Through all of this, the workers’ compensation system has matured from a fairly radical concept into an accepted societal safety net for employees who are injured on the job. Workers’ compensation insurance coverage has evolved from a voluntary to a mandatory system; from employee opt-in coverage to an opt-out system, which the employee rarely if ever invokes. Over time, the nation’s job sector has also changed, from predominantly industrial manufacturing to predominantly service-oriented. My father grew up in Brockton and I was probably in High School before I knew why he called it “Shoe City!”

The state’s workforce itself has become more gender neutral, more culturally and ethnically diverse, and overall, more educated. Likewise, the types of occupational injuries have shifted from injuries such as press and punch machine accidents to repetitive motion/stress disorders and “sick building” illnesses. In essence, as our economy’s base has shifted, the types of work-related injuries we see have become more discrete. In a system where causation is the only threshold the employee must cross, we are hit with the difficulty of a changing injury base wherein the cause of injuries alleged is not always obvious and often difficult to prove - or disprove.

That is not to say that the system is flawed. To the contrary, the direct benefits of the system are most obvious to the injured employee; fast, reliable payment of lost wages and medical bills when an on-the-job injury occurs. The indirect benefits of the system stem from the business and insurance side, making workplaces safer through aggressive loss prevention programs, making recovery from injury quicker through innovative rehabilitation plans; and if need be, retraining the injured employee for a different work environment altogether through vocational rehabilitation. But, in any system that is geared toward payment of benefits, there are those individuals who will seek to take advantage.

For that reason, on November 30th, the Insurance Fraud Bureau is pleased to present a seminar on Workers’ Compensation Fraud. The U.S. Chamber of Commerce estimates that 25% of all workers’ compensation claims are fraudulent. We have all seen the videos of allegedly injured workers waterskiing, roofing, digging ditches and most people are frustrated and angered by those who bilk what is a fundamentally and historically good system.

Please join us as we explore criminal prosecutions, administrative and civil remedies, and the most recent legal trends and tools available to those of us who work daily to ferret the fraud from the system.

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1 Now a part of the Liberty Mutual Group doing business as Wausau Insurance Companies

Insurance Fraud Bureau of Massachusetts
101 Arch Street, Suite 600
Boston, Massachusetts 02110-1103
Telephone (617) 439-0439
Fax (617) 439-0404
IFB Fraud Hotline 1-800-32FRAUD
IFB Home Page http://www.ifb.org

The names of individuals who are subject to indictment or complaint have been deleted in compliance with state law. However, individuals whose cases have reached final disposition and whose names have been publicly disseminated have been identified.

Property Fraud

STURBRIDGE- A Sturbridge man reported to police that a Honda tractor and attachments, belonging to a farm the subject operated with a partner but frequently stored on his property, had been stolen. The partner, after being notified by police of the theft of the farm’s equipment, informed police that he believed at the time of the alleged theft that the tractor was being repaired. The partner later stated to police that the subject informed him that he had received $6,000 from Farm Family Insurance Company for the theft loss and that the subject later found the tractor in the woods by his house. Police confirmed that the tractor was at a repair shop at the time of the reported theft.

A Sturbridge man pled guilty to charges of larceny and larceny by a single scheme in Worcester District Court on May 22, 2001. He was placed on probation for 18 months, the first year supervised, and ordered to pay $7,625 in restitution. Assistant District Attorney Kevin Greenhalgh of the Worcester County District Attorney’s Office prosecuted the case.

Slippery Engagement Ring

NATICK- A Natick woman insured her diamond engagement ring with Premier Insurance Company in 1997 and increased the coverage in 1999. In February 2000 she filed a false claim reporting she lost her ring on the commuter rail in Natick. She was paid $14,956 by Premier for the loss. After receiving the insurance money, the subject reinsured the ring over the Internet with Chubb & Son. A few weeks later she tried to collect on the new policy by claiming to Chubb that she lost the engagement ring while she shopped at a BJ’s Wholesale Club. She was never paid for this claim. The subject first told the IFB that the first claim was legitimate but that a friend had used her computer to insure the ring over the Internet without her knowledge. When questioned again, the subject admitted that both claims were fraudulent.

