The New Jersey Office of the Insurance Fraud Prosecutor

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Annual Report of

Annual Report Staff Editor Greta Gooden Brown The New Jersey Insurance Fraud Prosecutor Co-Editor John J. Smith First Assistant Insurance Fraud Prosecutor Co-Editor/Copy Editor Office of the Joan Enright Administrative Analyst Feature Writers Frank P. Brennan, Esq. John Butchko Insurance Fraud Special Assistant John Grady Deputy Attorney General, DOL William Hoyman Deputy Attorney General Prosecutor John Kennedy Assistant Attorney General for Calendar Year 2006 Lewis Korngut Supervising Deputy Attorney General John Krayniak Assistant Attorney General Submitted March 1, 2007 (Pursuant to N.J.S.A. 17:33A-24d) Scott Patterson Supervising Deputy Attorney General Ray Shaffer Administrative Liaison John J. Smith Assistant Attorney General Sherry L. Wilson Deputy Attorney General Contributors Michelle Apgar Supervising Civil Investigator Stuart Rabner, Attorney General Paula Carter Supervising Analyst Greta Gooden Brown, Insurance Fraud Prosecutor Norma Evans Supervising Deputy Attorney General Jennifer Fradel Prepared by: Deputy Attorney General, DOL OFFICE OF THE ATTORNEY GENERAL Charles Janousek Special Assistant Department of Law & Public Safety Pat Miller Administrative Assistant DIVISION OF CRIMINAL JUSTICE Photographers OFFICE OF THE INSURANCE FRAUD PROSECUTOR Carlton Cooper, Civil Investigator Susan Cedar, Administrative Assistant P.O. Box 094 • Trenton, NJ • 08625-0094 Production 609.896.8888 • www.njinsurancefraud.org Paul Kraml, Art Director Enrique Pinas, Graphic Designer Sina Adl, Graphic Designer Administrative and Technical Support Susan Cedar, Administrative Assistant Cynthia Ronan, Administrative Assistant Gina Lemanowicz, Civil Investigator 1 Table of Contents

About the Cover

The cover of the 2006 Annual Report of the Office of the Insurance Fraud Prosecutor (OIFP) features “Dancing Susan.” Susan represents that category of insurance fraud cheat who claims that she is disabled and unable to perform the duties of her occupation or of her daily life, but still is able to “live it up” on the money obtained from phony insurance disability claims. Cases prosecuted by OIFP demonstrate that insurance cheats who submit phony disability claims include licensed professionals such as doctors, lawyers, podiatrists, State employees, as well as persons from many other walks of life. Phony disability insurance claims can take the form of false submissions to workers’ compensation insurance plans, to Social Security disability, and to other insurance companies to replace lost wages, lost income from a professional business or practice, or to pay off loans and other debts that the claimant claims he can no longer pay because he is purportedly “disabled.” If a person elects to engage in phony disability insurance fraud, he or she can be criminally prosecuted and sent to jail. A person can also be sued for a civil insurance fraud violation and ordered to pay civil penalties and restitution. If the person is a professional licensee, he or she may also suffer loss of his or her professional license. A description of these cases can be found on page 12 of the 2006 Annual Report, and on pages 92 to 93, 110, 113, and 115.

2 Table of Contents

Message from the Insurance Fraud Prosecutor: OIFP Scores Supreme Court Victory ...... 40 “Where Do We Go From Here?”...... 4 The Growing Problem of Rate Evasion ...... 44 OIFP Table of Organization ...... 8 NJ Insurance Industry’s Perspective on OIFP Year in Review: OIFP Maintains Steady Ambulatory Surgical Centers ...... 484848 Gains in Criminal and Civil Sanctions ...... 10 NJ Legislature Takes Aim at Fraud and 2006 Licensing Sanctions Imposed Abuse in the Medicaid Program ...... 52 on Insurance Professionals by DOBI ...... 21 Closing the Loopholes on Insurance Fraud: 2006 Sanctions Imposed on Licensed OIFP’s 2006 Recommendation for Legislative Professionals by Professional Boards ...... 21 Reform... Extending Immunity for AntiFraud Information Sharing ...... 58 OIFP Criminal Investigations and Prosecutions Statistics ...... 222222 Insurance Fraud Prosecutor Case Notes ...... 66 OIFP Civil Investigations Case Index ...... 68 and Litigation Statistics ...... 222222 OIFP Criminal Case Notes ...... 70 OIFP Criminal and Civil Monetary Sanctions and Restitution Summary Putting the Brakes on 99 2001-2006 ...... 232323 Unscrupulous Insurance Licensees ...... 99 OIFP Criminal Charges Protecting the Elderly Population ...... 1066 Summary 2001-2006 ...... 232323 OIFP Civil Case Notes ...... 10888108 Criminal Cases Investigated in 2006 DOL Civil Litigation Case Notes ...... 1122 by Fraud or Provider Type ...... 24 Professional Licensing Proceedings ...... 11444114 OIFP and County Prosecutors’ Offices Total Defendants Sentenced OIFP/Government/Industry Contacts ...... 1166 to Jail 2002-2006 ...... 252525 County Prosecutor Contacts ...... 1177 New Jersey Observes First Annual Insurance Fraud Awareness Month ...... 26 OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts ...... 30 County Prosecutors’ Offices Case Notes ... 323232 OIFP Budget for FY2006 ...... 38 OIFP Expenditure Report for FY2006 ...... 39 3 A Message from the Insurance Fraud Prosecutor

A Message from the Insurance Fraud Prosecutor

In 2006, OIFP prosecuted individuals and entities for committing auto, medical, disability, property, and Medicaid fraud in hundreds of cases, some of which bear highlight- ing. For example, OIFP dismantled several large-scale auto theft rings, some of which operated out of car dealerships and solicited, among other things, owner initiated false auto theft claims or “give ups.” These cases also involved the illegal duplication of ignition keys through fraudulent locksmithing, the involvement of employees working at the car dealerships, and the fencing of stolen cars across the country on the internet In vouching for OIFP’s sustained through eBay. OIFP’s prosecution recovered over 150 stolen high-end vehicles from the tri-state area valued at over $3 million. success, the most recent report of OIFP also prosecuted a racketeering case involving two lawyers, their law firm, sev- the Coalition Against Insurance eral “runners,” and approximately 28 phony claimants, all of whom were allegedly engaged in a scheme to submit phony automobile accident insurance claims in excess of Fraud, a Washington based public $5 million, as part of a corrupt personal injury legal practice. Additionally, the owner of policy and advocacy organization a body shop, two police officers, and seven others were indicted for allegedly staging accidents to obtain over $100,000 in fraudulent auto damage claims, and a licensed chi- for consumer groups and profes- ropractor was convicted by OIFP, along with seven others, for staging accidents in order to submit phony Personal Injury Protection (PIP) claims to five insurance carriers for sionals in the public and private over 300 bogus chiropractic treatments. sectors, once again ranks OIFP as In a sophisticated life insurance fraud scheme, OIFP prosecuted a woman who pled guilty to falsifying nine life insurance claims valued at over $1 million by providing false a national leader in fighting death certificates purporting to establish her own death and posing as her daughter, who insurance fraud. was the designated beneficiary on the policies, in order to collect the proceeds. She collected over $700,000 on the false claims before her scheme was detected by the defrauded carriers. An insurance agent was also charged by OIFP and pled guilty in 2006 to falsifying insurance policy applications in order to collect a quarter of a million dollars in up-front life insurance sales commissions. In another life insurance scam, OIFP charged an individual for falsifying a life insurance application in order to obtain $1 million in life insurance benefits on the life of his brother who had perished in the September 11 attack on the World Trade Center. OIFP also convicted a Board Certified plastic surgeon who defrauded four insurance companies out of approximately $1 million by claiming that he was totally disabled and unable to practice plastic surgery when, in fact, he performed dozens of surgical procedures. On the eve of trial, the surgeon entered a guilty plea and was sentenced to prison for three years. Following an 11-week-long jury trial, OIFP obtained a conviction of a businessman who had been indicted in connection with his submission of fraudulent insurance claims totaling almost $400,000 arising out of an arson fire at his commercial property. The defendant was convicted of conspiracy, attempted theft by deception, and witness tampering. The jury found that the defendant had, among other things, padded his contents claim by alleging that articles inside his premises had been damaged by the fire when, in fact, no such articles had been in the premises at the time of the fire. The defendant was sentenced to 11 years in state prison and is appealing his conviction. In another OIFP trial victory, a Camden police officer was convicted for conspiracy, official misconduct, bribery, and Criminal Use of Runners for his role in selling police accident reports to a retired Camden police officer so that “runners” could illegally solicit individuals listed in the reports for treatment at a chiropractic facility with which he was affiliated. He was sentenced to four years in state prison. In yet another 2006 trial victory, the manager of a pharmacy, the pharmacy technician, and the pharmacy itself were convicted for billing the Medicaid program for prescription medications that were never dispensed and providing illegal kickbacks to Medicaid beneficiaries. The kickback scheme targeted HIV/AIDS patients and induced them to sell their AIDS medications back to the pharmacy. The individual defendants were sentenced to five years and six and one-half years in state prison, respectively.

6 Equally noteworthy are OIFP’s 2006 accomplishments in its civil enforcement efforts. OIFP scored a monumental victory in a New Jersey Supreme Court decision that reversed the lower courts and held that the burden of proof in civil insurance fraud actions is the preponderance of the evidence standard, rather than the higher clear and convincing standard urged by our adversaries. In 2006, OIFP also imposed civil fines on a doctor and his office manager in the amount of $4.5 million for, among other things, operating an unlicensed MRI facility for approximately ten years. In another case, OIFP fined an MRI facility $1 million for operating without a license for two years. In vouching for OIFP’s sustained success, the most recent report of the Coalition Against Insurance Fraud, a Washington based public policy and advocacy organization for consumer groups and professionals in the public and private sectors, once again ranks OIFP as a national leader in fighting insurance fraud. According to the Coalition report, out of 47 state fraud bureaus, OIFP ranked fourth in the number of fraud convictions, second in the amount of restitution, and first in the number of civil sanctions. The Coalition’s report also revealed that while OIFP received the fifth largest number of referrals, OIFP opened more cases than any other state. These results represent the culmination of OIFP’s successful partnerships with the insurance industry and County Prosecutors’ Offices throughout the State. This 2006 An- nual Report, like the seven reports that preceded it, gives testament to the close cooperation and collaboration which form the bedrock of OIFP’s partnerships. Our collective eight years of experience teaches that to answer the question “where do we go from here,” we must acknowledge that fraud schemes are far more complex and sophisticated than they have been in the past. Fraud fighters must now target licensed medical service providers who manipulate federal and State regulations, as well as diagnostic and procedure codes, in ever more sophisticated ways in order to exploit and defraud our insurance system. Simultaneously, fraud fighters must also target more clever and devious fraudsters from every profession and walk of life, including both career criminals and OIFP, with the help of our allies, will opportunistic swindlers. Whereas in the past, we have had the luxury of focusing on single incident theft cases, build on our eight-year record of OIFP and its partners must now focus our shrinking resources on complex organized success, including the exceptional theft schemes that systematically and repeatedly loot large sums of insurance dollars. These are the types of cases that will have the greatest impact in combating insurance results obtained in 2006, to target the fraud in New Jersey, will aid in eliminating fraud costs from the insurance marketplace, most complex and highest impact and will restore tax dollars to our government sponsored health programs. However, by choosing to follow this path, we must also adopt new benchmarks for success. Indeed, cases which threaten the insurance focusing on “impact” cases means foregoing the numerical measures of success that we have come to expect. industry and the insurance purchas- Therefore, OIFP, with the help of our allies, will build on our eight-year record of ing public in New Jersey. success, including the exceptional results obtained in 2006, to target the most complex and highest impact cases which threaten the insurance industry and the insurance purchasing public in New Jersey. While this focus may result in fewer overall cases being prosecuted in the future, the quality of the prosecutions which are brought, as measured by the impact those prosecutions have on deterring the most egregious insurance fraud cheats, will inure to the benefit of New Jersey citizens and businesses and will serve to take OIFP and its partners to the next level. I am honored to be a part of this effort and I am grateful for the continued support of our allies in the insurance industry, law enforcement, and other government agencies as we set our sights onward and upward.

Respectfully submitted, Greta Gooden Brown New Jersey Insurance Fraud Prosecutor 7

The Year in Review: OIFP Maintains Steady Gains in Criminal and Civil Sanctions

are initially borne by health care insurers and fraud. Disability fraud occurs when an those treatments. Cases involving medical HMOs, they are ultimately passed on to the individual misrepresents the disabling service providers committing PIP health care consumer in the forms of condition or the employment status of the insurance fraud are routinely assigned to increased premiums and deductibles, and individual in order to obtain benefits the Auto Section. may also result in a reduction in the number under a disability insurance policy. The Uninjured occupants of vehicles of eligible insureds and a narrowing of the disability policies involved in these cases are involved in collisions are sometimes scope of coverage provided under health sometimes purchased by licensed profes- contacted by “runners” and encouraged to insurance policies. sionals and provide substantial disability pursue claims for purported “soft tissue” Health care claims fraud can be benefits. Life insurance fraud can take the injuries, such as back sprains, also known committed by health care practitioners, form of misrepresentations submitted in as “whiplash.” Such soft tissue injuries are such as doctors, chiropractors, and dentists; connection with a claim for the proceeds of frequently claimed because they often are by those providing health care related a life insurance policy. These types of cases not verifiable by the use of common services, such as invalid transportation and may or may not include the actual death of diagnostic visualization techniques such as medical billing businesses; or by patients the insured. Actual case examples of both x-rays and Magnetic Resonance Imaging themselves. Health care claims fraud is types of fraud are included in OIFP’s (MRI). Instead, proof that a claimant has committed when a business or individual criminal case notes. sustained soft tissue injuries is usually makes a misrepresentation in the course of Auto Section dependent upon subjective factors, such submitting a claim for benefits under a Health care claims fraud in New Jersey as “limitation of motion” and the health insurance policy. N.J.S.A. 2C:21-4.2. frequently overlaps with automobile claimant’s subjective complaints, which A patient may commit health care claims insurance claims fraud because automo- can be easily fabricated by unscrupulous fraud, for example, by submitting a claim bile insurance policies in New Jersey claimants seeking to exploit the system. for treatment expenses for feigned injuries, provide medical benefits for those injured These are among the most difficult and or by submitting altered medical receipts in vehicular accidents as part of Personal complex cases investigated and prosecuted for reimbursement of legitimate claims. A Injury Protection (PIP) coverage. Since the by OIFP’s Auto Section. physician may commit health care claims extent of medical treatment is usually “Runners” typically receive an illegal fee fraud by knowingly submitting a bill for considered in evaluating the seriousness or commission for recruiting potential services that were either unnecessary or not of a claimant’s injuries, unscrupulous claimants and referring them to unscrupu- rendered at all. Several examples of health claimants have an incentive to seek more lous medical providers and/or attorneys care claims fraud cases prosecuted by OIFP treatment than necessary to enhance their who, in turn, benefit by providing are reported in OIFP’s criminal case notes. prospects for an inflated monetary unnecessary medical services or pursuing OIFP’s Health and Life Section also insurance settlement. Likewise, unscrupu- unwarranted claims for monetary damages. prosecutes disability and life insurance lous providers have incentive to provide See N.J.S.A 2C:21-22.1. Some “runners” resort to planning and staging auto accidents to insure a steady flow of phony injury claimants. Staged accidents typically involve one of several common scenarios, such as the passing of an unsuspecting motorist and abruptly stopping, thereby causing a “rear ender” in which the innocent driver appears to be at fault. Another common scenario involves encouraging an unsuspecting motorist to proceed through a stop sign, or from a parking space, and quickly accelerating to cause a crash, again making it appear that the unsuspecting motorist is at fault. In other cases, a “runner” or conspira- tor may claim to have been in an accident where there was no collision at all, such as where a previously damaged vehicle is placed at a public location and it is falsely First Assistant Prosecutor reported that the vehicle and its occupants John J. Smith reviews prosecution recommendations. were the victims of a crash with a phantom 12

