Convictions - 90
In this edition you will read about Alan S. Rosenthal, the celebrated
Boston chiropractor, who on April 18th pled guilty, waiving his
rights to a trial at federal court in Boston. Rosenthal had been
indicted on multiple counts of fraud in September 1994.
Rosenthal pled guilty to 30 counts of mail fraud, agreed to serve
15 months of incarceration in a federal penitentiary, and agreed
to fines and restitution of nearly $450,000. His wife, Caterina,
pled guilty to one count of mail fraud, accepting a lesser sentence.
In the courtroom, Judge Richard G. Stearns first asked Assistant
United States Attorneys Brien O'Conner and Paul Levenson to articulate
the nature of the Rosenthals' crimes. To ensure that the defendants'
waiver of trial was a decision made knowingly and voluntarily,
Alan S. Rosenthal was asked whether he had committed the acts
outlined by prosecutors. Rosenthal admitted to engaging in schemes
and artifices to defraud insurance companies. Prosecutors allege
the schemes were perpetrated by utilizing final reports claiming
total disability on auto and workers' compensation cases when
the individual was determined by chiropractors in his employ not
to be disabled and by engaging in schemes and artifices to defraud
by utilizing specialized testing in order to increase fees generated
by the tests rather than for diagnostic purposes.
As I watched these events unfold, and as Dr. Rosenthal accepted
a federal prison sentence, I saw the latest chapter in one of
the IFB's longest and most difficult investigations come to a
close. Over two years of near full attention from one of the
IFB's investigators, and many additional months of work from others;
at times up to six FBI agents assigned to work full-time with
the Fraud Bureau on this case; investigators from other federal
agencies; and an assortment of prosecutors from the U.S. Attorney's
office in Boston, I can only assume that this kind of all-out
effort by government and industry resources could not have been
possible five years ago!
With this single conviction, medical providers should take notice
and be deterred from engaging in like activity, or engage in it
at their peril if detected and prosecuted. The final chapter
of this matter is scheduled to be heard at federal court in Boston
on July 24, 1995 at 9:30 a.m. when the "conditionally accepted"
guilty pleas of Alan and Caterina Rosenthal are anticipated to
be formally accepted by Judge Stearns and sentence should be imposed.
Insurance fraud is no longer a crime that is casually disregarded
in the Commonwealth of Massachusetts.
IFB Chief of Investigations appeared on a segment
of "60 Minutes" in March 1995 concerning a story on
insurance fraud centered around the Rosenthal case. The Insurance
Fraud Bureau of Massachusetts is internationally recognized as
a leader in combatting insurance fraud.
Poster orders should be directed to the address below. Please
state type, quantity and version (workers' compensation or insurance
fraud) on each order.
PEABODY- A Peabody man made a claim for PIP benefits and
received a wage reimbursement of $7,945 from Sentry Insurance
Company. He provided documentation illustrating he was earning
more than $1,000 per week for his PIP claim and indicated that
he was not currently collecting workers' compensation benefits.
The subject was, in fact, collecting workers' compensation benefits
at the time of the accident and had received temporary total and
partial disability benefits throughout this same time period.
On January 5, 1995, Irwin Willins pled guilty to larceny by
false pretenses in Peabody District Court. He was sentenced to
one year in the House of Corrections, suspended, restitution of
$7,945, and $1,280 in fines.
"A Picture is Worth a Thousand Words" Case Update
AGAWAM- A subject filed a claim with CNA Insurance Company
and a police report stating that his van had sustained vandalism
damage. However, investigation revealed that the van had been
towed from an intersection a week earlier. At that time, a Springfield
police officer and a security man at the tow yard reported separately
that the vehicle was heavily damaged. An inventory photograph
was also included with the appraisal which indicated extensive
damage to the van prior to the claim.
A subject pled guilty to insurance fraud on January 13, 1995
in Springfield District Court. He was sentenced to serve 30 days
in the House of Correction, concurrent with another conviction.