Tova E. Garcia Duby pled guilty to one count of larceny, one count of attempted larceny and two counts of insurance fraud on June 7, 2001 in Natick District Court. She was sentenced to two years of supervised probation and ordered to pay $14,956 in restitution to Premier, $461 in investigative costs to Chubb and a $2,500 fine to the Commonwealth. Former Assistant Attorney General Rafael Garcia of Attorney General Tom Reilly’s Insurance and Unemployment Fraud Division prosecuted the case.

Jewelry With a Bad History

MEDWAY- A Medway woman allegedly reported the same diamond ring and two pairs of earrings lost or stolen two separate times. In each instance, she reported the loss to local police and then filed insurance claims. In the first claim, Citation Insurance, a unit of Commerce Insurance Company, paid the subject $3,580 for the lost jewelry. The next month the subject allegedly insured the same ring with Pacific Indemnity, a unit of Chubb Insurance, and only four days later reported the ring and two pairs of earrings lost or stolen from a rented vacation home. Chubb Insurance learned of the earlier identical claim during its investigation and closed the claim when the subject failed to appear for scheduled Examinations Under Oath. The subject then obtained homeowners insurance from Travelers Property Casualty Insurance Company based on a homeowners insurance application in which she denied any prior losses. Travelers subsequently canceled that policy when it learned of the earlier claims.

On June 29, 2001, complaints were issued in Wrentham District Court against a Medway woman on two counts of insurance fraud, two counts of larceny and one count of attempted larceny. Assistant Attorney General John Crimmins of the AG’s Insurance and Unemployment Fraud Division is prosecuting the case.

Unlucky Twice Stolen Ruby Ring

DOVER- A Dover couple, owners of a Natick insurance and financial services agency, allegedly tried to fraudulently collect benefits for an alleged stolen ring. In 1996, the wife claimed that a handbag containing jewelry was stolen from her table at a Burger King. Her husband filed a $17,200 insurance claim for several stolen items, including a ruby ring. While processing the claim, the insurer, Quincy Mutual Fire Insurance Company, discovered that the couple previously reported the same ring stolen to another insurer, Travelers Insurance Company, and were paid $1,350, the value of the ring. The husband allegedly denied any prior insurance claims when he filed the second claim. Quincy Mutual Fire denied the new claim.

A Dover couple were charged with insurance fraud, attempted larceny and conspiracy in Quincy District Court on June 28, 2001. Assistant Attorney General Madeline Leone of the AG’s Insurance and Unemployment Fraud Division is prosecuting the case.

WILLIAMSTOWN- A dentist reported to Zurich Commerce/Maryland Insurance Company that dental equipment was damaged in a sewer back-up in the basement of his office. He claimed that two items valued at $6,455 were damaged and he was issued a check in the amount of $2,540 for partial payment for his claim. Subsequently, a claims representative who had requested an invoice for the replacement of the damaged equipment noticed that the invoice appeared to have been altered and contacted the dental products company for verification of the submitted information. The claims rep learned that the invoice submitted by the dentist was for a different purchase and that there was no record on file of a purchase to replace the damaged equipment.

Andrew Budz admitted to sufficient facts for a guilty finding on August 16, 2001 in Central Berkshire District Court on larceny and insurance fraud. The case was continued without a finding for one year. Budz was ordered to pay restitution of $2,540 and court costs of $3,000. Assistant Attorney General John Talbot, Jr. of the AG’s Insurance and Unemployment Fraud Division prosecuted the case.

