FIVE YEAR ANNIVERSARY EDITION
Volume 3, Number 2 September 1996
Celebrate with the IFB!
In observance of the IFB's fifth anniversary, this issue of focusFraud
is devoted to acknowledge the first years and to highlight some significant
and special interest stories involving the IFB. Since the IFB did not begin
in June 1994 with the initial publication of focusFraud, we want to
pass on some other milestones achieved by the IFB that may not have appeared
in previous issues.
The IFB extends a special thank you to ...Massachusetts Attorney General
Scott Harshbarger and his staff; the Massachusetts State Police and law
enforcement agencies around the Commonwealth; U.S. Attorney Donald Stern
of the Boston Office and his staff; the FBI and other federal
law enforcement agencies; and the insurance companies
of Massachusetts ... for their sincere dedication to helping us fight insurance
fraud. Without them, our five years of success would be but wishful
thinking!
| Convictions | 156 |
| Individuals Indicted | 142 |
| Complaints Issued | 172 |
| Cases Referred for Prosecution | 321 |
Message from the Executive Director
It doesn't seem that long ago when nine newly hired Insurance Fraud Bureau
(IFB) personnel, lacking their own quarters, gathered in the Automobile Insurers
Bureau conference room to meet for the first time - that historic morning
in May was over five years ago. In a short span of time the IFB has built
a reputation for excellence that is known not only throughout Massachusetts,
but nationally and internationally as well. The IFB has been visited or contacted
by representatives from well over a dozen states and three nations inquiring
about how the IFB does business--from creation to day-to-day procedures to
the prosecution of insurance fraud investigations. IFB staff members are
in demand as speakers at industry conferences held throughout the country.
IFB representatives have appeared on local, state and national news shows
and radio broadcasts.
Vast changes have taken place at the IFB over the past five years. Staff
has grown from nine employees to 43 today, including an investigative staff
of 28. We are fortunate to have a combination of skills, backgrounds, experiences
and personalities that blend effectively in accomplishing the IFB mission.
In addition, the enthusiasm every individual brings to his/her job each day
has not diminished in the past five years. Congratulations from IFB peers
are as heartfelt for a conviction of a single jump-in case as it is for a
conviction of a prominent chiropractor or a multi-million dollar premium
evasion case. Excitement continues to run through the IFB with the announcement
of each new indictment rendered, complaint issued, and conviction achieved.
The success of the IFB does not come without help. The cooperation and support
received from insurance carriers, the assistance provided by the Commonwealth's
prosecutors and aid by government agencies is essential in the fight against
insurance fraud. More than two dozen prosecutors from the offices of Attorney
General Scott Harshbarger, the district attorneys and U.S. Attorney Donald
Stern have tried cases in which IFB has provided investigative support. Together
we have succeeded in initiating court activity against medical providers,
attorneys, insurance personnel and consumers.
The IFB has also played a significant role in lowering insurance premiums
for consumers. Annual automobile rates have decreased in the Commonwealth
for the past two years and workers' compensation rates have dropped each
of the past three years. These rate reductions, while not exclusively attributed
to fighting fraud, have saved insureds in excess of one-half billion dollars.
Insurance fraud is a crime and together we are making a difference in the
way the people in Massachusetts view this offense. The IFB looks forward
to continuing to fulfill its mission to detect and deter insurance fraud
in the Commonwealth.
Daniel J. Johnston, Executive Director
Insurance Fraud Bureau Celebrates Five Years in Print!
To commemorate the bureau's first five years, headlines from articles that
appeared in trade and industry publications and local and regional newspapers
that reported on court activity of individuals in which the IFB provided
the investigative labor were collected. A collage of the most significant
news stories was created to chronicle the IFB's role in combating insurance
fraud over the past five years. The IFB looks back with pride on what has
been accomplished thus far and looks to the future to continue the fight
against insurance fraud.
Automobile
Highlights
First IFB Sting Operation
EVERETT- Sentry Insurance contacted the IFB when Ernest DiOrio,
the owner of an Everett trucking company, offered an appraiser $500 to exaggerate
the estimate of damage to his truck. In June 1993, an undercover Massachusetts
State Police officer, working with the IFB, posed as a claims adjuster. DiOrio
offered the trooper $1,000 to write an estimate for more extensive damages
to his truck. DiOrio pled guilty to attempted larceny in Malden District
Court in November 1993. He was sentenced to probation and fined $2,500.
Former Claims Adjuster Sentenced to State Prison
DORCHESTER- William Edge, a former Liberty Mutual senior claims adjuster,
pled guilty to 26 counts of making false entries in corporate books and 26
counts of larceny in Suffolk Superior Court in June 1993. Edge was sentenced
to three and one half to five years in state prison. From September 1990
to January 1992, Edge issued checks, totalling more than $46,000, to fictitious
claimants and kept the proceeds for himself. Ten other subjects were convicted
as co-conspirators in this case. Two subjects were sentenced to state prison,
four received suspended sentences and four were placed on probation.
