the victim’s name in a neighboringcounty in March of 2002. Further inves-tigation revealed that Cantie had alsoapparently opened numerous otherbank accounts throughout New Jerseyand Delaware in the victim’s name. Asa consequence, the victim’s credit wasdestroyed and she was unable to obtainan apartment, employment, automobileinsurance or cell phone service. Cantieis now a fugitive from justice.

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State v.Russell Daniel, AndreaRichardson, Elnora Townsend,Martha Brown, et al.

In the summer of 2002, the SalemCounty Prosecutor’s Office and theCarney’s Point Police Department con-ducted a joint investigation resulting inthe charging of eleven individuals inconjunction with alleged schemes toproduce, sell or possess fraudulent orfictitious insurance identification cards.As a result, Andrea Richardson wassentenced to 23 days in county jail andtwo years probation; and RussellDaniel pled guilty and is awaitingsentencing. Two other individuals,Elnora Townsend and Martha Brown,were admitted into PTI. Twoothers, Mary Daniel and DawudRakeem, have been scheduled forstatus conferences.

Somerset CountyProsecutor’s OfficeState v.Richard Chang

In September of 2003, RichardChang, a collections coordinator in thefinance department of the corporateowner of Arbor Glen Retirement Com-munity, was sentenced to serve fiveyears in State prison and to pay$142,000 in restitution on charges oftheft by deception for stealing 40checks totaling $206,000 paid by theresidents of the community and theirinsurance companies.

Sussex CountyProsecutor’s OfficeState v.Brian Bailey

On March 28, 2003, Brian Baileywas sentenced to 270 days in theSussex County Jail, in addition to atwo year loss of his New Jerseydriver’s license for forgery, imperson-ation and tampering with publicrecords. Bailey stole the identity of adead man and obtained a fraudulentNew Jersey driver’s license and com-mercial insurance from Harleysville In-surance Company. In the short term,Bailey was able to save $1,500 in pre-miums by using the fraudulent identity.

State v.Julius Accardi

On May 5, 2003, Julius Accardipled guilty to theft by deception andwas admitted into PTI for filing an in-flated burglary claim with HomeownersInsurance Company in the amount of$2,309. Accardi also provided the in-surance carrier with restitution and aletter of apology.

State v.Anthony DeFelice

On June 6, 2003, AnthonyDeFelice was indicted for theft by de-ception and forgery. DeFelice receiveda check in the amount of $1,805 fromPenn National Insurance Company tomake repairs to the vehicle he leasedfrom GMAC but allegedly forged thesignature of GMAC and cashed thecheck instead.

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State v.Jessica Caiola

On July 14, 2003, Jessica Caiolawas enrolled in PTI on charges oftheft by deception, theft of servicesand issuing a bad check. Caiola al-legedly contacted her formeremployer’s insurance company andadded her personal vehicle to thefleet insurance policy. She agreed topay restitution and serve 120 hoursof community service.

State v.Maynor Rosarioand Lynn Rosario

On September 23, 2003, MaynorRosario pled guilty to conspiracy andtheft by deception for the reported theftof his wife’s 2000 Jeep Cherokee fromthe Rockaway Mall. He and his wife al-legedly conspired with two other individu-als to cover up the insurance fraud. Hiswife, Lynn Rosario, was enrolled in PTIon the charges and both agreed to makerestitution in the amount of $948 to NewJersey Manufacturers Insurance Com-pany, which had repaired the vehicle andplaced it in its fleet of vehicles.

Union CountyProsecutor’s OfficeState v.Cheri Jolley

On October 2, 2003, a search war-rant was executed at United Risk Man-agement Insurance Agency in Eliza-beth, and its office manager, CheriJolley, was charged with theft by failureto make required disposition of propertyreceived. Jolley allegedly took over$45,000 from at least eight differentbusinesses seeking insurance coveragefor their fleet vehicles, provided themwith temporary insurance cards, butfailed to ever place the coverage with aninsurance carrier.

State v.David and Wayne Pohida

On October 21, 2003, David andWayne Pohida were each chargedwith 17 counts of showing or display-ing a simulated motor vehicle insur-ance identification card. The Pohidasallegedly presented the cards to theLinden City Clerk as proof of insurancefor 17 taxi cabs owned by Tri-CountyTransportation t/a Linden Yellow Cab,which had previously been impoundedby police because they had noinsurance coverage.

State v.Roy Marroquinand Manuel Ramirez

On September 19, 2003, RoyMarroquin of Plainfield was sentencedto 180 days in the Union County Jail oncharges of second degree arson forparticipating in the burning of anemployee’s 2002 Ford Mustang.Marroquin was also placed on threeyears probation and ordered to pay hispro-rata share of $13,350 in restitutionto State Farm Insurance Company. Co-defendant and owner of the car,Manuel Ramirez, did not appear atsentencing and a bench warrant wasissued for his arrest.

163


Auto FraudCriminal Use of “Runners”

In the Matter ofVincent Maione

On June 9, 2003, Vincent Maioneexecuted a Consent Order in theamount of $5,000 for his part in a“runners” scheme. Maione bribedJersey City Police Departmentemployees to provide him withaccident reports to enable “runners” tosolicit accident victims for treatment atthe Downtown Chiropractic Facility.Maione and others participating in thescheme were prosecuted by theHudson County Prosecutor’s Office.