HELPING HANDS: In February 2001, a Somerset man called police to report that he had been robbed at gunpoint by three men at his place of business. He claimed that the men stole over $40,000 in cash, jewelry and collectable sports memorabilia worth approximately $163,000. At the time of the robbery report, the subject claimed that three large men wearing masks and one with a handgun entered the store while he and another employee were present. The subject said he was ordered to open the cash register and safe and the men took items from display cases. Despite a police canvass of the area surrounding the store, a thorough police investigation and a request for public assistance, no one reported seeing three masked men entering or leaving the store at the time of the alleged robbery. After the subject filed a $259,000 claim with Pennsylvania General Insurance Company, and with information and evidence obtained during the joint Somerset Police/IFB investigation, police obtained an arrest warrant for the subject. He was arrested on June 12, 2001 on charges of filing a fraudulent insurance claim and filing a false police report.

LYNNFIELD- The owner of a Lynnfield construction company was in a car accident on December 24, 1997 that caused a head injury and cardiac problems. The subject claimed that he had been subcontracting pile-driving and heavy construction work for the Central Artery and Tunnel Project when the accident occurred. Investigators determined, however, that the job site closed at noon that day and that the company had completed its subcontract work at least three weeks prior to when the accident occurred. Throughout 1998 and 1999, the subject continued to claim total disability to AIG Claim Services and subsequently told a physician that he had not worked since the original injury. Private investigators conducted a surveillance of the subject and discovered that he had been working for a construction company at least as early as July or August 1999.

Charles Appley pled guilty to workers’ compensation fraud on June 21, 2001 in Boston Municipal Court. He was placed on one year probation and ordered to pay a $1,000 fine. The judge did not order restitution because the Department of Industrial Accidents has already imposed over $22,000 in costs against Appley as restitution to the insurer.

MALDEN- A Malden woman filed a workers’ compensation claim after an alleged injury in September 1999 while she was working as an ironworker on the Central Artery and Tunnel Project. After reporting that she hurt her back when she lifted a steel rod, the subject began collecting $500 per week in benefits from AIG. In May 2000 the woman told a doctor that she was not working and was unable to work because of severe lower back symptoms attributed to her back injury. While riding on an MBTA train, she struck up a conversation with an individual and told him that she was working under the table while collecting benefits. Unbeknownst to the woman, the individual was one of the private investigators who were checking her daily activities. The investigator later followed the woman to a worksite in Cambridge where she was doing demolition and clean-up during a renovation of a house. Her employer confirmed that she was working and that she got paid in cash.

BOSTON- A subject submitted a total disability claim in July 1999 to AIG stemming from a jackhammer injury sustained to his arm while working on the Central Artery/Tunnel Project. The subject moved to Minnesota and had surgery on his arm in August 1999. Insurance investigators later documented the subject using a power hose to wash cars at a car wash company at a time he continued to collect total disability payments of $626.20 per week. The day after investigators observed the subject at the car wash, he informed a doctor that he was in pain and unable to work and that his arm was very weak. He also stated on an EER that he had received no earnings from employment. However, records from his employer showed that he returned to work in February 2000.

Robert Houston pled guilty to charges of workers’ compensation fraud and larceny on October 18, 2001 in Boston Municipal Court. He was placed on probation for one year and ordered to pay $10,000 in restitution. Houston voluntarily returned to Massachusetts to face charges.

BOSTON- Three former employees of the Central Artery and Tunnel Project were each charged with workers’ compensation fraud and larceny on September 24, 2001 in Boston Municipal Court. A Cambridge man claimed that he had sustained a shoulder injury while employed as a subcontractor for the CAT project in November 2000. He collected $788 per week in disability benefits. In April 2001, investigators discovered that he was working while claiming to be disabled. A West Roxbury man claimed that he had sustained a shoulder injury while employed as a carpenter for the CAT project. He collected about $700 per week. Investigators discovered the man working as a carpenter and renovating a house in April 2001 while receiving disability benefits. A Wareham man claimed that he hurt his lower back while doing excavation and digging work. He collected benefits from May 2000 to September 2000 when investigators observed him working for a landscape company while continuing to collect disability benefits.