The Year in Review: OIFP Maintains Steady Gains in Criminal and Civil Sanctions

deal with the challenges presented by the (NJSIA), the Insurance Industry Liaison Professional and subtleties and complexities of insurance has also been instrumental in organizing Occupational Boards fraud. To address the need for insurance and promoting the two-day Annual Committing civil or criminal insurance fraud training in the local law enforce- NJSIA Conference, which has served over fraud can result in professional license ment community, and to enlist the the years to offer valuable training and suspension, revocation, or other disciplin- participation of local law enforcement networking opportunities for insurance ary actions. Coordination is necessary to agencies in the battle against insurance fraud professionals from both the public ensure that professional licensing boards fraud, the OIFP Law Enforcement and private sectors. The Annual NJSIA within the Division of Consumer Affairs, Liaison has coordinated periodic fraud Conference is the most highly attended Department of Law and Public Safety, are training programs for law enforcement conference of its kind in the United States alerted promptly when a licensee is the personnel throughout the State. and provides some of the most valuable subject of an OIFP investigation. In 2006, the Law Enforcement educational and training opportunities Responsibility for coordinating OIFP’s Liaison also conducted periodic regional available today for insurance fraud activities with those of the professional coordination meetings of municipal, professionals. and occupational boards is assigned to county, and federal law enforcement The OIFP Insurance Industry Liaison OIFP’s Professional Boards Liaison who, officials. These meetings afford the also played a prominent role in the prior to joining OIFP in 1998, served as attendees the opportunity to meet planning and organization of the Annual an Executive Director of the New Jersey counterparts in other participating Insurance Fraud Summit sponsored State Medical Board. Procedures imple- agencies, to establish ongoing channels jointly by NJSIA and the Insurance mented by the Professional Boards of communication with one another, Council of New Jersey (ICNJ). At the Liaison provide for prompt notification and to share information and resources, October 5, 2006, Summit, executives from to the professional licensing boards by as appropriate. OIFP’s regional coordina- the insurance industry, as well as senior OIFP when licensees are the subject of tion meetings have also featured speakers level staff from the Attorney General’s OIFP investigations. These procedures on insurance fraud related topics, such as Office, DOBI, and OIFP, presented over also provide for reciprocal notification of organized insurance crime rings, sophis- 200 attendees with information about OIFP by the professional licensing boards ticated identity theft scams, and forensic OIFP’s cases, programs, and initiatives, as so that OIFP can initiate a civil or criminal investigative techniques. well as new fraud trends and schemes. investigation, as warranted. Insurance Industry In addition, during 2006, OIFP’s The specific duties of the Professional Insurance Industry Liaison hosted or Boards Liaison involve, among other Success in the battle against insurance things, the maintenance of a comprehen- fraud also hinges upon a cooperative and participated in numerous meetings with various industry and trade groups sive database of insurance fraud com- mutually supportive partnership between plaints involving professional licensees, law enforcement and the private insur- dedicated to combating insurance fraud. These meetings included ongoing including information as to the nature of ance industry. OIFP’s Insurance Industry such allegations, the source of the referral, Liaison is primarily responsible for working group meetings with industry professionals focusing on areas of shared and the status of the matter within the maintaining OIFP’s close working Division of Consumer Affairs’ Enforce- relationship with private industry. In concern, such as workers’ compensation premium insurance fraud. ment Bureau and OIFP. To provide for addition, the Insurance Industry Liaison the periodic review and discussion of The Insurance Industry Liaison is is assigned to coordinate OIFP activities licensees under suspicion for insurance also responsible for referring and tracking with the Department of Banking and fraud, the Professional Boards Liaison insurance fraud related matters involving Insurance (DOBI), the New Jersey also established and chairs the Liaison and businesses and individuals licensed by Motor Vehicle Commission (MVC), and Continuing Communications Group. The DOBI. The Insurance Industry Liaison various industry trade groups. The group is comprised of intermediate and serves as OIFP’s primary contact person Insurance Industry Liaison’s activities upper level OIFP supervisory investiga- for DOBI. In this capacity, the Insurance have been instrumental in ensuring the tive and legal staff and representatives of Industry Liaison served as a key member continuing progress of anti-fraud the Division of Consumer Affairs’ in the periodic meetings of the DOBI/ programs statewide. Enforcement Bureau. The group meets OIFP Interface Group. Those meetings As the primary point of contact, the bi-monthly to track the status and were attended by representatives of Insurance Industry Liaison routinely progress of active cases of professional DOBI’s Enforcement Division, which provides advice, guidance, and technical licensees under investigation by either oversees the tracking and coordination assistance to members of the insurance agency. Maintaining the database and of case dispositions involving licensed industry. As a charter member of the New convening the monthly meetings facilitate producers, public adjusters, and real Jersey Special Investigators Association the ongoing exchange of information estate agents. necessary for the detection and investiga- 20

The Year in Review: OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts

County Prosecutors’ Offices Case Notes Atlantic County Prosecutor’s Office treatment through Horizon Healthcare Following his arrest, Iwanicki implicated State v. Miguel Pacheco totaling in excess of $1,000. Additionally, Adam Nelag as the individual who was Buritica allegedly filled 24 prescriptions utilizing the vehicle during the time when it Miguel Pacheco was arrested on July 20, through the Enbrel Enrollment Program. had been burned. On October 20, 2006, a 2006, and charged with manufacturing warrant was issued for Nelag’s arrest. Nelag and sale of false government documents. Bergen County Prosecutor’s Office was extradited from Florida and charged with At the time of his arrest, a search warrant State v. Catherine Xerri, et al. Insurance Fraud. The matter is pending. was executed resulting in the seizure of equipment allegedly utilized in the On May 12, 2006, Catherine Xerri was sentenced to four years state prison for Burlington County manufacture of counterfeit documents. Prosecutor’s Office On December 21, 2006, Pacheco pled conspiracy to commit Insurance Fraud guilty to an indictment that charged him and eight years state prison for attempted State v. Colleen Sacca with sale of false government documents. murder. Xerri purchased a 2004 Dodge Colleen Sacca, a former nurse, pled guilty Ram and fraudulently reported on a to Health Care Claims Fraud and was The Insurance Fraud Unit, with the motor vehicle insurance application that sentenced on September 22, 2006, to three assistance of the Hammonton Police she was the primary operator of the years probation, conditioned upon serving Department, NJ Motor Vehicle Commis- vehicle and that it would be parked at her 364 days in county jail at the conclusion of sion Security Investigation Unit, US residence in Westwood. probation. Sacca allegedly presented a Department of Labor, and the FBI, Franklin Baez, who allegedly utilized fraudulent prescription for hydrocodone at conducted a six-month undercover a pharmacy in Cinnaminson Township, investigation, which resulted in the purchase the vehicle for his construction business, was allegedly the sole driver of the vehicle which was then submitted to her prescrip- of alleged counterfeit documents, including tion insurance plan. vehicle registrations, vehicle insurance and kept it parked at his residence in identification cards, and Social Security cards. Hackensack. Xerri failed to disclose this State v. William Schobert Pacheco will be sentenced in 2007. information on her insurance application. In a cooperative investigation with It is alleged that Baez’ driving privileges Medford Township, William Schobert was State v. Blanca Buritica were suspended at the time, resulting in arrested on July 11, 2006, and charged with On June 2, 2006, Blanca Buritica was his ineligibility to obtain a motor vehicle Health Care Claims Fraud, theft by deception, sentenced to three years probation following insurance policy in his name. As a result and forgery. The State alleges that, between her guilty plea to an indictment that charged of this investigation, Baez was charged March 2002 and March 2004, Schobert, a her with knowingly exhibiting a document with Insurance Fraud and conspiracy to pharmacist employed at a Medford pharmacy, that falsely purported to be issued by a commit Insurance Fraud. falsely created prescriptions in his name and government agency and possession of a Subsequent to this investigation, Xerri in the names of others, printed receipts for false government document. and Baez were arrested and charged with the fraudulent prescriptions, subsequently The Atlantic County Prosecutor’s Office attempted murder. Baez remains in county deleted the records from the store’s com- Insurance Fraud Unit initiated an investiga- jail pending disposition of the matters. puter, and then allegedly submitted the tion after receiving information that a receipts as claims for reimbursement from his State v. Thomas Iwanicki, et al. patient of a local doctor had been receiving insurance company for over $80,000. The medical insurance benefits for several years On October 20, 2006, Thomas Iwanicki matter is pending Grand Jury. was arrested and charged with Insurance under an assumed name. The investigation State v. Patrick Peterson revealed that Buritica was in the United Fraud. Iwanicki filed a report with the Patrick Peterson pled guilty to an States illegally. While here, she obtained a Hoboken Police Department claiming that indictment charging him with simulating fictitious Social Security card and eventually his 2001 Mercedes-Benz SL500 had been a motor vehicle insurance identification obtained a New Jersey identification card stolen in Hoboken. He also filed a claim in card. On October 20, 2006, he was under her assumed name. Buritica then excess of $25,000 with Allstate Insurance sentenced to 12 months state prison. used the counterfeit documents to obtain Company for the loss of the vehicle. employment in an Atlantic City casino Subsequently, the vehicle was discovered State v. Shirley Gismondi, et al. where she then received health insurance partially burned in Englewood. A forensic examination conducted on behalf of the On December 1, 2006, Lori Martellacci, benefits through a union that covers casino Gina Naticcione, and Richard Naticcione workers. insurance company concluded that the car had not been stolen and that the fire was were each sentenced to two years probation Between March 2001 and September caused by a flammable liquid poured on following their guilty pleas to charges of 2005, Blanca Buritica, using an assumed the interior surfaces of the car. conspiracy to commit theft by deception. In name and counterfeit identification, addition, they were each ordered to pay a allegedly submitted 28 claims for medical $1,000 criminal fine and joint and several 32 restitution in the amount of $1,911 to the Burlington Township Fire Department. On September 29, 2006, Eric Schleinkofer was sentenced to three years state prison and ordered to pay restitution to the Burlington Township Fire Department in the amount of $1,911. Schleinkofer previously pled guilty to charges of conspiracy to commit arson. On the same date, the court sentenced Shirley Gismondi to two years probation. Gismondi previously pled guilty to conspiracy to commit theft by deception. Lori Martellacci, with the assistance of Gina Naticcione and Richard Naticcione, arranged to “give up” her vehicle when she found herself unable to make the car payments. Richard Naticcione contacted Eric Schleinkofer, who agreed to “get rid” of the car for $200. Richard Naticcione gave the keys to Schleinkofer. Subsequently, Schleinkofer and his girlfriend, Shirley Gismondi, picked up the vehicle at a local mall and set it on fire Warren County Detective Clement Mezzanotte prepares an investigation report. in Burlington Township. Camden County Prosecutor’s Office State v. Bryan Sharp Brian Weimer was also charged for his alleged role in picking up the fraudulently Essex County Prosecutor’s Office Following a three-week jury trial, Bryan obtained prescriptions. Weimer is State v. Keith Roberts Sharp was convicted of arson for currently a fugitive; a bench warrant has Keith Roberts pled guilty to Insurance insurance on December 20, 2006. Sharp, been issued for his arrest. Fraud on February 27, 2006. On April 21, Chief of the Camden County Fire Police, 2006, he was sentenced to three years in state set fire to his house in order to benefit State v. Robert Chisholm prison. Roberts had reported his vehicle from the proceeds of a false insurance On October 23, 2006, Robert Chisholm stolen from Vineland, but could not explain claim. An investigation by the Fire was sentenced to five years and 72 days in to investigators how his transponder Marshal determined the fire to be arson. state prison. Chisholm previously pled equipped 2001 Mitsubishi Galant arrived in High Point Insurance Company paid guilty to an indictment that charged him Newark, to be burned, without one of the Sharp $200,000 on the fraudulent claim. with forgery, criminal attempt to obtain keys that he surrendered after the fire. Sentencing is scheduled for early 2007. CDS by fraud, theft of property, and Health State v. Carlos Torres State v. Catherine Fee, et al. Care Claims Fraud. Chisholm stole a blank prescription pad from his treating physician, On September 25, 2006, Carlos Torres pled Catherine Fee, a licensed pharmacist, and, on various occasions, entered a guilty to Insurance Fraud and theft by pled guilty to an Accusation charging her pharmacy and submitted fraudulent deception for arranging to have his 2003 with conspiracy to distribute CDS by prescriptions for Xanax. Chisholm usually Chevy Trailblazer disposed of in Newark. forging doctors’ signatures on prescrip- paid for the prescriptions with cash, Torres was sentenced to two years probation. tion phone-in logs. The incidents however, in one incident, he used his occurred without the doctors’ knowledge. Medicaid plan as payment. Pharmacy State v. Vincent DeVito On February 10, 2006, Fee was sentenced employees became suspicious and notified Vincent DeVito was indicted on March to three years probation, ordered to pay law enforcement when they noticed that the 6, 2006, and charged with Insurance $1,229 in restitution to CVS Pharmacy, prescription amounts had been altered. Fraud and arson. DeVito allegedly and surrendered her pharmacist’s license arranged to have his 1996 Mercedes-Benz for three years. Eckerd Pharmacy was G320 burned in Belleville. The matter is repaid $1,250 in a separate agreement. pending trial.