Fraudulent Automobile“Give-Up” ClaimsIn the Matter ofJohn B. Fagan

On January 14, 2003, John P.Fagan executed two Consent Orderstotaling $8,000 for his part in an “ownergive-up” scheme. Fagan, who was apolice officer in the West OrangePolice Department at the time of theoffense, filed a false police reportdated June 24, 1999, with the WaynePolice Department. Fagan also filed anAffidavit of Theft with his insurancecompany, New Jersey Manufacturers,containing false and misleadinginformation. Although Fagan claimedthat his vehicle had been stolen, Faganvoluntarily relinquished the car to otherpersons as part of a scheme to obtainpayment from the insurer. Fagan pledguilty to criminal charges stemmingfrom OIFP’s undercover investigation.

Members of an OIFP CivilAuto Insurance Fraud Squaddiscuss an investigation.

164

In the Matter ofJohnny Christian

On January 24, 2003, JohnnyChristian executed a Consent Orderrequiring him to pay $5,000 for falselyreporting his vehicle stolen. Christianreported his 2000 Nissan Pathfinderstolen to the New York City Police 68thPrecinct on June 27, 2001. Christianreported that his vehicle was parked at368 74th Street when it was stolen. TheNew York City Bureau of FireInvestigation, however, had recoveredthe vehicle burned on June 24, 2001.Christian knowingly submitted his falseand misleading statement on an Affidavitof Theft to Allstate Insurance Company.

Staged AccidentsIn the Matter ofWidania A. Montenez

On June 19, 2003, Widania A.Montenez executed a $5,000 ConsentOrder for participating in a stagedaccident scheme. As a result of thisscheme, 28 persons were indicted oncharges that they “set-up” more than90 “staged” automobile accidentswhich resulted in 24 insurancecompanies paying more than $2 millionin fraudulent automobile accident andpersonal injury claims. Montenez pledguilty to theft by deception and isawaiting sentencing.

In the Matter ofHumberto Diaz

On May 31, 2003, Humberto Diazexecuted a Consent Order for $5,000resulting from his involvement in thestaged accident scheme described in theWidania Montenez case. Diaz submittedfalse personal injury claims to AllstateInsurance Company. Diaz pled guilty totheft by deception and was sentenced toone year probation, payment of $5,859in restitution and a $200 fine.

In the Matter ofEmily Nieves

On November 7, 2003, EmilyNieves executed a Consent Orderrequiring her to pay $5,000 stemmingfrom her involvement in the stagedaccident scheme described in theWidania Montenez case. Nievessubmitted a fraudulent personal injuryclaim. She was admitted into PTI.

Licensed InsuranceProvider FraudIn the Matter ofRonald Vaughn

On April 22, 2003, Ronald Vaughn,a licensed insurance producer,executed a $5,000 Consent Order.Vaughn prepared forged documentswhich he presented to Conseco LifeInsurance Company in order to obtainan insurance policy for an individual.Vaughn forged the individual’ssignature on five documents whichmade the policy effective without theinsured having been notified about theadjusted premium.

FraudulentClaim ChecksIn the Matter ofChristopher Nangano

On January 10, 2003, ChristopherNangano executed a Consent Order inwhich he agreed to pay $14,500.Nangano was involved in a large-scale, multiple defendant conspiracy todefraud two insurance companies outof more than $600,000. Themastermind of the scheme, Carl Prata,of West Orange, New Jersey, wassentenced to five years in State prisonfor his role in devising and

165


implementing the scheme. Prataconcocted a scheme to access andmanipulate insurance companycomputer systems to process andissue fraudulent claim checks topersons who were not entitled to them.The OIFP investigation determinedthat, over a three year period from1998 to 2000, Prata created fraudulentcomputer files listing 45 individuals ashaving been involved in automobileaccidents. As a result, the carriers’computer systems processed andissued more than 50 fraudulent autoinsurance claim checks. Nanganoreceived three fraudulent checks fromAllmerica Insurance Company andSaint Paul Insurance. Nangano alsosolicited four others to receivefraudulent checks.

In the Matter ofTimothy Hanjian

On March 25, 2003, TimothyHanjian executed a Consent Orderfor $10,000. Hanjian was involved inthe Carl Prata scheme to receivefraudulent checks described in theChristopher Nangano case. Hanjianreceived a check from the AllmericaInsurance Company and solicitedfive others to receive fraudulentchecks as well.

In the Matter ofGlenn Sisti

On January 10, 2003, Glenn Sistiexecuted a Consent Order requiringhim to pay $9,500 for his participationin the Carl Prata scheme described inthe Christopher Nangano case. Sistireceived a fraudulent check from theAllmerica Insurance Company.

Health, Life,and Disability FraudProvider Fraud

In the Matter ofThomas S. Boselli

On January 16, 2003, Thomas S.Boselli executed a Consent Order inwhich he is required to pay $100,000.Boselli had been practicing chiropracticmedicine for 16 years without a license.Between 1995 and 2001, he submitted1,870 claims for 56 patients totalingmore than $125,000. Boselli was paid bythe carriers in excess of $54,000. Bosellifraudulently signed all the claim forms asa licensed chiropractor.