TAUNTON- While employed as a residential counselor at a treatment facility, a Taunton man allegedly suffered a low back injury after a resident pushed him against a wall. The subject began receiving temporary total workers’ compensation benefits from Arbella Mutual Insurance Company. Seven days after the subject’s alleged injury, he accepted a new position, allegedly using a different name and social security number, and failed to disclose his employment to Arbella.

DENNISPORT- A Dennisport resident reported to Dorchester Mutual Insurance Company, his landlord’s insurer, that he fell on the front stoop of a winter rental he and his girlfriend shared in Hyannis. The subject claimed he was hurt because the front steps were unsafe. However, the insurer later discovered that the subject actually injured his knee when he jumped over a wall while being pursued by police officers for an unrelated offense

Leno Mendes III pled guilty to two counts of insurance fraud in Dedham District Court on July 30, 2001. He was ordered to serve 309 days in jail plus two years supervised probation. The IFB investigated the case with the assistance of the Barnstable Police Department. Assistant Attorney General John A. Curseaden of the AG’s Insurance and Unemployment Fraud Division prosecuted the case.

DORCHESTER- A Dorchester man allegedly sustained a work-related injury in which he suffered sulfuric acid burns on his thighs and groin area. The subject claimed that the seat belt locking mechanism on the rig he was operating contained the sulfuric acid and exploded on his body. Hartford Accident & Indemnity paid him more than $21,600 in workers’ compensation benefits and more than $6,300 in temporary total disability benefits. A subsequent chemical analysis of the seat belt determined that there was little or no sulfuric acid present. Past medical documentation also indicated that the subject had previously sought treatment for several different skin problems and acid burns.

Complaints were issued against a Dorchester man on June 25, 2001 in Framingham District Court on charges of workers’ compensation fraud, insurance fraud and larceny. An Assistant Attorney General of the AG’s Insurance and Unemployment Fraud Division is prosecuting the case.

Springfield Woman Continues to Collect While Working

SPRINGFIELD- A Springfield woman injured her leg and back while working for Baystate Medical Center. She allegedly failed to report to their insurer that she was working full-time for another company while she continued to collect benefits. The subject allegedly collected about $11,849 in benefits from May 1994 to September 1995.

On September 25, 2001 in Springfield District Court complaints were issued against a Springfield woman on charges of workers’ compensation fraud and larceny. Assistant Attorney General John Talbot, Jr. of the AG’s Insurance and Unemployment Fraud Division is prosecuting the case.

“Cut Fuel Line Cause of Accident” Case Update

BOSTON- Two employees, after learning that their work hours would be cut while working as delivery help for a Hyde Park rental company, drove the company van into a tree so they could claim that they were injured in the accident. They notified their employer that the accident had resulted from brake failure. Both men claimed they were unable to work due to injuries they sustained in the accident. However, after inspecting the defective brake system, it was determined that the brake line had been deliberately cut with a knife or razor after the collision.

Nicholson Cantave and Sherard Coleman pled guilty to charges of malicious damage of property, attempted larceny and workers’ compensation fraud. They were both sentenced to three years supervised probation and ordered to pay $5,000 restitution and complete a community service program. The case was investigated by the IFB and Officer Brian Dunn of the Boston Police Department. Assistant District Attorney John L. Ciardi of the Suffolk County District Attorney’s Office prosecuted the case.

SPENCER- In 1995, a Spencer man was injured while working at a Cumberland Farms warehouse. While collecting workers’ compensation benefits from National Union Fire Insurance Company, the subject under-reported his earnings from a second job in a scheme to receive higher benefits. He reported that he was working only part-time at an automobile dealership, earning just $85 per week. Investigators found the subject working full-time at the automobile dealership and earning up to three times the amount he had reported.