"Taxi Cab Foul Up" Case Update
HYDE PARK- A Hyde Park man reported to Liberty Mutual Insurance
Company that he was operating his personal vehicle when he struck
a taxicab and sustained collision damage to both vehicles. The
subject later admitted that he had been hired by the assigned
operator of the taxicab to drive the vehicle and, while operating
the vehicle, he was involved in an accident and sustained damage
to the cab. The assigned operator of the taxicab came up with
the scheme to claim that the other man's personal vehicle struck
the taxicab in order to collect insurance money.
Two subjects pled guilty to insurance fraud charges on January
25, 1995 in Dedham District Court. They were each sentenced to
one year probation, a $500 fine and restitution of $250.
"Chiropractor's Employees Forge Medical Records" Case Update
MATTAPAN- A Randolph woman and her three passengers filed
several PIP and bodily injury claims in connection with four separate
accidents. The subjects, present or former employees in a Mattapan
chiropractor's office, used their positions in the office and
their knowledge of the insurance industry to create falsified
medical treatment records in order to submit bodily injury and
lost wage claims. Insurance carriers affected in the four separate
accidents included Liberty Mutual, Safety and Hanover Insurance
Companies.
On March 22, 1995 in Suffolk County Superior Court, the principal,
Daniella Jean Pierre, pled guilty to five counts each of insurance
fraud and larceny. She was sentenced to two years in the House
of Correction, suspended, and restitution of $5,000. On March
31, 1995, two other subjects each pled guilty to insurance fraud
and larceny charges. Each was sentenced to one year in the House
of Correction, suspended, and each paid restitution of $3,000
at the time of pleading. One other subject is still awaiting
trial.
Damage? I Don't See Any Damage!
MALDEN- A subject claimed that his Corvette, in excellent
condition and without pre-existing damage, was stolen from outside
his home. However, a couple of weeks prior to the alleged theft,
police responded to a larceny in progress regarding this same
vehicle. A police report indicated the ignition was partially
destroyed, the console was damaged, the T-roof was shattered and
wires under the hood were exposed. This damage was never reported
to the subject's insurance carrier, Aetna Casualty and Surety
Insurance Company. Two weeks after this act of vandalism, the
subject reported the vehicle stolen. It was recovered the same
day as a total loss. In an EUO, the subject denied the vehicle
had any pre-existing damage, even after viewing the police report.
A complaint was issued in Malden District Court against a Malden
man on January 5, 1995 on charges of insurance fraud and attempted
larceny.
Malden Man Claims Similar Injuries
MALDEN- A Malden man was employed as a subcontractor for
a cab company when he allegedly collided his taxi with a tree.
He claimed injuries and applied for PIP benefits. He retained
an attorney to represent him for the claim. The subject was also
involved in a two car collision about seven months previous to
this incident. He filed a PIP claim for the first accident only
two weeks prior to the application for PIP benefits for the second
accident and retained a different attorney for this accident claim.
The carriers, Royal and American Transportation, discovered
the subject's claim history through the Central Index Bureau and
learned that many of his claimed injuries were similar.
A complaint was issued against a subject on counts of insurance
fraud and attempted larceny in Malden District Court on January
12, 1995.
Where Were You When ...
LEOMINSTER- A Leominster man is alleged to have fabricated
an automobile theft claim to Liberty Mutual Insurance Company
to hide the fact that he was involved in a collision in early
morning hours when he was only licensed to operate his vehicle
from 6:00 a.m. to 6:00 p.m. An inspection of the subject's vehicle
showed that the ignition was not defeated and there were no other
signs of forced entry. Additionally, he reported the vehicle
missing about eight hours after the automobile was recovered with
extensive damage in another jurisdiction. The subject admitted
to an IFB investigator that he had reported the theft in "error"
and that he had actually backed the vehicle into a pole after
he was involved in an accident with a drunk.
A complaint was issued against a subject on charges of insurance
fraud, attempted larceny and filing a false report of a crime
in Leominster District Court on January 31, 1995.
Claims Bonanza
REVERE- An alleged organized ring comprised of two principals
and another subject made multiple interrelated claims against
various automobile, life and disability carriers. The principals
used two basic scenarios which they adapted and repeated to maintain
a steady income for themselves. One scenario involved one subject
who would be the sole occupant in his vehicle and would claim
to be struck by a phantom vehicle. He would then claim medical
payments, lost wages, and pain and suffering. The subjects also
pursued alleged disability claims on policies obtained through
the financing of their motor vehicles and life insurance disability
claims for injuries arising from the staged car accidents.