In the Matter ofYong Jin Kim

On August 12, 2003, Yong Jin Kimexecuted a Consent Order requiringhim to pay $100,000 for practicingacupuncture without a license. On July14, 1997, Kim forged the signature ofhis father, Ki Min Kim, who had died inOctober of 1995, in order to renew hisfather’s license to practiceacupuncture. Kim submitted claims toinsurance carriers using the name andlicense number of his deceased father.Kim was prosecuted for health careclaims fraud by the Ocean CountyProsecutor’s Office.

In the Matter ofRobert Napoliello, D.M.D.

On April 8, 2003, Dr. RobertNapoliello executed a $5,000 ConsentOrder for billing for services notrendered. Napoliello, a dentist, initiatedbut did not complete the work on apatient. Napoliello entered into a $1,500Administrative Consent Order with theDental Board and paid $1,500 inrestitution to HCA Insurance Company.

166

In the Matter ofMyrna L. Soriano

On September 26, 2003, Dr. MyrnaSoriano executed a Consent Order for$14,000 for submitting claims fortreatment she rendered to her ownson. Soriano altered the claimsdocuments, replacing her name withthe name of another physician. Sorianoalso entered into a $10,000administrative Consent Order with theEnforcement Bureau of the NewJersey Division of Consumer Affairs forher actions.

In the Matter ofAnthony Spano

On July 7, 2003, Anthony Spano, aphysical therapist for Circle of HealthClinic located in Hillside, New Jersey,executed a Consent Order for $5,000for knowingly submitting fraudulenthealth care claims bearing datesbetween August 31, 1999, and March1, 2000, to Chubb & Son. The claimscontained false and misleadinginformation, specifically billing for tendates of service, when, in fact, theservices were never rendered.

False Health Care Claims

In the Matter ofPatricia and Paul Sullivan

On June 9, 2003, Paul and PatriciaSullivan executed a Consent Order topay $25,000 stemming from theirparticipation in three schemes to defraudboth MetLife Insurance Company andBlue Cross/Blue Shield out of $48,380.The three schemes included alteringco-pays on prescription receipts,seeking reimbursement for full costswhen costs were not actually incurred,and seeking reimbursement for fullcosts of drugs when the drugs werenever actually dispensed.

In the Matter ofMonica L. Cooper

On March 26, 2003, Monica L.Cooper executed a $5,000 ConsentOrder for forging prescriptions for thecontrolled substances, Oxycontin andPercocet, and presenting them to CVSPharmacy. CVS unwittingly submittedthe forged prescriptions forreimbursement to Oxford Health Plansunder Cooper’s prescription drugbenefits. Cooper had previously beenconvicted of obtaining a controlleddangerous substance by fraud.

Civil Investigators with the OIFPProperty and Casualty Squad

conduct a case review meeting.

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In the Matter ofCassandra Hankinsand Jay Earl Hankins

On June 9, 2003, Cassandra andJay Earl Hankins executed ConsentOrders in the amount of $5,000 each forfiling false insurance claims. Jay EarlHankins took his ex-wife Paulette’sinsurance card and gave it to his fiancee,Cassandra Hankins, who presentedherself as Paulette Hankins, in order toobtain an abortion and dental work. Fourphony claims were submitted to MetLifeInsurance Company totaling $1,596.

FraudulentDisability Claims

In the Matter ofJohn W. Currie

On June 19, 2003, John W. Currieexecuted a Consent Order to pay$10,000 for repeatedly misrepresentinghis inability to work. As a result of themisrepresentations, Currie received$38,169 in disability benefits to whichhe was not entitled. Surveillance andemployment verification by UnumProvident revealed that Currie was, infact, employed full time. Currie’s claimwas closed and Currie reimbursed thecarrier for the full amount of benefits hewrongfully obtained.

Life InsuranceFraud

In the Matter ofPeter Pascarella, Jr.

On February 4, 2003, PeterPascarella, Jr., executed a $12,500Consent Order. Pascarella, who wasthe owner of Associated ConsultingGroup, filed several fictitious lifeinsurance applications with theEquitable Life Insurance Company.

In the Matter ofL.C. Thomas

On February 4, 2003, L.C.Thomas executed a $5,000 ConsentOrder for his role in fraudulentlyobtaining more than $1.2 million in lifeinsurance policies and attempting tocollect the benefits.

Thomas, a New Jersey licensedinsurance agent formerly doingbusiness in Teaneck, admitted that heassisted William Conyers, a licensedfuneral director who owned andoperated the Conyers Funeral Home inHackensack, and Conyers’ wife, Mollie,vice-president of Conyers Funeral Home,in falsifying several life insuranceapplications submitted to the AmericanNational Insurance Company and theLincoln Benefit Life Insurance Companyto obtain life insurance policies. Byconcealing the fact that the insuredpersons had pre-existing medicalconditions such as the AIDS virus,Thomas and the Conyerses intentionallydeceived the insurance companies intoissuing life insurance policies that thecompanies would not ordinarily haveissued given the medical conditions ofthe persons whose lives were insured. Inaddition, Thomas and the Conyersesfalsified the life insurance applicationsby naming persons, including membersof the Conyers family, as beneficiarieswhen they had no insurable interest inthe lives of the insured persons.