Stanley Davis pled guilty to workers’ compensation fraud and larceny in East Brookfield District Court on October 29, 2001. He was sentenced to 18 months in the House of Correction, suspended for three years with probation. Davis was also ordered to perform 150 hours of community service and to pay restitution of $15,000. Assistant Attorney General John Talbot, Jr. of the AG’s Insurance and Unemployment Fraud Division prosecuted the case.

HYDE PARK- A Hyde Park man began work as a truck driver in 1997. In May 1998, he started a second job as a bus driver. In June 1998 the subject allegedly reported to his first employer that he slipped in his truck and dislocated his shoulder. He began collecting weekly benefits from Reliance National Insurance Company. An investigation revealed that the subject never stopped working at his second job throughout the time he was alleging disability.

A Hyde Park man was charged with workers’ compensation fraud and larceny on October 26, 2001 in West Roxbury District Court. Assistant District Attorney John L. Ciardi of the Suffolk County District Attorney’s Office is prosecuting the case.

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WARE- A Ware man attained a loan in 1995 which consolidated his debt on three previously held loans. At the same time, he bought credit disability insurance from Minnesota Life Insurance Company. Under the policy, the subject could have the insurance company make his loan payments if he became totally disabled because of sickness or injury. In 1996, the subject allegedly claimed to Minnesota Life that he was totally disabled and could not work. Based on his alleged claim, the insurance company paid about $16,209 on his loans over a three year period. However, the subject allegedly did not notify Minnesota Life that he began to work during his alleged disability and he continued to verbally and in written statements tell the insurer that he was totally disabled and unable to work. As a result of the alleged fraud, the insurer paid the subject an additional $9,885 in disability benefits.

A Ware man was arraigned in Ware District Court on July 23, 2001 on charges of insurance fraud and larceny. Assistant Attorney General John Talbot, Jr. of the AG’s Insurance and Unemployment Fraud Division is prosecuting the case.

Insurance Fraud Fits This Subject Like a Glove

BOSTON- The owner of a glove manufacturing company sold the company in 1997. As part of the sales agreement, the new owner agreed to pay the subject $10,000 per month as a consultant. After acquiring the company, however, the new owners discovered evidence that the subject allegedly had been involved in financial irregularities and the consulting agreement was terminated. Without regular income, the subject filed disability insurance claims under six private disability policies he had purchased over the years claiming that he had injured his left shoulder and arm and could no longer perform the physical tasks demanded of him as a consultant. The subject collected more than $23,000. Unum Provident Insurance Company conducted an investigation and discovered that the subject had not been working when he claimed he was disabled.

A Boston man was indicted on charges of insurance fraud and larceny in Suffolk Superior Court on August 1, 2001. Assistant District Attorney John L. Ciardi of Suffolk County District Attorney Ralph C. Martin’s office is prosecuting the case.

WINTHROP- A Winthrop man was doing contract work at Logan Airport. Four days after the contract ended, the subject claimed he fell down the stairs when he came home from work. He filed claims against four insurance policies he had purchased and allegedly told the insurers that he could no longer work because of his injury. The subject allegedly neglected to inform the insurance companies that his contract had ended four days before his accident. An investigation by one of the insurers revealed that the forms the subject provided contained alleged false information and forged signatures of his doctor and employer. He also continued to submit disability insurance forms even after his doctor stopped treating him. The subject received approximately $15,000 in payments after he began using false documentation in support of his claims. The insurers involved are American Heritage Life, Colorado Bankers Life, Pennsylvania Life and Mutual of Omaha Insurance Companies.

A Winthrop man was charged with four counts each of insurance fraud and larceny on October 23, 2001 in East Boston District Court. Assistant District Attorney John L. Ciardi of the Suffolk County District Attorney’s office is prosecuting the case.