On February 1, 1995, indictments were issued against three
subjects on insurance fraud, larceny and perjury charges in Middlesex
Superior Court. Additionally, one of the subjects was also indicted
on eight counts of insurance fraud and 11 counts of larceny in
Suffolk Superior Court on April 21, 1995.
"If It Ain't Broke Don't Fix It!"
FRAMINGHAM- A Framingham body shop, the owner and some
of his employees allegedly defrauded Massachusetts insurance companies
by inflating or exaggerating automobile claims. Some of the charges
alleged against the subjects include: routinely inflating repair
estimates to cover customer deductibles, inflicting additional
damage to vehicles that were at the auto body shop for repairs,
not replacing parts represented as replaced, replacing undamaged
auto parts with damaged parts prior to insurance adjuster appraisals
and staging auto collision accidents.
On February 10, 1995 in Framingham District Court, complaints
were issued against four individuals and an auto body shop on
a total of 73 counts of insurance fraud and larceny.
Employer Fights Back
PLYMOUTH- A Plymouth man allegedly submitted a false lost
wage statement in support of a PIP claim. The subject had been
operating his motorcycle when he was struck by an automobile.
He subsequently filed a claim with his insurance carrier, Aetna
Casualty and Surety Insurance Company, for lost wages. However,
the subject's employer contacted the IFB through the hotline to
notify us that the subject had stolen company stationery. The
owner alleges that the subject had forged his signature on a letter
which alleges that the subject had missed a longer period of time
from work and that he was also earning a larger salary.
A complaint was issued against a Plymouth man on insurance
fraud, larceny, forgery and uttering charges in Worcester District
Court on March 7, 1995.
Have We Met Before?
BRIGHTON- Five subjects allegedly staged a two car collision
and claimed injuries. An accident reconstructionist, however,
reported that there was no evidence of a reciprocal collision.
Additionally, numerous inconsistencies were found in the testimonies
of the participants. Both vehicle operators claimed not to know
each other although they had worked together for the same supervisor
for a two year period. Other subjects who claimed to be in the
vehicles were found to be at work when the alleged auto accident
occurred. The carriers that covered the two vehicles were Amica
Mutual and Commerce Insurance Companies.
Complaints were issued against five subjects on charges of
insurance fraud, larceny and conspiracy on a total of 24 counts
in Dudley and Dedham District Counts in March 1995.
Like Father, Like Son
SEEKONK- A Seekonk business owner reported the alleged
theft of his company-owned BMW, office equipment and tools.
He allegedly concealed the items and collected more than $29,000
in insurance from Hanover Insurance Company. His son allegedly
staged a theft of a family-owned BMW and collected $13,000 in
insurance money.
Indictments were issued against a father and son on insurance
fraud charges in Bristol Superior Court on March 20, 1995. The
father was charged with one count each of removing or concealing
a motor vehicle to defraud an insurer and perjury alleging motor
vehicle theft plus two counts each of insurance fraud and larceny.
His son was charged with one count each of removing or concealing
a motor vehicle, receiving a stolen motor vehicle and removing
motor vehicle identification numbers.
Former Insurance Appraiser Indicted
FRAMINGHAM- A former Hanover Insurance Company in-house
appraiser and two co-conspirators allegedly participated in schemes
to defraud the carrier by staging accidents and using altered
invoices, car rental receipts and phony photographs. Many of
the photographs submitted by the appraiser were of different automobiles
than listed in the claim. The owner of a Raynham auto body shop
aided in the schemes. The owner used multiple identities to
further the fraud.
A former insurance appraiser was indicted on insurance fraud
and larceny in Norfolk Superior Court on April 26, 1995. Two other
subjects were indicted on additional counts of insurance fraud
and larceny.
