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 »

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Forensic Insider eNewsletter

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

Advertisement. Closing in 15 seconds.