168

L.C. Thomas was convicted ofattempted theft by deception and wassentenced to probation with 500 hours ofcommunity service. The Conyerses wereconvicted of various offenses following ajury trial in Bergen County. WilliamConyers was sentenced to 11 years inState prison and fined $10,000. MollieConyers was sentenced to two yearsprobation conditioned upon serving 364days in the county jail. William Conyerswas referred to the licensing board forappropriate licensing sanctions.

Propertyand Casualty FraudFalse Homeowners Claims

In the Matter ofPeter Mangiola

On July 23, 2003, Peter Mangiolaexecuted a Consent Order requiring himto pay $10,000 for submitting falsereceipts in two homeowners claims.Mangiola submitted two false receiptsfrom Bertolino’s Pharmacy as part of hisclaims. On the first claim submitted toGeneral Accident Insurance Company,Mangiola was paid $9,769. On hissecond claim to Hanover InsuranceCompany, Mangiola attempted toreceive $12,358.

False CommercialClaims

In the Matter ofJulio N. Funicello

On February 4, 2003, Julio N.Funicello executed a Consent Order for$7,500 for knowingly conspiring withJonathan Doscher to deliberately submitfalse statements to the Ramsey PoliceDepartment concerning the purportedtheft of $13,000 cash from his place ofbusiness on April 10, 2001.Subsequently, a claim was presented toSelective Way Insurance, in an attemptto collect monies for this purported theft.

In the Matter ofVincent Zappulla

On May 21, 2003, VincentZappulla executed a Consent Orderfor $5,000 for knowingly providingfalse and misleading information toState Farm Insurance Company.Zappulla directed a contractor to drafta letter to State Farm stating that thetotal cost of restoration to a business,Laundry Time Incorporated, as aresult of fire damage was $52,385.The cost of the restoration wasactually substantially less.

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OIFP Civil LitigationOIFP Civil LitigationOIFP Civil LitigationOIFP Civil LitigationOIFP Civil Litigation

Division of Law Deputy AttorneysGeneral discuss trial strategy foran OIFP case.

State v.Winnie Cook

The State’s motion for SummaryJudgment against Winnie Cook wasgranted on June 20, 2003 in the sum of$61,300. Cook had totaled her automo-bile in October of 1998, but was not in-sured at the time. Subsequently, in De-cember of 1998, she applied for auto-mobile insurance without having notifiedthe insurance carrier that her vehiclehad previously been destroyed in an ac-cident. In January, 1999, Cook filed afraudulent automobile theft claim withher insurance company. The Judgmentagainst Cook was based upon the mul-tiple false statements Cook made insupport of her fraudulent claim.

State v.David Wiseman

The State was awarded SummaryJudgment on December 2, 2003against David Wiseman for two viola-tions of the Fraud Act stemming froma stolen jewelry claim against hishomeowners insurance policy.Wiseman had falsely reported that hewas with his fiancée in Minnesotawhen the jewelry was stolen and de-nied to his insurance carrier that hisfiancée had also filed a claim against,and had received payment from, herown renter’s insurance policy for thejewelry. Wiseman had previously en-tered into a Consent Order with OIFPin connection with a separate health in-surance matter. The court awarded theState a $25,000 civil penalty and$23,899 in fees and costs.

State v.Lee Lilly

The State’s motion for SummaryJudgment against Lee Lilly for makingmultiple false statements related to hisfraudulent automobile theft claim wasgranted on September 12, 2003. Thecourt’s award included the requirementthat Lilly pay the State $15,000 in civilpenalties and $3,288 in fees and costs.

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In the Matter ofMyrna Soriano, M.D.

Myrna Soriano, M.D., entered intoa Consent Order on September 26,2003 with the State in which sheagreed to pay a $14,000 civil penalty.Soriano also agreed to pay $10,000and costs to the New Jersey Board ofMedical Examiners in this matter.Soriano treated her hemophiliac sonand submitted claims to her healthinsurance carrier, which claims falselyrepresented that other doctors hadrendered the services to her child.Soriano concealed her own involve-ment in the treatment of her sonbecause she knew that the insurancecarrier would not reimburse her forservices she provided to an immedi-ate family member. Soriano also paid$3,865 in restitution to theinsurance carrier.

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Professional Licensing ProceedingsProfessional Licensing ProceedingsProfessional Licensing ProceedingsProfessional Licensing ProceedingsProfessional Licensing Proceedings

MedicalIn the Matter ofErvin Lepko, M.D.

On March 7, 2003, the New JerseyMedical Board suspended the medicallicense of Ervin Lepko, M.D. for oneyear based upon his plea of guilty tocommitting health care fraud.

In the Matter ofKenneth Zahl, M.D.

On April 11, 2003, the New JerseyMedical Board revoked the medicallicense of Kenneth Zahl, M.D. forfraudulent billing and collecting disabil-ity insurance benefits while still work-ing. The action has been stayedpending appeal.