33 The Year in Review: OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts

Gloucester County Prosecutor’s Office cards has increased and fictitious insurance admitted into the PTI Program. As part State v. Dana Balbian identification cards are more readily of the plea agreement, the defendants detected. In addition, various Investiga- agreed to pay restitution in the amount In September 2006, Dana Balbian entered tors have made direct contacts with the of $27,500, with Baptista responsible for the Pretrial Intervention (PTI)1 Program after insurance companies involved and have $15,000 of that sum. pleading guilty to an Accusation charging her obtained up-to-date information on the with obtaining CDS by fraud and Health Care vehicles that are currently insured. As an Hunterdon County Prosecutor’s Office Claims Fraud. Balbian, a pharmacy employee, added benefit, the NJMV Inspectors State v. Bruce Keller, et al. allegedly received and filled 28 fraudulent utilize the information in the UMID in prescriptions. She alleged the prescriptions Bruce and Irlene Keller were indicted their daily inspections throughout the were in the names of two individuals who and charged with aggravated arson, arson, State of New Jersey. As a result of the were her friends. Four of the 28 fraudulent attempted theft by deception, and above initiative, the owners of J & T prescriptions were submitted to Horizon of conspiracy. On June 20, 2006, following a Transit and Sphinx Transportation have New Jersey for payment. two-and-a-half week jury trial, they were been successfully prosecuted. convicted on all charges. The Kellers are State v. Wendell E. Frazier State v. Mike Murtana pending sentencing in this matter. On September 14, 2006, Wendell E. Mike Murtana, the owner of Sphinx The charges arose from circumstances Frazier was sentenced to three years Transportation, pled guilty to an surrounding a residential fire at a home probation. Frazier previously pled guilty indictment that charged him with the Kellers owned in Hunterdon to an Accusation charging him with Insurance Fraud. On September 15, County. Months prior to the fire, they attempting to commit Insurance Fraud. 2006, he was sentenced to four years had purchased a residence in Virginia. Frazier reported to the Glassboro Police probation and ordered to pay restitution However, Bruce and Irlene Keller were Department that he had been carjacked. in the amount of $67,850. Sphinx in New Jersey and staying at the Frazier later admitted that he filed a false Transportation was targeted in a Hudson Hunterdon County home at the time of police report and made false statements to County initiative designed to address the the fire. Both escaped from the burning the insurance company on his claim. diversion of auto insurance premium residence uninjured. Hudson County Prosecutor’s Office money and uninsured motorists. Bruce and Irlene Keller subsequently Hudson County Initiative State v. Ernest Baptista, et al. submitted a claim to Chubb Insurance In 2004, the Hudson County On October 19, 2006, Ernest Baptista Company claiming approximately $2.5 Prosecutor’s Office Insurance Fraud Unit pled guilty to Insurance Fraud for his million in losses from both the became aware of abuses that existed in the part in the arson of a 2005 Chevrolet residence and the contents of the commuter “Dollar” van business operating Equinox. Baptista, in his position as residence. An investigation conducted within Hudson County, in which the credit manager at the dealership where by the New Jersey State Police Arson/ insurance premium money was being the vehicle had been purchased, had also Bomb Unit determined the fire to be diverted and fictitious insurance identifica- arranged for its disposal when the arson, for which the Kellers were tion cards were being provided to indepen- buyers, Sandra Hernandez and Oscar charged. The investigation also revealed dent owner operators by franchised carrier Mendoza, allegedly could not make the the absence of furnishings and clothing management. As part of a proactive monthly payments on the vehicle. at the fire scene, as well as other response to this type of illegal activity, the Hernandez and Mendoza, as cooperating circumstantial evidence. It was alleged New Jersey Motor Vehicle Commercial Bus witnesses, also pled guilty to Insurance that the Kellers had moved the majority Inspection Unit, various Municipal Police Fraud in this matter and are to be of their belongings to their Virginia Departments, and the Port Authority Police Department were contacted. Arrangements were made to conduct eight joint safety 1. Pretrial Intervention (PTI) is a diversionary program created by statute and court rule. The inspections of these vehicles, three during Legislature established that it is the public policy of the State to divert certain defendants from the 2005 and five during 2006, in various criminal justice system when, among other factors, diversion will serve to remove cases from the criminal court in order to focus resources on more serious matters or more dangerous defendants, or Hudson County locations utilizing the PTI supervision will suffice to deter that particular defendant from future criminality. N.J.S.A. 2C:43-12a. Uninsured Motorists Identification A defendant is admitted to PTI upon the recommendation of the PTI program director and the consent of Directory (UMID) issued each year by OIFP. the prosecutor. The program director and the prosecutor are required to consider, and base their decisions on, the defendant’s amenability to correction, responsiveness to rehabilitation, and the nature As a result of these joint operations, of the offense. Id. at -12b,e; PTI Guideline 3. If a defendant is admitted to PTI, the criminal prosecution is the NJMV Commercial Bus Unit’s, as well suspended while the defendant undergoes the supervision or rehabilitation required by the PTI program as the various Municipal Police Depart- staff. The judge may order restitution as part of the PTI program. If the defendant successfully completes the program, the criminal charge is dismissed. If the defendant fails to complete the program, the ments’, ability to recognize valid insurance criminal prosecution resumes. N.J.S.A. 2C:43-13; R. 3:28. 34 residence prior to the fire, and, there- State v. Kenneth Swick 2006, Kimberly Stark (formerly McCauley), fore, fabricated the loss of contents Kenneth Swick pled guilty to uttering a having previously pled guilty to theft by insurance claim. fraudulent government document and deception, was sentenced to three years uttering a fraudulent insurance identifica- probation and ordered to pay restitution Mercer County Prosecutor’s Office tion card. He was sentenced to probation in the amount of $8,895 to five insurance State v. Justin Crowe on April 21, 2006. Swick presented a companies. In March 2006, Kimberly Justin Crowe was indicted and charged Pennsylvania drivers license, to avoid using Stark McCauley executed a $5,000 civil with presenting a fictitious insurance his suspended New Jersey drivers license, Consent Order. identification card to a police officer. He and a fraudulent insurance card to a police David McCauley and his former wife was admitted into the PTI Program on officer during a motor vehicle stop. Kimberly (Stark) McCauley were indicted December 2, 2006. Morris County Prosecutor’s Office and charged with numerous crimes arising State v. Sherayla Hill out of their engagement in a pattern of State v. Delmiro Dacuna conduct that involved the submission of Sherayla Hill was indicted and charged On January 11, 2006, Delmiro Dacuna with tampering with public records (a false or inflated claims to various health was charged with Insurance Fraud insurance companies. David McCauley temporary registration tag) and uttering a resulting from his alleged inclusion of fraudulent insurance identification card for operated a licensed substance abuse false information on his company’s treatment center for adolescents. Kimberly allegedly presenting a fake insurance application for workers’ compensation identification card to a New Jersey State McCauley conducted her chiropractic insurance. Dacuna was admitted into the practice at a location that was adjacent to Trooper. She was admitted into the PTI PTI Program and fined $500. Program on February 16, 2006. her husband’s rehabilitation center. State v. Kimberly (Stark) McCauley, et al. David McCauley sent more than 30 of State v. Jennifer Radigan his patients to his wife for chiropractic David McCauley pled guilty to Health services that were either not necessary or Jennifer Radigan pled guilty to filing a Care Claims Fraud, and, on October 6, false police report and attempted theft for 2006, he was sentenced to four concurrent not performed. Kimberly McCauley subsequently agreed to cooperate with falsely reporting her car stolen. Radigan five-year state prison terms. On June 16, was sentenced to five years probation on the investigation. January 9, 2006. State v. Calvin Riggins On May 26, 2006, Calvin Riggins pled guilty to an indictment charging him with tampering with public records after presenting a fraudulent insurance identification card to a police officer. He was given a probationary sentence. State v. Sonia Styles On August 7, 2006, Sonia Styles pled guilty to an indictment charging her with eluding and theft by receiving stolen property. On September 29, 2006, she was sentenced to seven years state prison with a three-year period of parole ineligibility. Styles was eluding police while driving a car that had been stolen from South Carolina as part of a sophisticated auto theft ring that stole from auto dealerships in and around the South Carolina area. The modus operandi employed by the thieves was to test drive a car and switch keys after the test drive; then the thieves would drive the car off the lot (utilizing the stolen key) after the dealership closed for the night. Detective Douglas Porter, Secretary Tracy Zandarski, and Assistant Prosecutor Rachelle Jones review a Sussex County insurance fraud case. 35 The Year in Review: OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts

State v. Tina Hadjissa, et al. ance Company seeking compensation for State v. Adalberto Matias On September 6, 2006, Tina Hadjissa injuries sustained in the alleged fall. On October 17, 2006, Adalberto Matias and Tampe Hadjissa, a married couple, Video surveillance of the parking lot was indicted and charged with attempted were indicted and charged with conspiracy recorded Therrien’s actions at the time of theft by deception. Matias allegedly filed a to commit Insurance Fraud, Insurance the claimed incident. The video demon- fraudulent motor vehicle theft claim with Fraud, and theft. The Hadjissas allegedly strated that the claimed “slip and fall” Clarendon National Insurance Company submitted fraudulent information in did not occur. stating that he had last driven his car and connection with their application for parked it on March 11, 2003, when, in fact, Medicaid and public assistance and Passaic County Prosecutor’s Office the vehicle was recovered burned in allegedly received money and benefits to State v. Isabel Tavares a/k/a Isabel Connecticut on March 10, 2003. The which they were not entitled. Both Rodriguez matter is pending trial. defendants were admitted into the PTI On June 30, 2006, Isabel Tavares, a/k/a Program in November 2006, conditioned Isabel Rodriguez, was sentenced to five years State v. Yuri Guillen upon making full restitution in the probation after pleading guilty to theft by An Accusation was filed charging Yuri amount of $7,000. deception. Tavares was also ordered to pay Guillen with attempted theft by over $50,000 in restitution. Tavares submit- deception. On November 17, 2006, State v. Rony Hernandez, et al. ted a fraudulent workers’ compensation claim Guillen was admitted into the PTI On October 11, 2006, Rony Hernandez, to Chubb Insurance. Tavares failed to disclose Program for a period of three years. his wife, Ligia Canelas, and his brother, several prior and subsequent injuries for Guillen allegedly submitted a fraudulent Denis Hernandez, were indicted and which she also submitted claims. Further- auto theft claim to First Trenton charged with receiving stolen property more, she used false personal identifiers Indemnity Company. A joint investiga- (namely, cars and motorcycles), operating a including a false Social Security number and tion by the Insurance Fraud Unit and “chop shop,” fencing, altering motor date of birth, in an effort to conceal those Paterson Fire Department determined vehicle identification numbers, and other additional claims from Chubb. that the alleged theft and subsequent crimes. Rony Hernandez and Denis burning of Guillen’s 2004 Dodge Hernandez were also charged with leading a State v. Tamara Issac Caravan were fraudulent. stolen car ring. The matter is pending trial. On April 24, 2006, Tamara Issac was admitted into the PTI Program for a Salem County Prosecutor’s Office Ocean County Prosecutor’s Office period of three years and was ordered to State v. Debora Karpinski State v. Brian Stout pay $3,000 in fines. Issac allegedly claimed On April 3, 2006, Debora Karpinski On September 28, 2006, Brian Stout was that her vehicle was struck from behind by pled guilty to an Accusation charging her sentenced to three years state prison after another vehicle. A subsequent investiga- with Insurance Fraud and was ordered to pleading guilty to Health Care Claims tion by AAA Mid-Atlantic Insurance pay restitution in the amount of $36,000. Fraud, forgery, obtaining a controlled Group and the Insurance Fraud Unit Between May 2004 and July 2005, dangerous substance by fraud, and theft. revealed that Issac had actually backed up Karpinski fraudulently obtained prescrip- Stout obtained stolen prescription blanks into the opposing vehicle. tion blanks from her previous employer, a and proceeded to have a series of prescrip- State v. Felipe Zapata, et al. doctor, and submitted the prescriptions tions filled for OxyContin, using his health through Aetna Insurance Company. care benefits. An alert pharmacist checked On February 9, 2006, Felipe Zapata was on a prescription submitted by Stout and arrested and charged with Health Care Claims State v. Liza Hern found that it had not been authorized. Fraud. It is alleged that Felipe and his brother, On August 23, 2006, Liza Hern, a Pharmacy records indicated that there had Manuel Zapata, were “jump in” passengers nurse, was indicted and charged with been ten additional prescriptions that had in a motor vehicle accident. Felipe and Manuel Insurance Fraud. On four separate been filled by Stout. Zapata allegedly claimed to be injured in the occasions, Hern allegedly submitted accident and were allegedly transported from fraudulent prescriptions to a pharmacy to State v. Carolyn Therrien the scene via ambulance. Subsequently, they obtain 120 tablets of Oxycodone and On June 19, 2006, Carolyn Therrien allegedly began treatment with a local then submitted claims for the illegally was sentenced to three years probation chiropractor and claims for such treatment obtained drugs to Express Scripts, which after pleading guilty to Insurance Fraud. were submitted to Palisades Insurance paid $452 for the fraudulent prescriptions. Therrien reported to a store manager that Company. The State alleges that neither Felipe The matter is pending trial she slipped and fell on an icy parking lot nor Manuel Zapata were passengers in the at a local supermarket. Subsequently, vehicle at the time of the accident. A warrant Therrien filed an insurance claim with the has been issued for Manuel Zapata’s arrest. Travelers Property and Casualty Insur- 36 State v. Arnetia Kidd to the claimants’ home. Doyle’s alleged State v. Ruthie Walker On July 19, 2006, Arnetia Kidd was misleading statements were allegedly On September 14, 2006, Ruthie Walker indicted on charges of Insurance Fraud. intended to induce the insurance company was charged with Insurance Fraud for Kidd allegedly failed to report an into paying a grossly exaggerated claim. allegedly falsely reporting to New Jersey additional driver on her auto insurance The case is pending trial. Manufacturers Insurance Company that policy. As a result, Allstate Insurance her car had been stolen in New Jersey Company was allegedly defrauded Sussex County Prosecutor’s Office several weeks after it actually had been approximately $900 in premium State v. Clayton Erven parked in an airport parking garage in payments. The matter is pending trial. On December 6, 2006, Clayton Detroit, Michigan. Erven was sentenced to one year State v. Thias Thompson State v. Reveca Vigier probation, ten days in the SLAP On August 2, 2006, Thias Thompson program, and ordered to pay criminal Reveca Vigier was charged with was indicted and charged with Insurance fines after pleading guilty to exhibiting simulating a motor vehicle insurance Fraud. Thompson allegedly failed to report an altered or simulated motor vehicle identification card. On May 5, 2006, she an additional driver on her auto insurance insurance identification card. Erven was accepted into the PTI Program. Vigier policy. As a result, Allstate Insurance produced an expired insurance card allegedly presented a fraudulent Liberty Company was allegedly defrauded from Selective Insurance Company Mutual insurance identification card to an approximately $1,300 in premium during a motor vehicle stop. The Elizabeth police officer prior to leaving payments. The matter is pending trial. following day he stopped at the the scene of an accident. Somerset County Prosecutor’s Office Sheriff’s Department and produced an State v. Marco Trancho altered insurance card to get his car State v. Johnny Shi On August 2, 2006, Marco Trancho was released from the impound yard. accepted into the PTI Program. Trancho On May 4, 2006, Johnny Shi was was charged with Insurance Fraud for arrested and charged with theft by Union County Prosecutor’s Office allegedly inflating the value of the deception. Shi, who was a salesman at his State v. Terrance J. Barfield accessories in his stolen car claim submit- brother’s communications store, allegedly On August 25, 2006, Terrance J. ted to Allstate Insurance Company. fraudulently filed approximately 30 Barfield was sentenced to three years state insurance claims on cellular telephones prison after previously pleading guilty to Warren County Prosecutor’s Office that he had allegedly recently sold to Insurance Fraud. Barfield assisted in State v. Georgeann Pludowski customers. As a result of those claims, dismantling a car knowing it would be Shi allegedly received new replacement On October 16, 2006, Georgeann reported stolen for insurance purposes. Pludowski pled guilty to conspiracy and cellular telephones by mail, which he The owner of the car ultimately made a allegedly either kept for himself or resold theft by failure to make required disposi- fraudulent claim to Rutgers Casualty tion of property received in connection as inventory at another store located in Insurance Company. New York. The Green Brook Police with allegedly converting the proceeds of Department and Insurance Fraud Unit State v. Andre Manning, et al. an estate, which included a $30,000 life were assisted by fraud investigators from On August 3, 2006, Andre Manning insurance benefit, for her and her Cingular Wireless and Asurion Insurance was sentenced to probation, condi- husband’s personal use. She was admitted during this investigation. tioned upon serving 270 days in county into the PTI Program and ordered to pay jail, on charges of Insurance Fraud. $36,865 in restitution. State v. Anthony Doyle Manning allegedly arranged to have his State v. Steven Lee Wilson On September 1, 2006, Anthony “Tad” girlfriend’s car disassembled at a “chop On September 22, 2006, Steven Lee Doyle was arrested and charged with shop,” knowing she would report it Insurance Fraud. Doyle, a public adjuster, Wilson pled guilty to falsifying or stolen to Clarendon Insurance Com- tampering with public records and failure was hired by a Somerset couple to evaluate pany. Manning allegedly admitted to damage to their counter top resulting from to register as a contractor. He was participating in the destruction of two sentenced to 18 months probation, and a small kitchen fire in their home and to file additional cars, knowing that they a claim with New Jersey Manufacturers ordered to pay $2,000 in restitution and would be reported stolen for insurance $280 in criminal fines. Wilson, trading as Insurance Company on their behalf. Doyle purposes. The two insurance companies allegedly filed an inflated claim for Stevcon Renovations, allegedly presented involved were High Point and an altered Certificate of Liability Insurance approximately $15,600 in damages. Proformance Insurance. Manning’s However, the State alleges that an investiga- to a homeowner who had hired him to girlfriend, Josezetta Hill, was admitted perform home renovations. tion by the insurance company revealed the into the PTI Program. fire caused approximately $700 in damages 37 The Year in Review: OIFP’s Budget for Fiscal Year 2006

