Dirty Dozen Busted for $23M PIP Fraud Ring

Fla. Cops Raid Two Clinics, Apprehend 12 Suspects

A 13-month probe into a string of suspicious car crashes culminated yesterday in the arrest of 12 individuals, including a Cape Coral, Fla.-based physician.

Authorities believe the “dirty dozen” were bilking insurers out of $22.5 million a year in yet another scheme designed to take advantage of Florida’s oft criticized personal injury protection (PIP) system.

According to the federal indictments, the accused helped carry out “Operation Whiplash,” whereby certain clinics billed for exaggerated or non-existent medical services. Moreover, clinics allegedly employed talent scouts to find willing actors to participate in orchestrated crashes and then visit clinics—or at least sign forms to attest that they had—all over Florida.

Initial suspicions about these odd traffic patterns gave way to a full-blown investigation and a sting operation involving undercover agents who posed as participants wanting in on the action. The investigation, believed to be the largest of its kind in southwest Florida, led to a police raid of two of the presumed 31 clinics involved in the scheme: Xtreme Care and the C&A Family Rehab Center, both in Cape Coral, Fla. The president of Xtreme Care, Dr. Stephen M. Lovell, was one of the 12 apprehended.

One might assume that these undeserved profits were fueling lavish lifestyles. However, as authorities explained at a multi-agency press conference on Thursday, purchases made by the accused were surprisingly mundane.

“The expenditures were going all the way from purchases at McDonald’s to cruises,” said Josh Silko, the Cape Coral police detective who headed the investigation. “They weren’t living lavish lifestyles, purchasing houses or real expensive cars, but it was evident that they were profiting from this to live their everyday lives.”

Charges against the defendants range from health care fraud to money laundering, with possible sentences of 20 years for each charge. This substantial arrest underscores the vulnerabilities created by the state’s current PIP system. In light of the recent legislative session, there is hope that schemes such as “Operation Whiplash” will one day become the anomaly and not the norm.

 

Comments

Resource Center

View All »

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Guide: Top 15 E&O Risks-And How To Avoid Them

Accidents happen. But when it's an errors and omissions oversight, that accident can open your...

We'll Show You How to Reach Your Sales Goals

Whether you work alone or have a team of agents working for you, we can...

Forensic Insider eNewsletter

Reduce litigation expenses and enhance investigative acumen with forensic news & commentary. Sign Up Now!

Advertisement. Closing in 15 seconds.