In the Matter ofAlan Ottenstein, M.D.

On August 13, 2003, the New Jer-sey Medical Board temporarily sus-pended the medical license of AlanOttenstein, M.D. in part for alleged pos-session of explosives, a stun gun,loaded hand guns and more than apound of marijuana in his office.

In the Matter ofIrvin Gerson, M.D.

On September 19, 2003, the NewJersey Medical Board permitted thepermanent retirement of the medical li-cense of Irvin Gerson, M.D. for billinginsurance companies forneurodiagnostic tests performed by un-licensed individuals.

In the Matter ofChidi Anukwuem, M.D.

On September 22, 2003, the NewJersey Medical Board suspended thelicense of Chidi Anukwuem, M.D. forsix months based upon his excessive

prescribing of Serostim and Medicaidbillings of over $2 million. The suspen-sion has been stayed.

In the Matter ofSanford Weinger, D.P.M.

On October 16, 2003, the NewJersey Medical Board indefinitely sus-pended the podiatric license ofSanford Weinger, D.P.M. for billing in-surance companies for eight yearsduring which he did not possess acurrent podiatric license.

In the Matter ofJonathan Siegel, D.P.M.

On December 2, 2003, the NewJersey Medical Board revoked the po-diatric license of Jonathan Siegel,D.P.M. nunc pro tunc to February 24,1999, after being convicted of commit-ting insurance fraud.

ChiropracticIn the Matter ofDaniel Catanzaro, D.C.

On January 30, 2003, the New Jer-sey Chiropractic Board suspended thelicense of Daniel Catanzaro, D.C. forfive years, with the first three years ac-tive, for fraudulent insurance billing.

In the Matter ofNicholas Rosania, D.C.

On June 19, 2003, the New Jer-sey Chiropractic Board suspended thelicense of Nicholas Rosania, D.C. forfive years based upon his criminalconvictions for conspiracy, official mis-conduct and bribery in an insurancefraud scheme.

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In the Matter ofSamuel Evenstein, D.C.

On September 18, 2003, the NewJersey Chiropractic Board suspendedthe license of Samuel Evenstein, D.C.for three years, with the first six monthsactive, based upon his conviction forfailing to pay New Jersey gross incometax for three years.

In the Matter ofRoland Evans, D.C.

On September 18, 2003, the NewJersey Chiropractic Board suspendedthe license of Roland Evans, D.C. fortwo years, with the first year active, forhis criminal conviction of health careclaims fraud.

2003 statistics

Accountancy

Chiropractic

Dental

Medical

Nursing

Pharmacy

Total

Suspension RevocationVoluntarySurrender Reprimand Total

1

6

2

4

0

1

14

0

0

1

4

0

2

7

0

0

0

1

0

0

1

1

0

1

0

2

0

4

1

1

7

3

11

3

26

2003 Statistics

In the Matter ofGlen Poller, D.C.

On October 1, 2003, the New Jer-sey Chiropractic Board suspended thelicense of Glen Poller, D.C. for twoyears based upon a criminal convic-tion for violating the State’s statutewhich proscribes the hiring of “run-ners” to obtain patients. The suspen-sion was stayed.

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Professional Licensing ProceedingsProfessional Licensing ProceedingsProfessional Licensing ProceedingsProfessional Licensing ProceedingsProfessional Licensing Proceedings

DentalIn the Matter ofJohn McIntyre, D.D.S.

On February 19, 2003, the NewJersey Dental Board accepted the sur-render, with prejudice, of the licenseof John McIntyre, D.D.S. for his con-tinued practice of dentistry and billingfor services rendered during a periodof suspension.

In the Matter ofRalph Sharow, D.M.D.

On February 19, 2003, the NewJersey Dental Board revoked the li-cense of Ralph Sharow, D.M.D. uponhis guilty plea to committing healthcare fraud and income tax evasion.

In the Matter ofMichael Tsimis

On September 12, 2003, the NewJersey Dental Board suspended the li-cense of Michael Tsimis, D.M.D. fortwo years, with the suspension stayed,for double billing insurance carriers forthe same services on the same dates.

NursingIn the Matter ofDiane Supino, R.N.

On March 28, 2003, the New Jer-sey Board of Nursing reprimandedDiane Supino, R.N. for her havingknowingly provided false and mislead-ing information in support of thestaged theft of her vehicle.

PharmacyIn the Matter ofManuprasad Parikh, R.P.

On December 1, 2003, the NewJersey Board of Pharmacy acceptedthe surrender of the license ofManuprasad Parikh, R.P. to bedeemed a revocation, based on hiscriminal conviction for Medicaid fraud.