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Premium Fraud

WOBURN- Between 1992 and 1997, Paul Buonopane and Robert Buonopane, owners of B&B Acoustical Contractors, Inc., conducted an under the table wages scheme in which approximately $460,000 in payroll was concealed from the company’s payroll service, the Internal Revenue Service, the company’s workers’ compensation insurance carriers and the Massachusetts Carpenters’ Union. This saved substantial amounts of employment taxes, insurance premiums and contributions to the union fringe benefits funds which B&B owed. The pair was found guilty in U.S. District Court on February 16, 2001 after a six-week jury trial. On June 15, 2001, Paul Buonopane was sentenced to one year and one day in prison, to be followed by two years supervised release. Robert Buonopane was sentenced to one year and two months in prison, to be followed by two years of supervised release. Both men were also ordered to pay $538,438 in restitution to the Union, insurance companies and the IRS. The case was investigated by Special Agents of the U.S. Internal Revenue Service’s Criminal Investigation Division, the Department of Labor Office of Labor Racketeering, and the IFB. The case was prosecuted by Trial Attorneys Steven Ward and Peter Hardy of the Department of Justice, Tax Division.

STONEHAM- Joseph C. Mazzola pled guilty to conspiracy to obstruct an IRS audit and conspiracy to defraud the state workers’ compensation insurance system in U.S. District Court on August 14, 2001. The Information to which Mazzola pled guilty charged that two family businesses run by Mazzola paid employees “under the table” to avoid federal taxes the companies owed. During an IRS audit phony documents were created to make it appear that money paid to Mazzola’s father was for “consulting fees.” Suppliers were also contacted to create phony sales invoices and to sign false statements which the companies submitted to the IRS auditor. Documents were destroyed to prevent the auditor from reviewing unreported company income as well. Additionally, the risk category and salaries of employees were misrepresented to workers’ compensation insurance companies in order to avoid insurance premiums. Mazzola is scheduled for sentencing in November 2001.

In February 2001 Robert R. Flood pled guilty to obstruction of an IRS audit. He was placed on two years probation. Flood produced false documents for the purpose of assisting two Stoneham companies to defraud the IRS. The owner and operators of the companies asked Flood to create phony sales invoices and to sign false statements which the companies submitted to the IRS during an audit of the companies for tax years 1993-95.

Trials for other subjects in the case are pending.

SAUGUS- A Saugus man, president of Malden and Saugus companies, allegedly orchestrated a scheme to defraud Cigna Property and Casualty Insurance Company by utilizing a pattern of deception involving hidden payroll and misclassification to lower workers’ compensation premiums. Premium allegedly evaded is approximately $175,000. In addition, the subject allegedly procured no workers’ compensation insurance for the Malden company in 1996.

A Saugus man was arraigned in Middlesex Superior Court on six counts of workers’ compensation insurance fraud, five counts of larceny and one count of failure to provide workers’ compensation insurance on October 12, 2001. Assistant District Attorney Andrew Rainer of Middlesex District Attorney Martha Coakley’s Office is prosecuting the case.

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Agent Fraud

Former Claims Adjuster Admits to Fraud

QUINCY- A former CNA Insurance Company claims adjuster, while issuing electronic settlement checks for valid motor vehicle claims, also cut six fraudulent checks between November 1999 and September 2000. After mailing the checks to her own home, the former adjuster deposited five of the checks, worth $3,345, in her own bank account. She did not cash the sixth check, worth $810, because her scheme was discovered by CNA’s Special Investigations Unit.

Patricia Sullivan admitted to sufficient facts on charges of larceny and attempted larceny in Quincy District Court on August 8, 2001. Her case was continued without a finding for one year. She was ordered to pay $3,345 in restitution. Former Assistant Attorney General Rafael Garcia of the AG’s Insurance and Unemployment Fraud Division prosecuted the case.