OIFP’s Budget for Fiscal Year 2006 by Ray Shaffer

In accordance with N.J.S.A. 17:33A-30, State Auditor Report for the Department of Law ■ Intermittent Support OIFP operations are funded through an and Public Safety, Division of Criminal Justice, DCJ also provides a host of resources to assessment on the insurance industry. It Office of the Insurance Fraud Prosecutor, issued OIFP on an as-needed basis. Extra should be noted that although the Medicaid July 15, 2005. Such services include manpower for search warrants, forensic Fraud Section is a part of OIFP, monies administrative, legal, and investigative computer analysis, handwriting analysis, derived from the assessment on the support. The Annual Cost Allocation Plan and the installation of electronic insurance industry do not fund the Medicaid details the following four levels of support surveillance equipment are a few Fraud Section. Rather, the Medicaid Fraud provided by DCJ to OIFP: Administrative examples of investigative support Section is funded by a federal grant that Support, Professional Support, Intermittent provided by DCJ to OIFP. In addition, provides 75% federal funding and requires Support, and Non-Salary Costs. OIFP relies on designated DCJ legal staff the State to provide a 25% State match from ■ Administrative Support to handle its appeals, ethics inquiries, and Direct State Services (DSS) funds. Due to the nature of administrative forfeiture actions, among other legal OIFP operating costs consist of work in such areas as Human tasks. Since these resources are used expenses incurred directly by OFIP staff, as Resources, Fiscal and Budget, intermittently, DCJ has developed a new well as expenses for services, facilities, and Facilities, and IT Services, it is difficult division-wide timekeeping system to equipment shared jointly with the to differentiate between those services enable OIFP to precisely track the Division of Criminal Justice (DCJ) and provided to OIFP and those services amount of time spent by DCJ employ- the Department of Law and Public Safety, provided to other sections within ees on OIFP activities. At the end of each but benefitting OIFP staff and OIFP DCJ. The Cost Allocation Plan fiscal quarter, time spent by non-OIFP operations. By sharing these common provides that administrative salary staff on OIFP matters is calculated and services with DCJ and the Department of costs are to be allocated based on a OIFP reimburses DCJ for those costs. Law and Public Safety, OIFP is able to take ratio of the number of OIFP staff to The new timekeeping system also works advantage of economies of scale and the number of DCJ staff. At the in reverse, tracking the number of hours thereby reduce its overall operating budget. beginning of each fiscal year (July 1), worked by OIFP staff on non-OIFP In order to ensure that there is this percentage is determined and assignments. Given tight budget transparency, accountability, and fiscal applied to the salaries and fringe restrictions in the State and the increasing integrity in all expenditures of industry benefits costs of those sections demands on statewide law enforcement, it monies, the Insurance Fraud Prosecutor classified as providing administrative is sometimes necessary for OIFP staff to has implemented a Cost Allocation Plan support to OIFP for that fiscal year. provide support in implementing which precisely identifies all support ■ Professional Support statewide DCJ initiatives. However, this services provided by DCJ to OIFP and does not mean that the insurance industry documents a fair methodology for DCJ provides a number of services should pay for these non-insurance fraud assessing costs associated with those that are needed to allow the criminal related activities. The new tracking system expenses. A summary of the Cost component of OIFP to better allows both OIFP and DCJ to determine Allocation Plan and quarterly expense investigate and prosecute insurance the number of hours worked by the reports are posted on OIFP’s Web site so fraud. Evidence Storage, State Grand respective staff members and reconcile the that the insurance industry, as well as the Jury, and Records and Identification manpower costs on a quarterly basis. Sections, among others, allow OIFP general public, will have continuous access ■ Non-Salary Costs to OIFP’s fiscal reports. to use resources already in place rather than create its own separate resource In order for OIFP to accomplish its In accordance with the 2005 State Auditor providers. In order for OIFP to pay mission, it must have facilities and Report, it is appropriate for DCJ personnel for its fair share of those shared equipment available for its use. Items who provide various support services to criminal resources, at the beginning of that are used solely by OIFP are OIFP to be paid out of OIFP funds. See each fiscal year, the Cost Allocation purchased and maintained by OIFP. Plan details a formula to determine Items, such as buildings, computer the percentage size of the criminal networks, and phone systems, that Ray Shaffer is the OIFP Administrative Liaison component of OIFP to that of DCJ. OIFP shares with other sections within and assists the Insurance Fraud Prosecutor in This percentage is then used for the DCJ, are paid based on the percentage the day-to-day administrative management of upcoming fiscal year to pay the use of those resources by OIFP staff. OIFP by working closely with the Division of corresponding portion of staff The percentage size of OIFP as Criminal Justice’s Administrative Bureau. He had been part of the DCJ Administrative Bureau salaries and fringe benefits costs for compared to DCJ is determined at the for 27 years before coming to OIFP in 2005. staff assigned to DCJ sections under beginning of each fiscal year and that this classification. percentage is applied to those costs as they are incurred through the fiscal year. 38 OIFP Expenditure Report for Fiscal Year 2006

Personnel (Salaries and Fringe Benefits) $21,800,327.35 OIFP Staff Salaries and Fringe Benefits111 $19,887,273.26 DCJ Support Staff Salaries and Fringe Benefits222 $1,913,054.09 Outside and Professional Services $4,894,587.83 County Prosecutor Reimbursement Program333 $2,905,699.84 DOL Professional Support444 $1,600,000.00 Expert Witness and Other Professional Services $146,152.30 Transcription and Other Expenses $242,735.69

Training, Trial and Investigative Travel Expenses5 $20,904.71

Vehicles and Vehicle Maintenance $703,460.68 Fuel and Oil for OIFP Undercover Vehicles $79,734.80 Undercover Vehicle Lease and Maintenance $122,821.52 State’s Central Motor Pool Vehicle Lease, Maintenance & Fuel666 $500,904.36

Office Supplies, Services, Equipment and Maintenance $984,399.68 Household and Janitorial Supplies $10,413.55 Maintenance of Equipment $42,665.63 Office Equipment Purchases $80,172.30 Other Supplies $198.34 Printing and Office $90,039.35 Postage $31,113.76 Telephone $215,881.99 Database Licensing Purchases and Maintenance $178,432.51 State Mainframe Charges $36,924.14 IT and Telephone Equipment Purchases and Maintenance $298,558.11

Building Rent and Maintenance7 -$1,121.88 Maintenance - Building $141.12 Rent - Buildings $1,263.00

Totalal OIFP Expenditures i s for or Fiscalc YYi eara 202006 $28,402,558.37 Less Prior Year Repayment of Non-OIFP Hours --$475,059.58

Total Net OIFP FP Expenditures d res forf r Fiscalis Year 20062 $$27,927,498.797 2 4 .

111 Includes Attorney, Investigator, Professional and Clerical staff working directly for OIFP. 222 Cost of Shared Administrative and Criminal Support provided by DCJ per the FY2006 Cost Allocation Plan. 333 Funds provided to County Prosecutors’ Offices as reimbursement for activities undertaken by those offices in connection with investigating and prosecuting insurance fraud. See N.J.S.A. 17:33A-28. 444 Civil Attorney Staff and Services provided by the Division of Law to litigate OIFP civil cases under the NJ Insurance Fraud Prevention Act. See N.J.S.A. 17:33A-1, et seq. 555 Includes witness transportation to and from trial. 666 Vehicle lease, fuel and maintenance for vehicles used by OIFP Investigators and Prosecutors to do field work and attend court appearances. 777 Includes rental of undercover facilities but does not include cost of building rent for OIFP’s three regional offices which are billed separately by Treasury. Fiscal Year = July 1 through June 30 39

NJ Insurance Industry’s Perspective on Ambulatory Surgical Centers

the patient for proper anesthesia Under this regulatory scheme, several other factors, such as patient safety, recovery before discharge. potential issues may develop. These issues written instructions, written surgical In order to qualify for the “safe may be divided into different compliance policies, written quality assurance pro- harbor,” the ASC must meet several parameters. The first is who is required to grams, and existence and maintenance requirements. The ASC must be a have a license, and how does one of emergency equipment. Medicare certified ASC and must have determine whether the individual or the The potential for insurance fraud in operating and recovery room space entity is improperly operating without a ASCs begins where the regulations end. dedicated exclusively to the ASC. The license? DHSS licenses ASCs under the At the present time, there are no regula- patients referred to the ASC by an Health Care Facilities Planning Act, tions controlling the fees charged by the investor must be fully informed of that N.J.S.A. 26:2H-1, et seq. However, this ASC and the associated providers. investment. Furthermore, the invest- licensure requirement does not apply to a Medicare fees essentially do not apply in ment terms cannot be related to the surgeon’s private practice. the PIP context. This determination was expected volume of referrals. In addi- A private surgical practice is defined at made by the Board based on its interpre- tion, the ASC and other investors cannot N.J.A.C. 8:43A-1.3 which states that to be tation of the Medicare regulations and the loan funds or guarantee a loan to any exempt from DHSS licensure require- Board’s regulations. investor. Also, at least one-third of the ments, a surgical practice must be One could argue that the fee issue physician owner’s medical income for the “established by a physician or physician should be controlled by the Board’s last 12 months must be from ASC professional association surgical practice regulation found at N.J.A.C. 13:35- procedures. Finally, any ancillary services solely for his/her/their private medical 6.17(h)(5) which reads: may not be separately billed. practice.” N.J.A.C. 8:43A-1.3. Also, a A licensee who owns or practices in Under the regulations, the ASC private practice must have only one dedicated operating room. If the premises used for the performance of must fall within one of the following personal medical services including, four categories: operating room is not used “solely” for the practice of the owners, it is not a but not limited to, ambulatory surgery a. Surgeon-owned ASC; surgical practice, and it must be licensed. services but not holding a Certificate b. Single-specialty ASC of Need (License) from the State This leads to the issue of charging Department of Health, shall not c. Multi-specialty ASC; facility fees for unlicensed ASCs operating charge, or permit or condone a charge d. Hospital/physician-owned ASC. as a private surgical practice. If the surgical or “facility fee” separate from the fee practice is not subject to the licensing There are very specific regulations for each for professional services. A facility fee jurisdiction of DHSS, then the BME may, however, be charged by a licensee of these categories. The most common regulation limiting facility fees arguably and most troublesome for PIP carriers is who is a registered Medicare provider applies. But, as will be seen later, this of surgical services, who is billing the multi-specialty ASC. For multi- regulation is ambiguous. Also, under the specialty ASCs, all investors must either pursuant to criteria for such fee federal “safe harbor” provisions, the established by rules of the United be physicians in a position to refer provider must be a Medicare registered patients to the entity and perform States Department of Health and surgeon. Since Medicare only allows Human Services. procedures on those patients, or investors certain listed surgical procedures to be not employed by the ASC. In addition, at performed at ASCs, the same should The common understanding of least one-third of the procedures apply in the PIP context. this provision is that no facility fee is performed by physician investors in the allowed unless the facility and provider previous 12 months must have been There are also several other issues qualify under the federal “safe harbor” performed at an owned ASC. that arise in this context. For example, the provisions. More importantly, one could physician must be privileged to perform clearly argue that under this BME Where the Fraud Begins “that surgery” or special procedure by a regulation, the Medicare fee schedule The New Jersey Board of Medical hospital, or, if not by a hospital, then should apply. However, there is also a Examiners (BME) recognizes the federal directly by the BME. N.J.A.C. 13:35- Board decision that is widely circulated “safe harbor” for physician owners in 4A.6(a). The BME regulations at N.J.A.C. that specifically speaks to the above New Jersey and has taken additional steps 13:35-4A.1, et seq. also impose require- underlined language as follows: to regulate ASCs. However, the ASC itself ments on physicians who perform The Committee advises that the is regulated by the Department of Health “surgery” or “special procedures” in an emphasized phrase should be and Senior Services (DHSS) rather than “office setting.” In that provision, each understood to mean that the facility/ the BME. Therefore, under the current term is defined and “minor surgery” is medical office is, in fact, staffed and system, DHSS regulates the facility while specifically excluded. Finally, there are equipped to meet Medicare standards. the BME regulates the practitioners. also extensive regulations that control 50