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Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:Closing the Loopholes on Fraud:OIFP’s Recommendations for Legislative and Regulatory ReformOIFP’s Recommendations for Legislative and Regulatory ReformOIFP’s Recommendations for Legislative and Regulatory ReformOIFP’s Recommendations for Legislative and Regulatory ReformOIFP’s Recommendations for Legislative and Regulatory Reform

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Pursuant to N.J.S.A. 17:33A-24,the Office of the Insurance Fraud Pros-ecutor (OIFP) is required to evaluateand formulate proposals for legislative,administrative and judicial initiatives tostrengthen insurance fraud enforce-ment. OIFP staff are vigilant throughoutthe year in identifying possible vulner-abilities and weaknesses in NewJersey’s insurance system, and in find-ing ways to address them. Many of therecommendations made by OIFP inprior Annual Reports have become lawby the adoption of regulations, or theenactment of legislation, responsive tothese recommendations. OIFP’s recom-mendations for 2004 are as follows:

Regulation ofPublic Adjusters

Statement of the Problem:Insureds who are fire victims are oftenoverwhelmed by solicitation from mul-

tiple public adjusters who arrive at theirhomes within hours of this catastrophicevent, sometimes before the fire is evenfully extinguished. Because most ofthese insureds have never before beenthe victim of a fire, they are often un-aware of their rights under theirhomeowners or renters insurance policy.Consequently, insureds whose homeshave burned have often fallen prey tooverzealous public insurance adjusterswho, for a fee based upon the percent-age of recovery, represent insureds withrespect to their claims under their insur-ance policies. Many public adjusterscharge exorbitant rates of up to 40 per-cent of the insured’s recovery. Becauseof the aggressive tactics employed bymany public adjusters, which includescontacting victims when they are mostvulnerable in the immediate hours follow-ing their loss, many victims recover farless under their insurance policies thanthey should because they have enteredinto contracts with public adjusters be-

Closing

The Loopholes

On FraudOIFP’s RecommendationsOIFP’s RecommendationsOIFP’s RecommendationsOIFP’s RecommendationsOIFP’s RecommendationsFor LegislativeFor LegislativeFor LegislativeFor LegislativeFor Legislativeand Regulatory Reformand Regulatory Reformand Regulatory Reformand Regulatory Reformand Regulatory Reform

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fore they have had an opportunity toconfer with others and to consider all oftheir options. Although public adjustersare currently prohibited under N.J.S.A.17:22B-13 from contacting an insuredbetween the hours of 6:00 p.m. and 8:00a.m. within the first 24 hours after the oc-currence of a loss, experience has dem-onstrated that this limitation should betoughened.

Proposed Solution:In order to protect vulnerable insuredsfrom the aggressive tactics of someoverzealous public adjusters, it is sug-gested that N.J.S.A.17:22B-13 beamended to provide that public adjust-ers be precluded from contactinginsureds within 48 hours after they sus-tain a loss compensable under an in-surance policy.

Regulation ofTowing Companies

Statement of the Problem:Some unscrupulous towing companiesartificially inflate fees for the towing andstoring of automobiles which have beeninvolved in accidents or which have beentowed and stored after retrieval as aban-doned or stolen property. In the absenceof a local municipal ordinance, or a con-tractual fee schedule entered into be-tween a towing operator and a munici-pality, insurance companies, municipali-ties and car owners may be charged ex-cessive sums of money for the servicesprovided by some towing operators. Theproblem is exacerbated when a towingcompany, which maintains a storageyard, fails to take adequate steps to as-certain and/or notify the owner of the ve-hicle of the storage charges which arebeing incurred, or, in some cases, that itis even storing the vehicle. Such a sce-nario may occur in a case where thetowing operator has been requested by

a municipality to remove a vehicle whichappears to be abandoned, but, is, infact, the subject of a theft. The “Fair Au-tomobile Insurance Reform Act of 1990”had previously authorized the Commis-sioner of the Department of Banking andInsurance to establish a towing and stor-age fee schedule to address the prob-lem of fraud and related abuses by tow-ing operators, particularly as it related tothose costs incurred in the context of acovered loss. That fee schedule, how-ever, was not supported by sufficientpenalties to prevent the charging of un-necessary or exorbitant fees by towingoperators, and permitted towing opera-tors to bill for other services not encom-passed within the fee schedule.

The Act was repealed in 1997 inconjunction with legislation that pro-vided municipalities with greater au-thority to regulate towing and storagebills. Under N.J.S.A. 40:48-2.54, mu-nicipalities which require the towingand storage of motor vehicles withoutthe consent of their owners are re-quired to adopt a “model schedule” oftowing and related storage fees basedupon the “usual, customary and rea-sonable” prevailing rates. UnderN.J.S.A. 40:48-2.49, other municipali-ties may adopt such a schedule. None-theless, insurers and owners aresometimes billed exorbitant “adminis-trative” and other fees, not addressedwithin such schedules. Such fees areeven imposed in connection with obtain-ing access to inspect a vehicle which isbeing stored.

Proposed Solution:In order to prevent unscrupulous towingcompanies from charging excessive andexorbitant fees in connection with a cov-ered loss, it is recommended that legis-lation be enacted similar to the repealedAct, authorizing the Commissioner ofthe Department of Banking and Insur-ance or other appropriate agency head

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to promulgate a schedule of appropriatetowing and storage fees applicable toautomobiles which have been damagedin accidents, or which have been recov-ered after being stolen. Such legislationshould provide greater detail with respectto the types of charges which towing op-erators may charge, not only to munici-palities, but also to insurers and own-ers, as well as stronger penalties forthose towing operators who violate thefee schedule. It should also require thetowing or storage yard owner topromptly take reasonable measures toidentify and notify the owner and insurerof the vehicle of its location and anytowing and storage fees that have ac-crued, or are accruing. The legislationshould not, however, repeal or otherwiselimit the current law which provides mu-nicipalities with authority to regulate tow-ing and storage fees as they relate tocosts incurred by those municipalitieswhich have chosen to enact ordinancesproviding for such regulation.

