NU Online News Service, March 22, 1:18 p.m. EDT
Insurance fraud-related convictions increased by 24 percent last year in New York State, the State Insurance Department's Fraud Bureau reported.
The spike in New York figures were called "significant" by Coalition Against Insurance Fraud Communications director Jim Quiggle who e-mailed that the tally "speaks to endgame convictions, which can be slow and hard to obtain, not solely case referrals or arrests that can quickly pile up."
He suggested that the results indicate the down economy, "is igniting insurance cons in New York as more cash-strapped people seek insurance bailouts."
Fraud bureaus around the U.S. are seeing an economy driven spike in many forms of fraud. New York seems to be falling into line as well, said Mr. Quiggle.
But, he noted, "You have to ask how much these impressive stats reflect the economy versus more aggressive prosecutions or the maturation of cases that have been in the pipeline for awhile. Most likely, a combination of factors are colliding to create this health spike in fraud convictions."
The New York Fraud Bureau annual report listed sharp increases in virtually all of the areas under the Bureau's responsibility. For example:
o A total of 499 people were convicted of insurance fraud or related crimes as a result of Bureau investigations in 2009, a 24 percent increase from the previous year. There were 738 arrests, somewhat fewer than the 755 arrests in 2008.
o The Bureau received 24,920 reports of suspected fraud, an increase of more than eight percent.
o A total of 1,707 new cases were opened for investigation, up nearly 25 percent.
o There were 184 arrests for workers' compensation fraud, up 16 percent.
o The Bureau's General Unit recorded 110 arrests in 2009, up from 69 the previous year.
Law enforcement responsibilities of the Bureau, the department said, include investigating a range of insurance-related crimes.
It said these include complex investigations like those involving a Monticello, N.Y. underwriter, who was convicted of stealing $22.5 million in premiums and a Monroe County podiatrist convicted of submitting $750,000 in fraudulent medical billings for treatments he never provided to nursing home patients.
Another case cited involved a pizza parlor owner who was assessed $97,000 after failing to provide workers' compensation coverage for his employees and an Erie County case, where a woman tried to buy insurance to cover car damages that had already occurred.
According to the Coalition, in 2009 on average, fraud bureaus reported the number of referrals received and cases opened increased in all 15 categories of fraud included in a Coalition survey.
The largest average increases were found in bogus health plans, drug diversion and fraud by insurance agents. The smallest increases involved staged automobile accidents, life insurance fraud and workers compensation fraud by employers.
More than a third of fraud bureaus reported reductions in their budgets in 2009. About one of four said staff positions also were eliminated in 2009 and 35 percent reported they were not allowed to fill empty positions.
"Insurance fraud is on the upswing and fighting this crime is among the Insurance Department's highest priorities. The Department is committed to working closely with local authorities to investigate and prosecute these cases. Insurance fraud is serious because it unnecessarily drives up the cost of insurance for honest New Yorkers," Insurance Superintendent James Wrynn said.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.