FRANKLIN- A Franklin man employed as a landscaper claimed
to his employer's insurer, Cigna Insurance Company, that he was
injured while transporting dirt in a wheelbarrow. Investigation
revealed that the subject began working only four days after the
disabling accident as a full-time laborer with a Rhode Island
construction company while continuing to collect disability benefits.
Stephen Rebhan pled guilty to workers' compensation fraud and
larceny in Framingham District Court on April 27, 1995. He was
sentenced to six months in the House of Correction, 30 days to
serve, and restitution of $3,307. Prior to his trial, Rebhan
had fled to West Virginia. He was picked up in that state and
held for 20 days as a fugitive from justice before being returned
to Massachusetts for trial.
"Man Confesses to DIA Judge" Case Update
SPRINGFIELD- A subject who claimed to slip, fall and injure
himself at his place of employment received total temporary disability
benefits for six months. The subject actually worked for two
different employers during the time period he collected $8,914
in workers' compensation benefits from Liberty Mutual Insurance
Company. The subject also admitted at a Department of Industrial
Accidents (DIA) hearing that he had been employed during the time
he was collecting the benefits.
The charges of insurance fraud, workers' compensation fraud
and larceny against a Springfield man were continued without a
finding in Springfield District Court on March 14, 1995. He was
sentenced to three years probation and must pay restitution of
$10,862 within the three year period.
Ice Hockey Check
SOMERVILLE- A Somerville man injured his knee in a work-related
incident. He underwent arthroscopic surgery and remained out
of work for four additional months. He testified at a DIA hearing
that his knee was still too sore after his accident and surgery
to allow him to do any strenuous physical activity. However, his
employer, August Busch, learned that the subject was playing league
ice hockey during the period of disability and obtained a videotape
of the subject playing at a local ice rink in a full contact game.
It was also discovered that while the subject was accepting disability
benefits from his employer's self-insurance workers' compensation
plan he was applying for unemployment compensation as well and
on this application denied receiving any disability benefits.
Joseph Matarese pled guilty to counts of insurance fraud and
larceny on March 23, 1995 in Boston Municipal Court. He admitted
to sufficient facts to support a finding of unemployment fraud.
Matarese was sentenced to one year in the House of Corrections,
suspended, and 100 hours of community work.
But It Didn't Feel Like Work ...
SAUGUS- A subject sustained a work-related injury, collected
temporary total workers' compensation benefits and partial disability
benefits from Travelers Insurance Company, and then received a
lump sum settlement of $7,800. IFB investigation revealed that
the subject was employed during this time and did not disclose
his earnings. He also stated during an IME that he had not worked
since the date of the accident.
A Saugus man pled guilty to three counts of workers' compensation
fraud and one count of insurance fraud on March 30, 1995 in Quincy
District Court. A larceny charge was continued without a finding.
He was sentenced to one year in the House of Corrections, suspended,
and restitution of $7,300.
Alarm Sounds on Subject
WORCESTER- A subject filed a workers' compensation claim
declaring he sustained a work-related injury while employed by
a burglar alarm company. American International Insurance Company
conducted an investigation and determined that the subject was
never employed by the company. The company's owner testified
at a DIA hearing that the subject was never an employee of his
company. However, the subject lived with the owner's stepson
for a period of time who did perform work for the company. When
the stepson lost his driver's license, the subject drove him to
job sites. The subject later claimed a work-related injury and
testified to the DIA that he was employed by the burglar alarm
company.
Joaquin Ortiz was found guilty on three counts of workers'
compensation fraud in Worcester Superior Court on April 5, 1995.
He was sentenced to 3-5 years on and after a term he is currently
serving in state prison and restitution of $3,049.
Framingham Contractor Cheats for $1 Million
FRAMINGHAM- A Framingham contractor allegedly hired workers
for five public works projects who were not classified as company
employees. As a result, the company allegedly did not pay approximately
$1 million in workers' compensation and unemployment taxes.
A construction company, its president and a subsidiary were
indicted on 33 counts in Middlesex Superior Court on March 21,
1995. The company was indicted on a total of 17 counts on charges
of failure to pay prevailing wage rates and unemployment taxes,
failure to provide true and accurate payroll records and misclassification
of employees. The subsidiary was charged on one count each of
failure to pay prevailing wage rates, failure to pay overtime
and failure to provide true and accurate payroll records. The
president was charged on a total of 13 counts of failure to pay
prevailing wage rates and unemployment taxes, failure to pay overtime,
workers' compensation premium avoidance and misclassification
of employees.