Unauthorized Practiceof Chiropracticor Psychotherapy

Statement of the Problem:It is a crime in New Jersey for a person,who is not properly licensed, to practiceor purport to practice medicine, podiatry,surgery, dentistry, or law. N.J.S.A.2C:21-20; N.J.S.A. 2C:21-30; N.J.S.A.2C:21-22; N.J.S.A. 2C:21-31. These pro-visions apply equally to persons whomay have once been licensed to providesuch services but whose license hasbeen suspended, revoked or surren-dered, as well as to persons who do notpossess the requisite expertise or train-ing while holding themselves out as li-censed professionals. Investigative ex-perience has shown that persons whoprovide such services without beingproperly licensed also frequently commit

insurance fraud by submitting bills inconnection with such services, particu-larly those practicing or purporting topractice in the medical or allied medicalprofessions. There is, however, no corre-sponding criminal provision in the lawaddressing the unauthorized practice ofchiropractic or psychotherapy, both ofwhich practices also frequently give riseto the fraudulent billing of insurancecompanies.

Proposed Solution:In order to achieve consistency and de-terrence, it is recommended that legisla-tion be enacted to criminalize the unlaw-ful practice of chiropractic and psycho-therapy in the same manner that stat-utes have been enacted which make it acrime of the third degree to engage inthe unlawful practice of certain other pro-fessions, such as medicine, dentistryand law.

Unlawful Transaction ofthe Business of Insuranceby Unlicensed Persons

Statement of the Problem:Persons who are not licensed as eitherinsurance agents or insurance brokerssometimes hold themselves out as li-censed or otherwise authorized insur-ance agents or brokers in order to en-gage in the business of selling insur-ance. In some cases, the person hasnever been licensed nor received anytraining qualifying that person to provideguidance in obtaining appropriate insur-ance coverage, while, in other cases,the person has once held a license, buthas lost it involuntarily through suspen-sion or revocation. Such persons createa substantial risk of harm to those withwhom they deal because they are un-qualified to provide appropriate guidanceand advice, because they may be un-able to “place” the insurance they pur-

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port to be selling, or because they maysimply steal premium payments fromprospective insureds without making anyattempt to obtain the anticipated insur-ance coverage. In some cases, thoseholding themselves out as agents or bro-kers even resort to issuing counterfeit in-surance cards and insurance policies toperfect their scams. While such conductis currently banned pursuant to the pro-visions of N.J.S.A. 17:17-12, which de-fines such conduct as constituting a“misdemeanor,” an outdated term forconduct which is now the equivalent of afourth degree crime under New Jersey’scriminal code, it is not part of NewJersey’s criminal code nor consistentwith the grading of similar crimes per-taining to various types of activity by un-licensed persons. Such crimes are cur-rently crimes of the third degree underthe penal code. Further, it is not suffi-ciently clear that such conduct is pro-scribed pursuant to the provisions of theFraud Act, which allows for the imposi-tion of civil fines for conduct which vio-lates that Act.

Proposed Solution:In order to achieve consistency anddeterrence, it is suggested that legisla-tion be enacted to make it a crime ofthe third degree under N.J.S.A. 2C:21-35 for any person to engage in the un-lawful transaction of the business of in-surance when not properly licensed todo so by the New Jersey Departmentof Banking and Insurance. As a corol-lary, the current provision banning suchconduct under N.J.S.A. 17:17-12 shouldbe repealed. It is further suggested thatthe Insurance Fraud Prevention Act beamended so as to include the definedconduct as a violation thereof, therebyalso subjecting such a person to the im-position of substantial civil fines.

Transfers.of.Title.toStolen.Vehicles

Statement of the Problem:Whenever title to a vehicle is obtainedthrough the Motor Vehicle Commission(MVC), there is no mechanism to deter-mine whether the vehicle which is thesubject of the title request is a vehiclewhich has been reported as stolen andentered into law enforcement’s NCICdatabase. Without such a mechanism,it is sometimes possible for a personwho has stolen a vehicle to obtain a fa-cially valid title to thatvehicle, despite the fact that thevehicle has been reported stolen tolaw enforcement authorities.

Proposed Solution:In order to prevent the unwitting transferof title to a stolen vehicle, it is recom-mended that at the time of issuance of atitle to any vehicle, the Motor VehicleCommission be provided with a meansto determine if the vehicle has been re-ported as stolen to any law enforcementauthorities, whether by providing limitedaccess to the NCIC database, by ex-tracting data from the NCIC database insuch a manner as to make it readily ac-cessible to MVC officials, or by suchother means as may be practicable.