EAST LONGMEADOW- In his capacity as an insurance agent, a East Longmeadow man stole more than $15,000 from two clients. In 1996, the clients paid this former insurance agent to buy new policies on their behalf. Instead of using the money to buy the policies, he deposited the money into his business account for his own use. When confronted by one of the victims about the missing money, the former agent began paying back the client.

Armand Arce pled guilty in Springfield District Court to one count of larceny and one count of broker embezzlement on August 28, 2001. He was sentenced to 60 days in the House of Correction, suspended for two years with probation, and ordered to pay $5,550 restitution. Arce pled guilty to seven counts of larceny for a similar scheme in 1998. He was then ordered to pay restitution of $31,000. These additional charges stem from that initial investigation. Assistant Attorney General John Talbot, Jr. of the AG’s Insurance and Unemployment Fraud Division prosecuted the case.

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ROSLINDALE- A Roslindale man reported to Amica Mutual Insurance Company that his vehicle was damaged in a hit-and-run accident. He received money for the damages, which he certified had been repaired by an auto body shop. The Roslindale man subsequently reported to Amica a nearly identical accident involving the same vehicle. He allegedly collected $2,419 for the second accident. During the course of its investigation, the insurer and an accident reconstructionist determined that the damages allegedly sustained in the previous accident were never repaired. The reconstructionist also concluded that the damages reported from the second accident could not have occurred as reported.

A Roslindale man was arraigned on charges of filing a false motor vehicle insurance claim and larceny in Dedham District Court on July 31, 2001. An Assistant Attorney General of Attorney General Tom Reilly’s Insurance and Unemployment Fraud Division is prosecuting the case.

An Accident Waiting to Happen

BROCKTON- A Brockton man was injured in auto accidents in Fall River, New Bedford and Brockton. Following each accident, he allegedly filed fraudulent personal injury and bodily injury claims with four insurance companies, Trust, Commerce, Commercial Union and Liberty Mutual Insurance Companies. The subject allegedly knowingly concealed information about his prior medical and accident history from his doctors and chiropractors, resulting in false statements by the medical providers to the insurance companies. As a result of the subject’s claims, he was paid a combined total of $8,863 in personal injury benefits and $10,750 in bodily injury benefits.

EAST BOSTON- The owner of an East Boston auto body shop filed multiple motor vehicle insurance claims for damage to her vehicles, which occurred either while the car was parked or in accidents that never occurred. Her brother reported, in one claim, that his Cadillac was hit by a pick-up truck with a snowplow hitch on the front, driven by a third subject. The Cadillac was inspected by the auto body shop and an appraiser determined the cost of repairs to be $8,275. However, an accident reconstruction expert inspected both vehicles and determined that the accident did not happen as claimed. In addition, the sister and brother also submitted fictitious claims for reimbursements for rental cars they claimed to have used while their cars were being repaired. However, the owner submitted rental contracts for an agency that did not exist. A fourth subject also used the name of the phony rental company in a rental claim he filed.

BROCKTON- A Brockton woman allegedly attempted to repeatedly collect benefits for the same damage to her tire in three claims with Commerce Insurance Company. Commerce paid the woman $1,092 for damage that she claimed occurred in a 1998 motor vehicle accident. Commerce had already paid the woman for this tire damage in a previous vandalism claim filed in 1997. The woman allegedly then submitted the same receipt a second time, in a subsequent 1998 motor vehicle claim, attempting to again receive benefits for the same tire damage. Commerce allegedly became suspicious when it recognized the receipt and denied the new claim.

DORCHESTER- In 1998, a Dorchester woman was injured in a car accident. She subsequently filed a claim with her insurer, Liberty Mutual Insurance Company, and falsely stated that she was employed at the Department of Employment and Training (DET) at the time of her accident. She sought lost wage benefits because she was disabled after the accident. An investigation revealed that the woman was never employed at DET, but her mother is a DET employee. The mother allegedly conspired with her daughter to collect benefits by submitting a fraudulent wage verification to the insurer stating that her daughter was a DET employee at the time of her accident and that she was unable to work as a result. Based on the insurance claim and the wage verification, the daughter collected about $2,415 in lost wage benefits.