New Jersey Legislature Takes Aim at Fraud and Abuse in the Medicaid Program

State government funds.3 The NJFCA The Attorney General may, for good the NJFCA and the action is based upon encompasses claims made for any cause shown, request that the court the facts underlying a pending Attorney government funded contract or program. extend the time during which the General investigation, upon 30 days Violators may be liable for three times the complaint remains under seal. The written notice to the person bringing the State’s damages, plus civil penalties of extension motions must be supported by lawsuit, the Attorney General may take $5,000 to $10,000 per false claim, which is affidavits or other submissions in camera. over the action on behalf of the State. the amount currently allowed under the Under A3428, the Attorney General is Once the Attorney General receives the federal False Claims Act, plus any limited to three motions of no more complaint, the Attorney General has 60 4 adjustments for inflation. than a 90-day period for each extension, in days, plus any extensions granted, to file a A civil action may be brought by the effect maxing out any extensions at 270 pleading with the court indicating the Attorney General or a private person for days in total. However, the federal False Attorney General’s intention to either violations of the NJFCA. Claims Act does not contain a time limit proceed with the action or decline to on extensions, but requires that good proceed with the action. If the Attorney Civil Action by the Attorney General cause be shown for an extension of the General proceeds with the action, the The Attorney General is charged with seal. Senate bills S360 and S1829 mirror Attorney General will have primary investigating violations of the NJFCA. If the federal False Claims Act. responsibility for prosecuting the action, the Attorney General finds that a The time limit on extensions is an but the person bringing the action will violation of the NJFCA has occurred, the important distinction between the have the right to continue as a party to the Attorney General may file a civil action. Assembly and the Senate bills. Although action. If the Attorney General declines to Civil Action by Private Persons (qui tams) the proposed legislation allows for civil proceed with the action, the seal will be suits, in reality, many of these cases filed lifted and the person bringing the action In order to recover stolen funds, the under seal will be referred to the criminal may proceed with the action. After the qui tam or whistle blower provisions of division of the Attorney General’s Office, complaint is unsealed and served on the the NJFCA allow private persons with the Division of Criminal Justice (DCJ), defendant, the defendant shall file an evidence of fraud against State funded for criminal investigations. It is vitally answer to the complaint in accordance contracts and programs to sue on behalf important for DCJ to have the flexibility with the rules of the court. of the person and the State. However, the to conduct thorough investigations. action must be brought in the name of With notice to the person bringing the Often times, such investigations are long the State of New Jersey. The person must action and an opportunity for that person term investigations which may be immediately serve the complaint and a to have a hearing, the Attorney General adversely impacted by a time limit. written disclosure of substantially all may move to dismiss the action for good material evidence and information the The person bringing the action may cause shown. No other person may person possesses upon the Attorney voluntarily dismiss the action, with (1) the intervene in the private person’s action General. The complaint will be sealed for written consent of the Attorney General brought under the NJFCA, except the up to 60 days and will not be served on explaining why the Attorney General State, and no other person may bring a the defendant until service on the consented, and (2) the approval of the related action based on the facts underly- defendant is ordered by the court. court. If a person brings an action under ing the pending NJFCA action.

3. More specifically, the proposed NJFCA provides that a person violates the NJFCA if he: a. Knowingly presents or causes to be presented to an employee, officer or agent of the State, or to any contractor, grantee, or other recipient of State funds, a false claim for payment or approval; b. Knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the State; c. Conspires to defraud the State by getting a false claim allowed or paid by the State; d. Has possession, custody, or control of public property or money used or to be used by the State and knowingly delivers or causes to be delivered less property than the amount for which the person receives a certificate or receipt; e. Is authorized to make or deliver a document certifying receipt of property used or to be used by the State and knowingly makes or delivers a receipt that falsely represents the property used or to be used; f. Knowingly buys, or receives as a pledge of an obligation or debt, public property from any person who lawfully may not sell or pledge the property; or g. Knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the State. 4. Under certain circumstances, where the defendant cooperates before he is aware of an existing investigation, the court may reduce the treble damages to not less than twice the amount of damages which the State sustains and may waive the civil penalty. 54

New Jersey Legislature Takes Aim at Fraud and Abuse in the Medicaid Program

Financial Incentive to the State nating the anti-fraud efforts of all Medicaid 4. recovering improperly expended In the Deficit Reduction Act of 2005 funded state agencies. These efforts are Medicaid funds, imposing adminis- (DRA), Congress gave the states a financial currently divided amongst various divisions trative sanctions, damages or incentive to pass a state false claims act. and sections in the Department of Human penalties, negotiating settlements, Section 6031 of the DRA provides the state Services (DHS) and the Department of and developing an effective third a 10% increase in the state share of any Health and Senior Services (DHSS). Under party liability program. recovery. Medicaid is a state administered the MPIPA, these efforts would be health insurance program funded by both consolidated in the OMIG. Reporting the state and federal government. If, for Under the Act, the Medicaid Inspector example, the state and federal government Location General (Inspector General) shall report the each pay 50% of the cost of the program, Although the Office of the Medicaid findings of audits, investigations, and under the DRA provision, the state would Inspector General will be located within reviews performed by the office and issue receive 60% and the federal government the Department of Human Services recommendations for corrective or remedial (DHS), the office will be independent of action to the Governor, the President of 40% of any recovery. The state would pay 5 the relator, the person filing the suit on any supervision or control by DHS. Once the Senate, the Speaker of the General behalf of the state, between 10% to 15% of established, the OMIG will be the single Assembly, and the entity at issue. The the recovery, thus negating the differential State office responsible for Medicaid Inspector General shall also monitor the provided by the financial incentive. The state program integrity. DHS will continue to implementation of those recommenda- will benefit from the DRA provision if the operate as the single State agency respon- tions. The Inspector General would be law results in cases that would have sible for the general administration, required to provide periodic reports to the otherwise gone undetected. Nonetheless, if setting of policies, and oversight of the Governor and to issue an annual report to the Attorney General brings the suit on Medicaid program. the Governor and to the Legislature. behalf of the State, Section 6031 of the Areas of Responsibility Non-Lapsing Revolving Fund DRA does provide an increased recovery to The MPIPA sets forth various areas of The MPIPA would establish a our Medicaid program. responsibility for the OMIG including: “Medicaid Fraud Control Fund” as a non- II. Medicaid Program 1. general functions, duties, powers, lapsing revolving fund in the Department Integrity and Protection Act and responsibilities; of Treasury. The fund shall be comprised The Medicaid Program Integrity and of an annual $3 million appropriation 2. ensuring compliance with appli- and monies recovered under the MPIPA. Protection Act (MPIPA) would centralize cable Medicaid standards and fraud recovery efforts by establishing an Funds from the Medicaid Fraud Control requirements, identifying and Fund must be used by the Inspector independent Office of Medicaid Inspector reducing fraud and abuse, and General (OMIG). The OMIG would be General and the Medicaid Fraud Control improving efficiency and effective- Unit for the exclusive purpose of responsible for preventing, detecting, and ness of Medicaid; investigating fraud and abuse and coordi- investigating and prosecuting Medicaid 3. investigating allegations of Medicaid fraud claims. fraud and abuse and enforcing applicable laws, rules, regulations, 5. The MPIPA was partially vetoed by the and standards; and Governor and returned to the Legislature with revisions, the most significant being the removal of the OMIG from DHS to the Office of the Inspector General.

John Krayniak, an Assistant Attorney General, is an 18-year veteran of the Division of Criminal Justice and has been the Chief of OIFP’s Medicaid Fraud Control Unit for 13 years. He previously served for eight years as a Deputy District Attorney in the Los Angeles County District Attorney’s Office.

Sherry L. Wilson is a Deputy Attorney General in OIFP’s Medicaid Fraud Control Unit. She previously represented the State of New Jersey in criminal appeals and has over ten years of litigation experience.

Closing the Loopholes on Insurance Fraud

of fact are absolutely protected.4 Whether might be all that is required of a plaintiff. that if there had been no interference a false statement is one which could Trade libel is similar to defamation. there was a reasonable probability that constitute defamation is a question of law Trade libel exists when a false statement the victim of the interference would which is decided by the judge, not a jury. casts aspersions on one’s business have received the anticipated economic In making this determination, courts operation, even if it does not defame an benefit.’... Malice... means that harm consider three factors. First, courts individual’s character. Nonetheless, one was inflicted intentionally and without consider the fair and natural meaning of statement can form the basis for both tort justification or excuse.... The conduct the statement. Generally, words that claims, and in the context of statements must be both ‘injurious and transgres- accuse a person of committing a crime sive of generally accepted standards of concerning potentially fraudulent conduct 11 (except those in connection with litiga- in a commercial setting, that would likely common morality or of law.’ tion) and words that subject a person to be the case. To prove trade libel, the A hypothetical illustrates how these contempt or disparage the person’s 5 plaintiff needs to prove that defendant tort claims, or other similar claims, might reputation are considered defamatory. made a false statement derogatory to be applicable in the fraud information Second, courts consider whether the plaintiff’s business, of a kind calculated to sharing context. As a result of facts statement is one of fact or opinion. interfere with his relations with others; gathered in an investigation, a carrier Statements of pure opinion, as a matter that defendant communicated the suspects that a doctor may be committing of constitutional law, cannot constitute statement to a third party; that the health care claims fraud. In an effort to defamation, while opinion statements statement played a material and substan- further the investigation, the carrier shares that imply the existence of underlying tial part in leading others not to deal with with other carriers a summary version of “facts” which are false and defamatory the plaintiff; that defendant knew the some of the underlying facts and its 6 may be actionable. Third, the courts statement was false or made it with conclusion that the facts indicate that the consider the listener’s reasonable interpre- reckless disregard for whether it was false; doctor may be committing claims fraud. tation of the statement in the context in and that the statement caused plaintiff This information sharing could well be which it was made to determine whether pecuniary damages. Damages are not beneficial to all companies. The referring the statement was capable of a defama- presumed in trade libel cases, as they can be carrier may be seeking information to help 7 tory meaning. in defamation cases involving statements confirm or refute its suspicions. For With respect to the element of fault deemed libelous as a matter of law.10 example, the other carriers may have which the plaintiff must establish, New Finally, an action for tortious interfer- claims information which would help Jersey has imposed the “actual malice” ence with existing contractual relations or establish a pattern of suspect behavior. standard when a statement is made by a with reasonably anticipated business Or, the other carriers may have conducted member of the media and concerns either relations could be brought in response to interviews with patients that would help a business which affects the public’s health the sharing of information about potential establish or dispel the referring carrier’s and safety or a business which is subject suspicions. The information sharing may 8 fraud among carriers who have or may have to substantial government regulation. business relations with the subject. be beneficial to the other carriers as well, as To satisfy the actual malice standard, the they would be alerted to the possibility plaintiff must establish by clear and To prove its claim, plaintiff must that the doctor is submitting fraudulent convincing evidence that the defendant show that it had a reasonable expecta- claims to them. As a result, those carriers published the statement knowing that it tion of economic advantage that was would begin to scrutinize claims from was false, or with reckless disregard for lost as a direct result of defendants’ that doctor, and send them to their whether it was false.9 It appears to be an malicious interference, and that it Special Investigations Unit (SIU) rather open question whether the courts would suffered losses thereby. Causation is than processing them for payment in the require the plaintiff to show actual malice demonstrated where there is ‘proof normal course. when a statement about such a business is made by a private entity rather than by the media. Also, while there are good 4. Ward v. Zelikovsy, 136 N.J. 516, 530 (1994). arguments that a health care provider’s 5. DeAngelis, supra, 180 N.J. at 13. business both affects public health and Id. at 14; Ward, supra, 136 N.J. at 531. safety and is subject to substantial 6. regulation, it might be more difficult to 7. DeAngelis, supra, 180 N.J. at 15. argue that other types of businesses 8. Turf Lawnmower Repair v. Bergen Record Corp., 139 N.J. 392, 413 (1995), cert. den. 516 U.S. 1066 which might be the subject of possibly (1996). defamatory anti-fraud statements are 9. DeAngelis, supra, 180 N.J. at 13. similarly matters of public importance. If 10. Patel v. Soriano, 369 N.J. Super. 192, 248 (App. Div.), certif. den. 182 N.J. 141 (2004). not, then the mere negligence standard 11. Lamorte Burns & Co. v. Walters, 167 N.J. 285, 305-06 (2001) (internal citations omitted). 60 The doctor in question may then Existing Immunity Provisions experience certain consequences as a result The free flow of information and the of this information sharing, such as an expression of opinions, even harsh and interruption or diminution of his or her critical ones, play crucial roles in advancing cash flow, a delay in being approved as a important societal interests. Balancing the provider by a carrier, or other conse- value of free communication with the quences. In addition, the increase in the need for the State to provide redress to its number of claims being scrutinized by citizens whose reputations have been various SIUs would result in additional falsely tarnished, the New Jersey Supreme patients or other associates being Court has recognized both an absolute contacted and interviewed about poten- privilege and a qualified privilege in tially fraudulent claims. In response, the defamation-related actions. doctor may sue the referring carrier for making the statements to the other Although defamatory, a statement will carriers, alleging that the statements were not be actionable if it is subject to an false and defamatory, constituted trade absolute or qualified privilege. A libel, or tortiously interfered with existing statement made in the course of or potential economic relations with his judicial, [quasi-judicial,] administrative, associates and his patients. This list is not or legislative proceedings is absolutely privileged and wholly immune from meant to be exhaustive, and the doctor’s 13 lawyers may well pursue additional legal liability. theories. But it is sufficient to illustrate The absolute privilege applies to any the risks which have caused some carriers communication made in judicial, quasi- to refrain from sharing information about judicial, or administrative proceedings, by potentially fraudulent conduct directly litigants or other authorized participants, with other carriers.12 to achieve the objects of the litigation, and that have some connection or logical Because such information sharing 14 serves the public good by furthering the relation to the action. The absolute fight against insurance fraud, the law privilege is not limited to statements provides, in various places, immunities made in the courtroom or during the from civil liability for statements made in actual administrative proceeding itself. It the course of reporting fraud to govern- extends to all statements or communica- ment agencies or sharing information tions which have some connection or about potential fraud with other industry logical relation to the proceeding. Whether the privilege applies is a question actors. Nonetheless, as discussed below, 15 each of these immunities has its own of law to be decided by the judge. limitations which must be kept in mind. The requirement that the statement has some connection or logical relation to a judicial, quasi-judicial, or administrative proceeding has particular relevance in the context of anti-fraud information sharing.