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Revision.of.StatuteMaking.It.a.Crimeto.Use.“Runners”

Statement of the Problem:Investigative experience has demon-strated that many fraudulent insuranceclaims, particularly those relating to au-tomobiles, are driven by the conduct of“runners.” “Runners” are persons whoprocure patients or clients for licensedmedical and legal service providers inreturn for money so that those provid-ers can seek benefits under an insur-ance contract. In New Jersey, the Leg-islature enacted the “Criminal Use ofRunners” statute to proscribe suchconduct. Experience has shown, how-ever, that the use of the statute to com-bat insurance fraud would be en-hanced if the underlying policy reasonssupporting the statute were publishedas legislative findings and declarations.

Proposed Solution:For the sake of expediency, it is recom-mended that the Legislature enact re-medial legislation setting forth explicitlegislative findings and declarationsclearly enumerating the policy reasonsthat support the “Criminal Use of Run-ners” statute. Such legislative findingsand declarations will underscore therationale behind the enactment of thestatute and its application to conductdefined therein, even in the absence ofunderlying insurance fraud.

Reverse.Rate.Evasion

Statement of the Problem:In order to obtain lower insurance premi-ums, persons residing in New Jersey, ina practice commonly known as “reverserate evasion,” often obtain their automo-bile insurance in an adjacent state, de-spite the fact that their vehicles are prin-cipally garaged and used in New Jersey.While this form of “application fraud” or“premium fraud” is actually committed inthe adjacent state when the insurance isapplied for, and while the insurancecompanies which are victimized by thistype of fraud may not transact businessin New Jersey, New Jersey residents areput at risk because the out-of-stateinsurance policies may provide lesscoverage than that mandated in NewJersey, and because the out-of-stateinsurance policies may be voidedwhen the insurance carriers discoverthe underlying application fraud. It isalso inherently unfair and violative ofgood public policy to allow residents ofNew Jersey to fraudulently obtainout-of-state insurance coverage atlower rates than their law-abidingneighbors in New Jersey.

Proposed Solution:In order to achieve equity and protectthe law abiding citizens of New Jersey,legislation should be enacted to amendthe Insurance Fraud Prevention Act tomake the practice of “reverse rate eva-sion” a violation of the Act, therebysubjecting violators to the imposition ofsubstantial civil fines.

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Health Care ClaimForm Revisions

Statement of the Problem:Medical providers and those in the alliedmedical professions are often able toavoid civil or criminal responsibility forsubmitting fraudulent health care claimsbecause of the vague and imprecisemanner in which the claim forms arecomposed. Because claim forms are of-ten prepared by employees of the pro-vider, or by an independent businesscontracted by the provider, it is often dif-ficult, if not impossible, to hold the pro-vider responsible when the claim formscontain false, misleading or incompleteinformation. Further, the forms are fre-quently inadequate to elicit information asto the overall context of treatment withinwhich the billed service was rendered,whether the billed service was properlycoded and whether the billed service wasrendered by, or under the supervision of,a duly licensed professional.

Proposed Solution:In order to ensure greater accountabil-ity, health insurance claim forms,whether paper or electronic, should bedesigned so as to require the inclusionof information specifically identifying thetype of procedures, medical servicesand medical supplies provided, as wellas the amounts actually paid by the pa-tient. Forms should also elicit informa-tion identifying any person in theprovider’s office providing the servicesbilled, including the professional licensenumber and taxpayer identification num-ber (TIN) associated with the licensedmedical provider and with any persons orentities identified as having provided anyof the services set forth in the claimforms. The forms should also incorporatea certification specifically affixing per-sonal legal responsibility for the accu-racy of the claim with the professional

licensee in whose name, or under whosesupervision, the services were provided.The certification should specify that theresponsible provider has reviewed theclaim form and that it is accurate, com-plete and truthful with respect to all infor-mation contained therein.

Stricter Regulation ofthe DiagnosticImaging Industry

Statement of the Problem:Because of its relatively weak regula-tory framework with respect to theregulation of diagnostic imaging facili-ties, New Jersey is a particularly invit-ing target for unscrupulous operators.Currently, any private citizen, regard-less of experience in the medical or al-lied medical professions, may own adiagnostic imaging facility subject onlyto the condition that the facility is affili-ated with a licensed medical provider.Although prospective owners are re-quired to reveal any prior criminal con-victions when making application to theDepartment of Health, the Departmentlacks the authority to conduct the nec-essary criminal background checks toverify the veracity of the informationprovided by the applicant. Further, aprior criminal conviction does not nec-essarily, in and of itself, disqualify a

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person from owning a diagnostic imag-ing facility. Because diagnostic imagingis frequently prescribed for those claim-ing to have been injured in an automobileaccident, diagnostic imaging facilities areoften associated with treatment mills,and are often looked to as a source of re-ports to corroborate questionable or fabri-cated claims of injury.

Proposed Solution:In order to better assess the qualifica-tions of persons applying for ownershipof diagnostic imaging facilities, it is rec-ommended that legislation be enactedrequiring criminal background checksof all such applicants, providing the re-sources to conduct such backgroundchecks, and prohibiting the granting ofa license to any person who has beenconvicted of a crime which appears in-compatible with the traits of trustworthi-ness, honesty and obedience to lawand order.

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