Staged Accident Results In Murder Convictions
SPRINGFIELD- An uncle and his nephew planned an automobile collision
accident so they could claim phony injuries and collect insurance proceeds
from Republic Western Insurance Company. The staged accident resulted in
the death of a 70-year-old man. The Hampden County District Attorney contacted
the IFB for assistance in investigating the insurance fraud plot. The men
were found guilty of second degree murder in Hampden Superior Court in June
1994. They are currently serving mandatory terms of life in prison.
Oxford Attorney Pleads Guilty to Insurance Fraud
OXFORD- Vaughn Zanoni pled guilty to charges of insurance fraud
and larceny in Worcester Superior Court in May 1994. He was sentenced to
probation, 500 hours of community service, restitution of $5,000 to USF&G
Insurance Company and was ordered to surrender his license to practice law.
Zanoni submitted fraudulent wage verification statements to insurance companies
in connection with two separate motor vehicle accident insurance claims.
If It Ain't Broke, Don't Fix It!
FRAMINGHAM- A Framingham body shop, the owner and some of his employees
conspired to defraud Liberty Mutual, Commercial Union and Amica Insurance
Companies. In June 1996 in Framingham District Court, Tofani Collision
was convicted of motor vehicle insurance fraud and larceny. The body shop
was ordered to pay $15,120 in fines. A notice of the conviction was sent
to the Division of Insurance and the Automobile Repair Shop Licensing Board.
Owner Patrick Tofani pled guilty to similar charges. He was sentenced
to serve 90 days in the House of Correction and to pay $13,259 in fines.
Scams included inflating repair estimates to cover customer deductibles,
not replacing parts represented as replaced, adding damages to motor vehicles
brought to the shop before insurers could appraise the damage and staging
accidents for willing customers. Trials for other subjects in the case are
pending.
Former Insurance Appraiser Indicted
FRAMINGHAM- Christopher Kalogeropoulos, owner of Euro-Tech
Auto Body, pled guilty to multiple counts of insurance fraud-related
charges in Essex Superior Court. He was sentenced to serve 90 days in the
House of Correction, to pay $25,000 restitution and to perform 100 hours
of community service. He was also ordered to write a formal signed letter
to all licensed body shops about what insurance fraud has done to his life
and his business. Hercules Kalogeropoulos, Christopher's twin brother,
pled guilty to insurance fraud charges in Essex Superior Court for his
participation in staging two motor vehicle accidents with his 1985 Mercedes.
He was sentenced to two concurrent 3-5 year prison sentences, suspended,
and ordered to pay $7,000 restitution and to perform 300 hours of community
service. The brothers are two subjects in a case that involves a former Hanover
Insurance Company in-house appraiser who allegedly participated in schemes
to defraud the carrier by staging accidents and using altered invoices, car
rental receipts and phony photographs. Trials are pending for the former
appraiser and six other subjects.
Premium Avoidance Highlights
Workers' Compensation Highlights
Brockton Man Guilty of W/C Fraud
BROCKTON- David Field pled guilty to insurance fraud and larceny
in Norfolk Superior Court on July 30, 1996. He was sentenced to serve six
months in the House of Correction, four years probation, to pay $8,000
restitution to Travelers Insurance Company and to perform 1,000 hours community
service. Field was injured at a construction site while working as a sheet
metal worker and began to receive $383 per week in total disability workers'
compensation benefits. Investigation revealed that during a portion of the
time that he was collecting these benefits, Field ran his own business, known
as Air-Temp, Inc., and installed residential air conditioning units.
Oh, Brother!
SALISBURY- Sean DiPietro pled guilty to insurance fraud, workers'
compensation fraud and larceny in Middlesex Superior Court in July 1995.
He was sentenced to serve one year in the House of Correction and ordered
to pay $31,879 in restitution to American Policyholders Insurance Company.
DiPietro claimed to be disabled due to a work-related injury. However, he
worked full-time in three separate jobs. He used his brother's identity to
avoid detection.
Alarm Sounds on Subject
WORCESTER- Joaquin Ortiz was found guilty in April 1995 on
three counts of workers' compensation fraud in Worcester Superior Court and
was sentenced to 3-5 years on and after a term he is currently serving in
state prison. Ortiz filed a workers' compensation claim declaring he sustained
a work-related injury while employed by a burglar alarm company. Investigation
determined that Ortiz was never an employee of the company but was a friend
of the owner's stepson. When the stepson lost his driver's license, Ortiz
drove him to job sites.
Other Lines Highlights
Insurance Claim Goes Up in Smoke
BOSTON- In a case that was picked up on Paul Harvey's national radio
broadcast, Shaun Smoker of New Hampshire pled guilty to insurance
fraud, larceny and attempted larceny in Suffolk Superior Court in November
1992. Dubbed "Smoker the Choker" by a local radio station, Smoker staged
a series of choking accidents at various restaurants where he claimed to
have cut his throat on glass that he had swallowed and that he claimed was
in his food. Smoker was sentenced to serve nine months and to pay restitution.
Spouse Comes Back to Life
FALL RIVER- Samson Omosefunmi was found guilty of insurance fraud,
attempted larceny and conspiracy in Suffolk Superior Court in June 1994 and
was sentenced to two and a half years in state prison. Omosefunmi attempted
to collect on a fraudulent life insurance policy claim worth $134,000 in
connection with the false claim that his wife died. He bought the policy
from Credit Life Insurance Company. His wife is alive and lives in Nigeria.
Did You Know ???