12. See e.g., Yourman v. People’s Security Life Ins. Co., 992 F. Supp. 696 (D.N.J. 1998) (plaintiff sued insurer for defamation when insurer wrote to the Department of Banking and Insurance (DOBI) responding to plaintiff’s complaint. The letter recounted the facts of plaintiff’s application for coverage, and expressed the opinion that the facts could support an insurance fraud referral); Feit v. Horizon Blue Cross Blue Shield of New Jersey, 385 N.J. Super. 470 (App. Div. 2006) (plaintiff sued for defamation, malicious prosecution, and tortious interference with economic relations when insurer terminated plaintiff’s participating provider agreement and reported the termination to the Board of Medical Examiners); Binkewitz v. Allstate Ins. Co., 222 N.J. Super. 501 (App. Div.), certif. den. 113 N.J. 378 (1988) (plaintiff sued for defamation and tortious interference over statement insurer made in rejecting plaintiff as an adjuster for a fire loss claim). 13. Erickson v. Marsh & McLennan Co., 117 N.J. 539, 563 (1990) (citing Rainier’s Dairies v. Raritan Valley Farms, 19 N.J. 552, 558 (1955)). 14. Hawkins v. Harris, 141 N.J. 207, 216 (1995). 15. Ibid. 61 Closing the Loopholes on Insurance Fraud

In Hawkins v. Harris,16 the Supreme equally unrestricted action under a information about potential fraud Court ruled that the absolute privilege can different label.”21 The Court, however, schemes would be protected by the apply to allegedly defamatory statements ruled that the privilege does not bar a qualified privilege even if the statements made by an insurance company’s investi- malicious prosecution action because the turn out to be false. All insurance carriers gators investigating the circumstances of a exacting pleading and proof requirements share an interest in detecting and prevent- motor vehicle accident which is in for that type of action provide adequate ing insurance fraud. Indeed, auto and litigation, provided the other require- protection to the interest in free access to health carriers are required by law to ments of the privilege are met. How- the courts and administrative agencies, implement State-approved fraud detec- ever, the court ruled that it was unclear while allowing redress to the innocent tion plans and to maintain full-time SIUs whether the investigators’ statements to defendant subjected to a lawsuit which is to investigate possible fraud.26 State- witnesses, alleging that the claimant was itself wrongful.22 ments made between fraud investigators an unfaithful spouse, bore any logical Even if a defamatory statement is not for the purpose of sharing or soliciting relation to the litigation. The Supreme protected by the absolute privilege, it may information relevant to a potential fraud Court remanded the matter to the trial be protected by the qualified privilege. would be appropriate communications 17 court to decide that issue. The New Jersey Supreme Court has made to further the legitimate interests of In Devlin v. Greiner,18 a husband defined the qualified privilege as follows: all concerned. Therefore, such good faith statements would be privileged from tort hired a private investigator to follow his A communication ‘made bona fide wife. The investigator gave the husband a suits. Nonetheless, plaintiffs can seek to upon any subject matter in which the defeat the privilege by showing that the report saying the wife regularly met with party communicating has an interest, another man in compromising circum- statement was made with knowledge that or in reference to which he has a duty, it was false or in reckless disregard to its stances. Two months later, the husband is privileged if made to a person having sued for divorce. The wife sued the falsity. While the plaintiff bears a heavy a corresponding interest or duty, burden of proof on this issue, still, carriers investigator for defamation. The court although it contains criminatory matter ruled that there was a factual question would be required to incur litigation which, without this privilege, would be expenses in responding to such a claim. whether an investigative report issued two slanderous and actionable[.]’23 months before litigation commenced was sufficiently connected to a judicial proceed- The qualified privilege provides less The Insurance Fraud Prevention ing to be absolutely privileged. The court protection than the absolute privilege Act and the Motor Vehicle Theft therefore denied a motion to dismiss, and because the qualified privilege can be and Motor Vehicle Insurance stated the immunity claim could be overcome if the plaintiff can prove by Fraud Reporting Immunity Act 19 clear and convincing evidence that the revisited following discovery. Therefore, The Insurance Fraud Prevention Act the absolute privilege would not apply to speaker knew the defamatory statement was false or acted in reckless disregard of its provides: anti-fraud information sharing among 24 carriers when that information sharing is falsity. If the qualified privilege applies, it No person shall be subject to civil protects against all tort theories with the liability for libel, violation of privacy not sufficiently connected to an existing or 25 reasonably contemplated judicial, quasi- exception of malicious prosecution. or otherwise by virtue of the filing of judicial, or administrative proceeding. It would seem clear that statements reports or furnishing of other Even when the privilege does apply, made in a good faith effort to share information, in good faith and insurance carriers may need to undertake without malice, required by this discovery efforts and incur litigation expenses to demonstrate the applicability of the privilege in cases where the 16. 141 N.J. 207 (1995). connection is not obvious. 17. Id. at 219, 222. When the absolute privilege does 18. 147 N.J. Super. 446 (Law Div. 1977). apply, it bars all civil liability theories with 19. Id. at 460. The court did state that if the absolute immunity did not apply, the qualified privilege, the sole exception of malicious prosecu- discussed next, would apply. Ibid. tion.20 The Supreme Court has reasoned 20. Peterson v. Ballard, 292 N.J. Super. 575, 582 (App. Div.), certif. denied 147 N.J. 260 (1996); Ruberton that “[i]f the policy, which in defamation v. Gabage, 280 N.J. Super. 125, 134 (App. Div.), certif. denied 142 N.J. 451 (1995). actions affords an absolute privilege or 21. Ranier’s Dairies, supra, 19 N.J. at 564. immunity to statements made in judicial 22. Ibid. or quasi-judicial proceedings, is really to 23. Marsh & McLennan Co., supra, 117 N.J. at 563 (internal citation omitted). mean anything then we must not permit 24. Id. at 565. its circumvention by affording an almost 25. Binkewitz v. Allstate Ins. Co., supra, 222 N.J. Super. at 516. 62 section or required by [OIFP] as a connection with an insurance transac- result of the authority conferred upon tion unless the disclosure is: it by law.27 .... Thus, carriers enjoy an absolute c. To an insurance institution, agent, immunity from civil liability under any insurance-support organization or theory for good faith statements made to self-insurer, if the information OIFP in the course of a referral or in disclosed is limited to that which is response to any requirement by OIFP. reasonably necessary: Similarly, under the Motor Vehicle Theft and Motor Vehicle Insurance Fraud (1) To detect or prevent criminal Reporting Immunity Act,28 insurers, their activity, fraud, material misrepresentation agents and employees are absolutely or material nondisclosure in connection with insurance immune from “any civil liability in a cause 32 of action of any kind” for releasing transactions[.] information about automobile theft or Information disclosure is also permitted automobile insurance fraud to a govern- to a law enforcement or other government agency.29 Nonetheless, these ment agency to prevent or prosecute an statutory immunities do not on their face illegal act; in response to an administrative extend to information sharing from one or judicial subpoena or order; or as carrier directly to another. otherwise permitted by law.33 Under the act, immunity from civil The Insurance causes of action arising from disclosures Information Practices Act made in accordance with the act is The Insurance Information Practices provided thusly: Act30 regulates insurance companies’ No cause of action in the nature of collection, use, and disclosure of informa- defamation, invasion of privacy or tion in connection with life, health, negligence shall arise against any person disability, and property-casualty insurance. for disclosing personal or privileged The act authorizes insurers to share information in accordance with this act, information about individual, natural nor shall such a cause of action arise persons for anti-fraud purposes with against any person for furnishing other insurers and with insurance support personal or privileged information to organizations. It provides: an insurance institution, agent or An insurance institution, agent or insurance-support organization; except insurance-support organization[31] this section shall provide no immunity shall not disclose any personal or for disclosing or furnishing false information with malice or willful privileged information about an 34 individual collected or received in intent to injure any person.

26. N.J.S.A. 17:33A-15; N.J.A.C. 11:16-6.4. 27. N.J.S.A. 17:33A-9b. 28. N.J.S.A. 17:23-8 et seq. 29. N.J.S.A. 17:23-15. 30. N.J.S.A. 17:23A-1, et seq. 31. “Insurance-support organization” is defined as an entity which regularly collects information about natural persons to provide to carriers for the purpose of detecting or preventing fraud, misrepresentation, or nondisclosure. N.J.S.A. 17:23A-2m. 32. N.J.S.A. 17:23A-13c. 33. N.J.S.A. 17:23A-13f, g, h. 34. N.J.S.A. 17:23A-21. 63 Closing the Loopholes on Insurance Fraud

The most significant limitations on this able anticipation of such a claim for expensive civil litigation, some carriers existing statutory immunity concern the benefits or civil or criminal proceedings.39 have been reluctant to share anti-fraud causes of action which are precluded, and These definitions, and the wording of information directly with other carriers. the definitions of the statutory terms Section 13’s authorization to disclose Therefore, the immunity provision in the “individual,” “personal information,” and information “about an individual” do Insurance Fraud Prevention Act should “privileged information.” The immunity not expressly authorize an insurance be amended to eliminate the gaps in precludes actions “in the nature of ” company to share information about protection. defamation, invasion of privacy, or corporate entities suspected of commit- The Insurance Fraud Prevention Act negligence. This wording raises the question ting fraud. Nonetheless, the act does currently provides immunity from civil of whether some causes of action are not provide immunity for sharing anti-fraud liability in N.J.S.A. 17:33A-9b. That precluded because they are not in the nature information about individuals. Thus, section was adopted as part of the of defamation, invasion of privacy, or while not perfect, the existing law provides original Insurance Fraud Prevention Act negligence. It could certainly be argued, an immunity which carriers can use to share in 1983 and has not been updated since.42 following Binkewitz v. Allstate Ins. Co. and anti-fraud information about individuals It was based on the National Association similar cases discussed above, that if the among themselves, until a more compre- of Insurance Commissioners’ (NAIC) immunity is to serve its purpose, it must hensive provision is adopted. Insurance Fraud Prevention Model Act as bar all theories of recovery except malicious it existed at that time. Nonetheless, the prosecution. But, on the other hand, courts NAIC Insurance Fraud Prevention Model 35 National Insurance Crime Bureau do not lightly extend absolute privileges. Act has been updated several times since This section of the statute has not been Under N.J.S.A. 17:23-19a and its then. In particular, in 1995, the NAIC cited in a reported court decision, and so its implementing regulations, every insurer model act was amended to specifically applicability to theories arguably different transacting automobile insurance must provide immunity for exchanges of from defamation, invasion of privacy, and report thefts of motor vehicles or their information between insurers.43 The negligence remains an open question. major components and losses involving immunity section of the NAIC Insurance motor vehicle salvage to the National The act applies to carriers writing 40 Fraud Prevention Model Act currently insurance that is “primarily for personal, Insurance Crime Bureau (NICB). The reads as follows: insurer, NICB, and law enforcement are family or household needs rather than A. There shall be no civil liability business or professional needs[.]”36 It authorized to cooperate and exchange information. The statute also provides: imposed on and no cause of action regulates the disclosure of information shall arise from a person’s furnishing about an “individual,” which is defined to An insurer, a law enforcement agency, information concerning suspected, mean a natural person who is an insured, or the [NICB], or their agents or anticipated or completed fraudulent 37 an applicant, or a claimant. At least on its employees, shall not be subject to civil insurance acts, if the information is face, it is questionable whether the statute liability in a cause of action of any provided to or received from: provides immunity for sharing informa- kind for conducting an investigation tion about persons who are not them- or providing or receiving any informa- (1) The commissioner or the selves insureds, applicants, or claimants, tion which is required to be reported commissioner’s employees, agents such as medical providers asserting rights under subsection a. of this section.41 or representatives; as assignees of the insured. While providing broad immunity for (2) Federal, state, or local law The statute provides immunity for information shared in cooperation with enforcement or regulatory officials sharing “personal information” and NICB, this immunity provision does not or their employees, agents or “privileged information.” “Personal address information sharing directly between representatives; information” is defined as information carriers without NICB’s involvement. (3) A person involved in the from which judgments can be made about prevention and detection of an individual’s character or characteristics.38 Proposed Amendment to the Insur- fraudulent insurance acts or that That definition seems to contemplate ance Fraud Prevention Act person’s agents, employees or underwriting information, and therefore representatives; or would be relevant in application fraud As discussed above, New Jersey common law and statutory law currently (4) The NAIC or its employees, cases. “Privileged information” is defined agents or representatives. as information which relates to a claim for provide a patchwork of immunity benefits or to civil or criminal proceedings provisions shielding some but not all B. Subsection A of this section shall involving an individual, and which was anti-fraud information sharing from not apply to statements made with gathered in connection with or in reason- potential civil lawsuits. Perhaps as a result actual malice. In an action brought of the gaps in protection from potentially

64 against a person for filing a report or a. [no change.] c. Subsection b. of this section shall furnishing other information b. There shall be no civil liability not apply to statements made with concerning a fraudulent insurance act, imposed on and no cause of action actual malice. In an action brought the party bringing the action shall shall arise from a person’s furnishing against a person for filing a report or plead specifically any allegation that information concerning suspected, furnishing other information Subsection A of this section does not anticipated or completed fraudulent concerning a fraudulent insurance act, apply because the person filing the insurance acts, if the information is the party bringing the action shall report or furnishing the information provided to or received from: plead specifically any allegation that did so with actual malice. subsection b. of this section does not (1) The Office of the Insurance apply because the person filing the C. This section does not abrogate or Fraud Prosecutor, the commissioner or modify common law or statutory report or furnishing the information their employees, agents or did so with actual malice. privileges or immunities enjoyed by a representatives; person described in Subsection A of (2) Federal, state, or local law d. This section does not abrogate or 44 this section. enforcement or regulatory officials modify common law or statutory The immunity provision in New or their employees, agents or privileges or immunities enjoyed by a Jersey’s IFPA has not been updated to representatives; person described in subsection b. of address the shortcomings in the existing (3) A person involved in the this section. version which the National Association prevention and detection of e. [ existing subsection c. redesignated of Insurance Commissioners has fraudulent insurance acts or that as subsection e.] identified over the past 23 years. As a person’s agents, employees or result, the State’s announced public policy representatives; or to “confront aggressively the problem of (4) The National Association of insurance fraud”45 suffers when anti-fraud Insurance Commissioners, the John Kennedy is an Assistant Attorney General serving as a Special Assistant to information sharing is restricted. The National Insurance Crime Bureau, the Insurance Fraud Prosecutor, Legislature should update the immunity an insurance support organization concentrating on civil matters involving provision in the IFPA to incorporate the as defined in N.J.S.A. 17:23A-2, or licensed medical providers. Previously, he recommendations of the NAIC and, in their employees, agents or was Section Chief in OIFP’s criminal division for three years, overseeing all that way, encourage the free yet respon- representatives. criminal prosecutions except Medicaid sible flow of information directly between cases. He has been with the Division of and among persons engaged in the Criminal Justice since 1987. detection and prevention of fraud. Accordingly, OIFP proposes that N.J.S.A. 17:33A-9 be amended to read as follows:

35. See Devlin v. Greiner, supra, 147 N.J. Super. at 456. 36. N.J.S.A. 17:23A-1, -2n (defining “insurance transaction”). 37. N.J.S.A. 17:23A-2j, -13. 38. N.J.S.A. 17:23A-2t. 39. N.J.S.A. 17:23A-2w. 40. N.J.S.A. 17:23-19; N.J.A.C. 11:16-2.1, et seq. 41. N.J.S.A. 17:23-19d. 42. L. 1983, c. 320, sec. 9. 43. 1995-1 NAIC Proceedings 50, 89-90. The model act was also amended at that time to require the plaintiff to plead with specificity any allegations that a false statement was made with actual malice, which is necessary to overcome the immunity. This was done so that the use of notice pleading would not deprive persons reporting fraud of the benefit of immunity by forcing them to engage in discovery to refute an allegation of actual malice. Ibid. 44. NAIC Insurance Fraud Prevention Model Act at sec. 7. 45. N.J.S.A. 17:33A-2. 65

OIFP Criminal Case Notes

AUTO INSURANCE FRAUD that no one was injured. The other defen- informant. The case is pending. dants named in the State Grand Jury indict- Criminal Use of “Runners” On September 8, 2006, Kasim Nash ment were alleged to be the purported insur- pled guilty to conspiracy and Health Care State v. Irwin B. Seligsohn, et al. ance claimants. They were charged with Claims Fraud. Sentencing is pending. Racketeering and conspiracy charges were Health Care Claims Fraud for assisting in the submission of the phony insurance claims. On August 1, 2006, Sharon Blanding was filed against two Essex County lawyers, their arrested on a bench warrant and bail was set law firm, and 28 other individuals as part of The indictment also seeks the forfeiture at $10,000. On September 8, 2006, Blanding an ongoing insurance fraud investigation tar- of an estimated $5 million in financial assets pled guilty to conspiracy and Health Care geting Health Care Claims Fraud and the ille- obtained by the law firm of Goldberger, Claims Fraud. She will be sentenced in 2007. gal use of “runners.” The racketeering and Seligsohn & Shinrod, P.A., as a result of the conspiracy charges represent the first time alleged illegal insurance fraud scheme. The On July 27, 2006, Damon Brown pled the Division of Criminal Justice - Office of indictment seeks proceeds such as invest- guilty to conspiracy to commit racketeering the Insurance Fraud Prosecutor (OIFP) has ments, bank accounts, office equipment, and Health Care Claims Fraud. Brown is used New Jersey’s Racketeering Influenced & real estate, and other assets obtained from pending sentencing in 2007. Corrupt Organization (RICO) statute to engaging in theft by deception, Health Care On June 30, 2006, Alonzo Goulbourne prosecute an attorney and a law firm for Claims Fraud, Criminal Use of Runners, pled guilty to Health Care Claims Fraud. On Health Care Claims Fraud, Criminal Use of and tax fraud. August 1, 2006, the court sentenced him to Runners, and related insurance fraud crimes. Among the persons charged were: three years in state prison. The 20-count superseding State Grand The Lawyers On May 5, 2006, Bobbie Campbell sur- Jury indictment charged Irwin B. Seligsohn, ■ rendered himself to the court and the judge his Essex County law firm, five “runners,” Irwin B. Seligsohn, Esq., was charged with set bail at $35,000. Bobbie Campbell’s case is and 23 phony accident claimants variously conspiracy to commit racketeering, rack- pending trial. eteering, conspiracy to commit Health with criminal racketeering, conspiracy to On April 19, 2006, Janelle Wilson, Iesha commit racketeering, auto insurance related Care Claims Fraud, theft by deception, conspiracy, Criminal Use of Runners, and Harris, and Javiena McDonald pled guilty to Health Care Claims Fraud, Criminal Use of conspiracy and Health Care Claims Fraud. Runners, theft by deception, and tax fraud. filing or preparing a false or fraudulent New Jersey tax return; On June 30, 2006, the court sentenced Wil- was charged with con- son, Harris, and McDonald to two years pro- spiracy and filing or preparing a false or bation, ordered them each to pay a $1,500 fraudulent New Jersey tax return. The super- civil insurance fraud fine and ordered them seding State Grand Jury indictment alleges to perform 50 hours of community service. that the lawyers and their law firm engaged ■ The law firm of Goldberger, Seligsohn & in a scheme of paying “runners” to solicit On April 19, 2006, Pamela Rogers pled Shinrod, P.A, was charged with conspiracy guilty to conspiracy and Health Care Claims and obtain automobile accident clients for to commit racketeering, racketeering, con- the law firm in order to substantially increase Fraud. On June 19, 2006, the court sen- spiracy, theft by deception, Criminal Use tenced her to two years probation and or- the amount of money obtained through in- of Runners, Health Care Claims Fraud, surance claims, lawsuits, and related actions. dered her to pay a $1,500 civil insurance and filing or preparing a false or fraudu- fraud fine. The indictment alleges that, between Oc- lent New Jersey tax return. On April 12, 2006, Patrice Woodson, tober 30, 1993 and September 15, 2005, The “Runners,” Claimants, and Others Irwin B. Seligsohn, and Rhonda Evans, and Angelique Pickett pled ■ the law firm of Goldberger, Seligsohn & Louis Campbell; Edward Campbell a/k/a guilty to conspiracy and Health Care Claims Shinrod, P.A., 735 Northfield Avenue, West Edward Campbell, Jr.; Edward Campbell, Fraud. On June 30, 2006, the court sen- Orange, Essex County, conspired with others Sr., a/k/a Reverend Campbell; Richard tenced Woodson and Pickett to two years to pay “runners” to solicit other individuals Williams; and Damon Brown were probation and ordered them each to pay a to participate in staged automobile accidents charged with conspiracy to commit rack- $1,500 civil insurance fraud fine and perform so that Personal Injury Protection (PIP) and eteering, racketeering, conspiracy, Health 50 hours of community service. On July 12, other insurance claims could be submitted to Care Claims Fraud, theft by deception, 2006, the court sentenced Evans to two insurance companies. Additionally, the in- and Criminal Use of Runners. Edward years probation and ordered her to pay dictment alleges that the defendants improp- Campbell was additionally charged with $2,000 in restitution and a $1,500 civil insur- erly accounted for the payments made to the failure to pay or turn over taxes. ance fraud fine. “runners” and, as a result, it is charged that To date, 12 defendants have entered guilty On February 6, 2006, OIFP investiga- Seligsohn, and the law firm vio- pleas in connection with this alleged illegal tors arrested Edward Campbell, Sr., a/k/a lated various New Jersey tax statutes. scheme. The remaining defendants’ cases are Reverend Campbell. The arrest was predi- The indictment charges the “runners” with pending trial. Among the developments in cated on the fact that the court issued a illegally receiving payments for acting as this case during 2006 were: bench warrant on January 17, 2006, for “runners” by soliciting clients, with violating On September 19, 2006, Louis Campbell Campbell’s failure to appear at a pre-arraign- State income tax laws, and with assisting in was arrested by OIFP investigators and ment conference on the racketeering indict- the submission of phony insurance claims charged with tampering with a witness and ment. Campbell was arrested at the office of knowing that the accidents were staged and his probation officer. Campbell had been 70

OIFP Criminal Case Notes

Fraudulent PIP Insurance Claims Insurance Company, and Ohio Casualty In- Fraudulent Automobile “Give Up” by Health Care Providers surance Company totaling $65,153. The in- and Theft Claims surance companies did not pay any of the 16 State v. Franca DiLisio, et al. State v. Harry J. Torella PIP claims and some of the cases are pend- A State Grand Jury returned two indict- ing in civil court and/or arbitration. Marie On January 6, 2006, the court admitted ments charging Dr. Franca DiLisio, a licensed Amay and were previously ad- Harry J. Torella into the Pretrial Intervention chiropractic physician, and seven others with mitted into the Pretrial (PTI) Program1 and (PTI) Program conditioned upon him paying Health Care Claims Fraud, Criminal Use of ordered to each perform 50 hours of com- $1,166 in restitution and paying a $5,000 civil Runners, theft, and attempted theft by de- munity service. A bench warrant was issued insurance fraud fine. Torella pled guilty to an ception. DiLisio was also charged with mis- for Pierre’s arrest. He is currently a fugitive. Accusation charging him with Insurance conduct by a corporate official. All the On June 14, 2006, DiLisio pled guilty to Fraud. Torella allegedly knowingly reported to charges arise from allegations that the defen- theft. On July 27, 2006, the court sentenced the Island Heights Police Department and dants staged accidents for the purpose of her to two years probation and ordered her Prudential Insurance Company that someone submitting phony PIP insurance claims to to pay $3,400 in restitution to Allstate Insur- stole his 1997 Chrysler Sebring, knowing that five insurance carriers, or that automobile ance Company. The criminal cases as to the the car was not stolen. Torella allegedly re- insurance companies were billed for bogus remaining defendants are pending trial. ported the false theft so that he could file a chiropractic treatments. fraudulent auto theft insurance claim. State v. Eugene Williams a/k/a Carroll Williams The State alleged in the first indictment State v. Sandra Rodriguez, et al. that, between May 1,1998 and October 4, On August 21, 2006, an Essex County Grand Jury returned an indictment charging On November 6, 2006, Jonathan 2000, Franca DiLisio arranged staged acci- Rodriguez pled guilty to arson. On Decem- dents with the assistance of “runners” Eugene Williams, a/k/a Carroll Williams, with Health Care Claims Fraud and con- ber 8, 2006, the court sentenced him to 120 Gerard Blanc and Rolando Pierre. A “runner” days in county jail and ordered him to pay a is a person who is paid to procure patients or spiracy. According to the indictment, on Feb- ruary 10, 2000 and September 5, 2001, Will- $5,000 civil insurance fraud fine. On January clients for licensed professional service pro- 13, 2006, the court sentenced Sandra viders so that insurance claims can be submit- iams conspired with others to commit health care claims fraud. The State alleged that Wil- Rodriguez to one year probation and ordered ted. The State alleged that the accidents were her to pay a $5,000 civil insurance fraud fine. staged so DiLisio could treat the occupants of liams, a chiropractic physician licensed in the State of New Jersey, practiced chiropractic Sandra Rodriguez pled guilty to arson with the vehicles for injuries they never sustained, purpose to collect insurance proceeds. and then bill insurance carriers for PIP insur- medicine at the LaGuardia Primary Health ance claims. The defendants submitted claims Care Center in East Orange, and submitted A Cumberland County Grand Jury re- to Allstate Insurance Company, Selective In- health care insurance claims on behalf of turned an indictment charging Sandra surance Company, G.U.F.A.C. Insurance Com- four purported patients. The purported pa- Rodriguez and her nephew, Jonathan pany, and Colonial Penn Insurance Company tients were undercover Newark police offic- Rodriguez, with conspiracy, aggravated ar- for chiropractic treatments on 302 separate ers and undercover OIFP investigators. The son, attempted theft by deception, tampering dates when the “patients” had not even ap- State alleged that Williams caused PIP bills with public records or information, arson, peared for the treatments. The claims totaled to be submitted to Parkway Insurance Com- and falsifying records. According to the in- approximately $36,380, of which $3,435 was pany for chiropractic and other services not dictment, Sandra Rodriguez and Jonathan paid by insurance carriers. rendered to the purported patients in the ap- Rodriguez allegedly conspired to dispose of a proximate amount of $21,481. Parkway 2002 Chevrolet Cavalier and submit a false In the second indictment, the State paid approximately $19,494 of those PIP automobile insurance theft claim. charged Marie Amay, Mimose Pierre, and insurance bills. with Health Care Claims Fraud The State alleged that Sandra Rodriguez and attempted theft by deception for acting LaGuardia Primary Health Care Center falsely reported to the Vineland Police De- as passengers in staged accidents and generat- was a chiropractic medical facility owned partment that someone stole her Chevrolet ing phony medical treatment claims. DiLisio and operated by Dr. LeClerc Addison. Cavalier. She also allegedly reported the theft allegedly submitted 16 PIP insurance claims Addison previously was sentenced to five to Rutgers Casualty Insurance Company. The for these defendants to Allstate Insurance years probation conditioned on serving 364 State further alleged that Jonathan Company, Selective Insurance Company, Co- days in county jail as part of OIFP’s investi- Rodriguez took the Chevrolet Cavalier from lonial Penn Insurance Company, Crawford gation of PIP fraud. Sandra Rodriguez and set it on fire in Buena