A Dorchester mother and daughter were arraigned on July 31, 2001 in Hingham District Court on charges of motor vehicle insurance fraud, larceny, and conspiracy to commit both motor vehicle insurance fraud and larceny. Assistant Attorney General David B. Andrews of the AG’s Insurance and Unemployment Fraud Division is prosecuting the case.

Correction: In the May 2001 issue of focusFraud it was inaccurately reported in the “Superhuman Fraudster!” Case Update story (page 7) that Lumber Mutual Insurance Company awarded $8,500 to the subject for his BI claim. The BI settlement was paid by Liberty Mutual Insurance Company. Lumber Mutual denied the PIP claim.

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Life Insurance Fraud

WORCESTER- On October 2, 2001 in U.S. District Court, Darrin J. Stafford was sentenced to five years and ten months’ imprisonment for his scheme to defraud insurance companies and investors out of hundreds of thousands of dollars in connection with Stafford’s fraudulently obtaining and/or selling life insurance policies through so-called “viatical settlements.” Stafford had pled guilty in November 2000 in U.S. District Court to six counts of mail fraud and five counts of money laundering. Stafford, diagnosed with AIDS in approximately 1995, devised a scheme to fraudulently abuse the viatical settlement process of life insurance policies which resulted in approximately $550,000 in illegally gained funds.

The case was investigated by the Federal Bureau of Investigation and the Insurance Fraud Bureau. It was prosecuted by Assistant U.S. Attorneys Lori J. Holik and Jennifer C. Boal of United States Attorney Michael J. Sullivan’s Economic Crimes Unit. [For additional details on this story, see November 2000 and May 2001 issues of focusFraud.]

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SOUTH BOSTON- A South Boston man claimed to have an unwitnessed fall while working as a management trainee at a Bertucci’s Restaurant training facility in Boston. He claimed the fall left him totally disabled and began collecting workers’ compensation payments from AIG Group. While still collecting benefits, the subject allegedly began working at a company which constructs trade show exhibits. The following month he allegedly began another job as a bouncer at a Framingham pub. Insurance investigators using surveillance cameras taped the subject working at the pub and also taped him bench pressing about 200 pounds and doing deep knee bends at a South Boston athletic club at the time he was claiming total disability and collecting insurance payments. In all, the subject collected $9,000 in workers’ compensation payments and $23,000 in insurance disability payments under a private policy with The Provident Insurance Company taken out by the subject about two months before his alleged fall at Bertucci’s.

A South Boston man was indicted in Suffolk Superior Court on June 6, 2001 on charges of workers’ compensation fraud, disability insurance fraud and larceny. Assistant District Attorney John L. Ciardi of the special prosecution unit in Suffolk County District Attorney Ralph C. Martin’s office is prosecuting the case.

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You’re Running Out of Time to Register for the

Presentations by:

Administrative Law Judge from Department of Industrial Accidents

Assistant General Counsel from Department of Industrial Accidents

Attorney from Liberty Mutual Insurance Company

Representative from the State Workers’ Compensation Bureau

Licensed Private Investigator

Prosecutors from the Insurance and Unemployment Fraud Division of the Office of Attorney General Tom Reilly

PLUS!

Mock Independent Medical Evaluation by an IME physician

 

DATE: Friday, November 30, 2001

TIME: 8:15 a.m. - 3:15 p.m. (registration 7:30 - 8:15)

LOCATION: Lantana
43 Scanlon Drive
Randolph, MA 02368
(781) 961-4660

PRICE: $45.00 per person (includes buffet lunch)

REGISTRATION: Registration form, with payment, must be

received by Wednesday, November 21, 2001.

Please use the Registration Form found on the back page of this newsletter.

For further information, contact Deborah Terry

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Send in your registration form and check today!

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