N.Y. DOI Ramps Up Anti-Fraud Activity

"The department has been aggressively working with the district attorneys and law enforcement," Terry Marchon , a department spokesperson, told National Underwriter. "This has led to the apprehension of larger groups of offenders."

The department last week released the "Top 10 Rotten Apples List" of the worst cases of insurance fraud in the state for 2002.

"The Top 10 'Rotten Apples' represent insurance scams perpetrated in New York State that were particularly large, audacious or tragic," said Superintendent Gregory V. Serio in a statement.

He said the department list aims to draw attention to the crime of insurance fraud "as a way to educate consumers and make them aware of the various ways insurance fraud can occur."

He explained that the department works with law enforcement throughout the state as well as with insurance companies and public service agencies to eliminate fraud.

Worst among the offenders, the department said, was a woman who claimed her ex-husband had been killed in the World Trade Center tragedy so that she could collect on a life insurance policy. The investigation revealed that her ex-husband was alive and unaware of his ex-wife's pursuit.

Another case involved a woman working for Blue Cross Blue Shield who collected money by fraudulently using names of her family members on insurance claims.

In another high profile case, in what is believed to be the largest ongoing investigation of insurance fraud in the state, the president, the vice president and co-owner, and the general manager of a Suffolk County auto body shop were arrested for enhancing damages in order to hike insurance claims.

In the body shop investigation, more than 450 arrests have been made?305 in 2002, the department said.

The Top 10 Rotten Apples for 2002 list also includes:

? A resident and business owner in lower Manhattan who was arrested in November and charged with insurance fraud and grand larceny for being reimbursed by the Federal Emergency Management Administration for business space rental costs following the World Trade Center attack?after she had previously collected $58,000 for the same expense from Chubb Insurance.

? An insurance agent who was accused of collecting premiums from nine clients but failing to remit them to the appropriate insurer. He was also charged with issuing six fraudulent auto insurance identification cards and providing documents to a business owner indicating that the business had proper insurance coverage, when in fact no coverage existed.

? Three Brooklyn residents arrested for defrauding Prudential Insurance Company of $17,300. The defendants, it was alleged, in three separate transactions sought auto insurance by telephone, stating they would submit premium payments electronically to secure coverage. Although no money was transferred, they were able to receive refunds when they later "cancelled" the coverage.

? A former insurance agent in Harrison, N.Y., arrested for stealing more than $91,000 from a life insurance company by forging an elderly client's signature on an annuity refund check and keeping the records. The victim's daughter discovered the theft while reviewing her family's financial records.

? Thirty individuals, including 24 car owners and six alleged middlemen, were charged in an undercover sting operation that recovered $1.6 million and 68 stolen vehicles. Among those charged were a New York City public school teacher, a Long Island Rail Road engineer, a Manhattan registered nurse, a U.S. Postal Service worker and a Metropolitan Transportation Authority bus driver, the department said.

According to charges, the owners turned their cars over to middlemen to get rid of them, filed insurance claims falsely reporting the cars stolen, and received settlements of as much as $32,000. The cars were then sold by the middlemen to undercover detectives posing as junkyard dealers for up to $1,500. Thirty false insurance claims were filed that the department said could have potentially cost insurers $700,000.

? A Long Island woman, who became the beneficiary of her husband's workers' compensation benefits following his work-related death in 1980?provided she did not remarry. The department said an investigation found she remarried in 1990 and continued collecting nearly $110,500 in benefits.