Ladders Can Be Hazardous to Your Health
WATERTOWN- A Watertown man was injured in a job-related
incident and was receiving worker's compensation benefits from
American Policyholders Insurance Company. While still collecting
benefits, he became employed as an independent painting contractor.
During one of his jobs he fell off a ladder and was treated at
a nearby hospital for another injury.
On March 2, 1995 in Malden District Court, a complaint was
issued against a subject on workers' compensation fraud and larceny.
Subject Bakes Up a Story
WORCESTER- A subject, while employed as a baker, alleged
that he sustained a work-related injury and applied for workers'
compensation benefits from Hartford Accident Insurance Company.
His employer contended that his records showed that the subject
voluntarily terminated his employment several weeks before the
alleged injury occurred.
A complaint was issued against a subject on a count each of
insurance fraud, workers' compensation fraud, attempted larceny
and corruption of a witness in Worcester District Court on April
20, 1995.
BOSTON- A Boston-area chiropractor and his wife, the executive
director of his chiropractic business, carried out a series of
schemes in order to generate additional business and to increase
their personal income by defrauding Massachusetts automobile and
workers' compensation insurance carriers.
Dr. Alan S. Rosenthal, the owner and operator of Rosenthal
Chiropractic and Rehabilitation, Inc. with clinics in Brookline
and Mattapan, pled guilty to 30 counts of mail fraud in federal
court on April 18, 1995. Caterina Rosenthal, the executive director
of the business, pled guilty to one count of mail fraud. Dr.
Rosenthal agreed to serve a 15 month sentence without parole;
two years of supervision by the U.S. Probation Department; surrender
of his Massachusetts chiropractic license and a prohibition against
his seeking a new license for 30 months; and payment of $430,000
in fines and restitution. He will be sentenced on July
24, 1995.
REVERE- A Revere man took out a life insurance policy on
his brother from Aetna Life and Surety Insurance Company for $100,000
and listed himself as sole beneficiary. The man subsequently filed
a claimant's statement for death benefits and produced two death
certificates and a burial permit to the carrier as proof of his
brother's death. The brother is, in fact, alive and well and
was unaware that a life insurance policy had been taken out in
his name by his brother and that a claim had been filed.
A Revere man pled guilty to attempted larceny in Quincy District
Court on April 28, 1995. He was sentenced to 2½ years in
the House of Correction, suspended, and restitution.
TAUNTON- A subject reported to his insurance carrier, Prudential
Insurance Company, and to police, that parts totaling $7,750 had
been stolen from his 26-foot motorboat. It was determined, however,
that the stolen property was actually ordered by the subject prior
to the reported theft and being held for him by a local repair
shop.
Gilbert Fostin pled guilty to insurance fraud and attempted
larceny in Taunton District Court on February 10, 1995. He was
sentenced to two years probation, a fine of $800 and restitution
of $500 to Prudential Insurance Company to compensate the carrier's
cost to investigate the case.
IFB Progress Report
(through May 11, 1995)
Individuals Indicted - 102
Complaints Issued - 111
Cases Referred for Prosecution - 208
A Message from the Executive Director
"60 Minutes" Good Guys!
IFB Lends a Helping Hand
Insurance Fraud Posters Available
Four separate posters with the headings "Free Set of Prints
for Insurance Fraud Cheaters", "Free Room and Board...",
"Free Photos..." and "Free Jewelry..."
are available from the IFB. A similar set is geared toward
workers' compensation fraud.
Automobile Highlights
"Peabody Man Double Dips" Case Update
Workers' Compensation Highlights
"Franklin Man Hits Paydirt" Case Update
Multi-Lines Highlights
"Chiropractor Indicted on Federal RICO Charges" Case Update
Life Highlights
"Reports of My Death are Greatly Exaggerated" Case Update
Marine Highlights
"It's All in the Timing" Case Update