1. Pretrial Intervention (PTI) is a diversionary program created by statute and court rule. The Legislature established that it is the public policy of the State to divert certain defendants from the criminal justice system when, among other factors, diversion will serve to remove cases from the criminal court in order to focus resources on more serious matters or more dangerous defendants, or PTI supervision will suffice to deter that particular defendant from future criminality. N.J.S.A. 2C:43-12a. A defendant is admitted to PTI upon the recommendation of the PTI program director and the consent of the prosecutor. The program director and the prosecutor are required to consider, and base their decisions on, the defendant’s amenability to correction, responsiveness to rehabilitation, and the nature of the offense. Id. at -12b,e; PTI Guideline 3. If a defendant is admitted to PTI, the criminal prosecution is suspended while the defendant undergoes the supervision or rehabilitation required by the PTI program staff. The judge may order restitution as part of the PTI program. If the defendant successfully completes the program, the criminal charge is dismissed. If the defendant fails to complete the program, the criminal prosecution resumes. N.J.S.A. 2C:43-13; R. 3:28. 72 Vista Township so that a claim could be sent Carlos Manuel Patela and Rui Alberto Dias to Rutgers Casualty. Rutgers Casualty denied with conspiracy to commit theft by decep- the automobile theft insurance claim and re- tion. According to the indictment, Patela ferred the matter to OIFP for investigation. and Dias took possession of a 1985 State v. Monique S. Everett, et al. Chevrolet Corvette knowing that the owner of the Corvette had reported the car stolen A Passaic County Grand Jury returned an to his insurance company. indictment charging Monique S. Everett, Javin Ward, James Westfield, and Robert The car was reported stolen to the insur- Wayne Williams with conspiracy and theft by ance company in order that a phony automo- deception. The State also charged Everett bile theft insurance claim could be filed by with tampering with public records or infor- the owner of the vehicle. Sentry Insurance mation. According to the indictment, Company paid the owner $7,083 as reim- Westfield and Everett allegedly “gave up” a bursement for the purportedly stolen car. 2000 Mitsubishi Mirage valued at $10,149 to The owner of the car was not charged in the Williams and Ward. Westfield and Everett indictment because he had previously been allegedly “gave up” the car to Williams so prosecuted in Essex County for the phony that it could be concealed from law enforce- State v. Maria Kernizan, et al. automobile insurance theft claim. ment and they could submit a false insurance On March 8, 2006, the court admitted On July 31, 2006, Dias pled guilty to con- claim. Later, the car was allegedly reported Maria Kernizan into the PTI Program condi- spiracy. On October 16, 2006, the court sen- stolen to Encompass Insurance Company and tioned upon her performing 60 hours of tenced him to three years probation and or- the phony auto theft claim was submitted. community service and paying a $5,000 civil dered him to perform 100 hours of commu- Williams was subsequently arrested in pos- insurance fraud fine. On February 22, 2006, nity service. On October 23, 2006, Patela session of the 2000 Mitsubishi Mirage by the the court admitted her son, Loubert pled guilty to conspiracy. On December 11, Montville Police Department. Barthelemy, into the PTI Program condi- 2006, the court sentenced him to two years Everett previously pled guilty to conspiracy tioned upon him paying a $5,000 civil insur- probation and ordered him to pay $7,083 in to commit theft by deception. The court ad- ance fraud fine and performing 60 hours of restitution to Sentry Insurance Company. mitted her into the PTI Program conditioned community service. Kernizan and Patela was also ordered to perform 50 hours upon her paying $1,018 in restitution to En- Barthelemy pled guilty on January 9, 2006, of community service. compass Insurance Company and performing to conspiracy to commit theft by deception. State v. Steven Garcia 75 hours of community service. Williams also A Union County Grand Jury returned an Following a probation violation, the court pled guilty to conspiracy. On February 28, indictment charging Kernizan and Barthelemy terminated Steven Garcia’s probation and 2006, the court sentenced him to three years with conspiracy, attempted theft by decep- sentenced him on February 10, 2006, to four in state prison and ordered him to pay $1,018 tion, and Insurance Fraud. According to the years in state prison. The court had sen- in restitution to Encompass Insurance Com- indictment, Kernizan and Barthelemy alleg- tenced Garcia to three years probation and pany. On January 17, 2006, Javin Ward pled edly conspired to submit a phony automobile ordered him to pay a $1,000 criminal fine af- guilty to conspiracy. On May 9, 2006, the theft claim to Clarendon National Insurance ter he pled guilty to attempted theft by de- court sentenced him to probation for one year Company. The State alleged that Kernizan ception. A Union County Grand Jury had re- and ordered him to pay $1,018 in restitution. submitted an Affidavit of Theft to Clarendon turned an indictment that charged Garcia On January 17, 2006, James Westfield also National Insurance Company claiming that with attempted theft by deception, tamper- pled guilty to conspiracy. On the same day, the she last saw her 1993 Toyota 4-Runner in ing with public records or information, and court admitted him into the PTI Program Elizabeth on December 31, 2002. OIFP’s in- false swearing. According to the indictment, conditioned upon him paying $1,143 in resti- vestigation revealed that Kernizan and Garcia allegedly submitted a fraudulent sto- tution and performing 75 hours of commu- Barthelemy allegedly falsely reported to the len vehicle insurance claim to First Trenton nity service. New York City Police Department that some- Indemnity Company. Garcia allegedly re- State v. Manuel Molina one stole the car on that date. Additional in- ported that someone stole his 1999 Ford F- On March 9, 2006, the court sentenced vestigation revealed that the New York De- 150 pickup truck. The truck was subse- Manuel Molina to three years probation and partment of Sanitation tagged the vehicle as a quently recovered in a garage in Lebanon, ordered him to pay a $5,000 civil insurance derelict or abandoned vehicle in the Bronx on Pennsylvania. An investigation revealed that fraud fine. On January 25, 2006, Molina pled December 25, 2002, casting doubt on Garcia had been paying rent to keep the guilty to an Accusation charging him with Kernizan’s and Barthelemy’s alleged claim that truck in Pennsylvania. First Trenton, sus- Insurance Fraud. Molina admitted that he the vehicle was last seen and stolen on or af- pecting fraud, denied the claim and referred falsely reported to the Newark Police De- ter December 31, 2002. Clarendon National the matter to OIFP for investigation. partment and Allstate Insurance Company denied the claim and referred the matter to State v. Raymond Delgaudio OIFP for investigation and prosecution. that his 1997 Dodge Caravan had been sto- On May 26, 2006, the court admitted len in order to file a false insurance theft State v. Carlos Manuel Patela, et al. Raymond Delgaudio into the PTI Program. claim. In fact, Molina knew that his Dodge On March 9, 2006, an Essex County On March 27, 2006, Delgaudio pled guilty to Caravan had not been stolen. Grand Jury returned an indictment charging an Accusation charging him with Insurance 73 OIFP Criminal Case Notes

Fraud. Delgaudio allegedly admitted that he charged Fleischman with Insurance Fraud, stolen cars would be re-tagged and sold for filed a fraudulent stolen vehicle report with attempted theft by deception, tampering far below market value. Many of the cars the Demarest Police Department, claiming with public records or information, and false were sold through use of the internet on that his 2002 Jeep Grand Cherokee had been swearing. According to the indictment, be- eBay to innocent purchasers located nation- stolen out of his driveway. He subsequently tween November 1, 2003 and February 19, wide after they were stolen and re-tagged. allegedly submitted a fraudulent stolen ve- 2004, Fleischman allegedly submitted a These innocent purchasers face the risk of hicle claim to First Trenton Indemnity Com- phony auto insurance theft claim to Liberty losing the cars they purchased. pany, knowing that his vehicle had not been Mutual Insurance Company. The State al- An automobile “give up” claim, also stolen. First Trenton, suspecting fraud, de- leged that Fleischman advised Liberty Mu- known as an owner-initiated phony insur- nied the claim and referred the matter to tual and the Edison Police Department that ance theft claim, occurs when the owner of OIFP for investigation. someone stole her 2000 Chrysler Sebring an automobile voluntarily “gives up” the car State v. Luisa Escobar-Echeverry, et al. while she was shopping at the Menlo Park to another for disposal and then submits a Mall on December 5, 2003. An investiga- On May 10, 2006, the court admitted false automobile insurance theft claim as if tion revealed that the Bureau of Fire Inves- the car had been stolen. The owner is paid Luisa Escobar-Echeverry into the PTI Pro- tigations of the New York City Fire De- gram and ordered her to pay a $3,000 civil for the purported theft by his insurance com- partment discovered the car burning in pany and the car can be re-tagged and sold. insurance fraud fine. Escobar-Echeverry pre- Brooklyn on November 27, 2003, casting viously pled guilty to an Accusation charging doubt on Fleischman’s alleged claim that A car is re-tagged when the Vehicle Identi- her with Insurance Fraud. On May 9, 2006, her car had been stolen. Fleischman alleg- fication Number (VIN) plates are removed the court admitted Escobar-Echeverry’s boy- edly submitted a phony auto insurance theft from the car so that the VIN can be changed friend, Allex Angel, a/k/a Jans Londano, claim for $12,932. Liberty Mutual denied to a VIN that does not correspond to a sto- into the PTI Program and ordered him to the claim and referred the matter to OIFP len car. In that way, the true identity of the pay a $2,500 civil insurance fraud fine. Angel for investigation. car and the fact that it had been reported previously pled guilty to a separate Accusa- stolen can be concealed, and the car can be tion charging him with conspiracy. The State This indictment is among the first in sold to an innocent purchaser, or otherwise alleged that Escobar-Echeverry falsely re- which the new crime of Insurance Fraud, disposed of. ported her 2003 Toyota stolen to the Union which became effective June 9, 2003, was used to charge a person who submitted a Through investigation, which included co- City Police Department and that she had ar- ordination with law enforcement in Pennsyl- ranged with Angel to dispose of the vehicle false automobile theft claim. The trial judge in Middlesex County dismissed the Insurance vania and New York, OIFP uncovered evi- because she could no longer afford the car dence that automobile owners had “given payments and the insurance payments. She Fraud count on August 4, 2005, on the ground that the State did not or could not up” their cars so that they could be falsely also allegedly submitted a phony vehicle reported stolen to insurance companies and theft claim to Allstate Insurance Company. offer evidence of five or more acts of insurance fraud within the meaning of the statute insurance claims could be submitted, as well On the same day the vehicle was reported as evidence that members of a gang stole stolen, it was found on fire in Pennsylvania. in order to elevate the charge to a second degree Insurance Fraud offense. Thus, accord- cars from a large auto mall (auto dealer- Angel allegedly paid $400 to another person ship), as well as from other car dealerships to dispose of the car. ing to the trial judge, the count was not properly charged as a second degree crime. and locations. OIFP’s investigation in- State v. Randi Fleischman On March 20, 2006, the State petitioned the volved an extensive covert infiltration of On November 29, 2006, the New Jersey Supreme Court to review the case. the several conspiracies, employment of electronic surveillance and physical surveil- Supreme Court heard oral argument in this Organized Car Theft Rings case. On May 11, 2006, the New Jersey Su- lance, as well as the execution of search preme Court granted the State’s Petition for OIFP initiated several investigations into and arrest warrants. Working in an under- Certification on the issue of whether five or gangs of car thieves and others who en- cover capacity, OIFP investigators pur- more false statements made by a claimant in gaged in a series of automobile insurance chased 35 cars from several of the defen- a single document submitted in support of theft claims and organized auto theft rings. dants. These recovered cars have a total ap- one insurance claim can constitute the most These investigations originated from sepa- proximate value of $1.5 million. These serious form of the crime of Insurance Fraud, rate investigative sources developed by criminal initiatives are described below: a second degree offense. The case is pending OIFP through analysis of investigative data Operation Steal-A-Deal/Sansone Motors and intelligence information. Through addi- decision by the Supreme Court. Previously, In total, 12 cars valued at over $600,000 the Appellate Division upheld the Middlesex tional investigation, 33 criminal targets were identified, which targets were com- were stolen from the Sansone Route 1 Auto County trial court’s dismissal of the charge Mall located on Route 1, Avenel, New Jer- of Insurance Fraud as to Randi Fleischman mon to these otherwise apparently unrelated theft conspiracies. sey. These cars were allegedly stolen by on the basis that Fleischman’s alleged con- Sansone employees, including Esmerdo Pena duct did not constitute second degree Insur- Through criminal conspiracies described and Aneudy “Elvis” Ruiz, by taking keys ance Fraud. below, the targets would traffic in automo- from the dealership and giving those keys to A Middlesex County Grand Jury returned bile “give ups” by automobile owners, or car thieves so the automobiles could be an indictment on March 22, 2005, that would otherwise steal automobiles. These driven off the lot after hours and sold. In “given up” stolen cars as well as the actual addition to Pena and Ruiz, several individu- 74 als were charged in this investigation for allegedly fraudulently reported the theft to their roles in “giving up” vehicles in order to Auto One Insurance Company. file phony auto insurance theft claims. The On August 25, 2006, the court admitted following developments occurred in this op- Wilimi Ruiz-Duran into the PTI Program eration in 2006: conditioned upon him paying a $3,000 civil On August 11, 2006, Esmerdo Pena pled insurance fraud fine. The court also ordered guilty to an Accusation charging him with him to pay $12,763 in restitution to leader of an auto theft trafficking network. GEICO Insurance Company and $500 in Pena admitted that, between June 13, 2004 restitution to OIFP. On June 15, 2006, and November 18, 2004, as an organizer or Ruiz-Duran pled guilty to an Accusation supervisor of an automobile theft trafficking charging him with Insurance Fraud. Ruiz- network, he conspired with several others to Duran allegedly fraudulently reported his steal automobiles from an automobile dealer- On August 4, 2006, the court sentenced 2000 Honda Accord stolen to the Perth ship and to accept automobiles that were Ruben More to three years probation and Amboy Police Department and also alleg- “given up” by their owners so that phony au- ordered him to pay up to $25,000 in restitu- edly fraudulently reported the theft to tomobile insurance theft claims could be tion to Liberty Mutual Insurance Company, GEICO Insurance Company. submitted to automobile insurance carriers. $700 in restitution to OIFP, and a $3,000 On April 10, 2006, OIFP investigators During the time period in question, Pena civil insurance fraud fine. On June 15, arrested Jerinardo Fernandez and charged was an employee of Sansone Route 1 Auto 2006, More pled guilty to an Accusation him with conspiracy to commit Insurance Mall and assisted in the theft of cars from charging him with conspiracy and Insurance Fraud, Insurance Fraud, theft by deception, his employer. He also participated in auto- Fraud. More admitted that he falsely re- tampering with a witness, and terroristic mobile “give ups” with persons who wanted ported to the Elizabeth Police Department threats. He was released on $100,000 bail. to “give up” their car, in order to submit a and to Liberty Mutual that his 2002 Buick On November 30, 2006, Fernandez pled phony insurance theft claim, and, in some had been stolen when, in fact, he knew that guilty to an Accusation charging him with cases, purchase a new car. Pena is scheduled it had not been stolen. More also admitted Insurance Fraud and tampering with wit- to be sentenced early in 2007. that he conspired with Marisa Mercuri to nesses and informants. Fernandez admitted On September 1, 2006, the court sen- confirm Mercuri’s false claim that her 2003 that he gave his 2002 Honda Civic to tenced Aneudy “Elvis” Ruiz to four years in Nissan Xterra had been stolen in Hillside. Esmerdo Pena so that he (Fernandez) could state prison and ordered him to pay $10,500 Mercuri is More’s girlfriend. report the vehicle stolen and collect the in- in restitution to OIFP and a $3,500 civil in- On August 4, 2006, the court admitted surance money. Fernandez also admitted that surance fraud fine. On June 29, 2006, Ruiz Jose Diaz into the PTI Program conditioned he reported the vehicle stolen to First Tren- pled guilty to an Accusation charging him upon him paying up to $29,865 in restitution ton Indemnity Company. Finally, Fernandez with receiving stolen property and con- to GEICO Insurance Company, $1,000 in admitted that once he was notified he was a spiracy. Ruiz admitted that, between Octo- restitution to OIFP, a $3,000 civil insurance target of an investigation, he threatened ber 2004 and January 2006, he was involved fraud fine, and performing 60 hours of com- Pena and his family. Fernandez is scheduled in a conspiracy with others to steal cars and munity service. On June 28, 2006, Diaz pled to be sentenced in 2007. accept owner initiated “give up” vehicles so guilty to Insurance Fraud. Diaz allegedly Operation Big Stash that auto insurance claims could be submit- fraudulently reported his 2004 Acura TL sto- ted. Ruiz admitted that at the time in ques- len to the Elizabeth Police Department and OIFP’s investigation revealed that mem- tion, he was employed as a salesman at Lin- also allegedly fraudulently reported the theft bers of an auto theft gang frequently met at coln Mercury/Mazda of the Sansone Route to GEICO. a restaurant parking lot to discuss thefts of other vehicles, exchange stolen cars so that 1 Auto Mall. Ruiz admitted that he stole the On October 12, 2006, Grzegorz Miekina spare ignition keys for automobiles to be sold they could be picked up, re-tagged, and pled guilty to an Accusation charging him sold, and otherwise plan car thefts. The fol- at Sansone and used them to steal vehicles with Insurance Fraud. Miekina admitted that from the auto dealership. Additionally, Ruiz lowing developments occurred in this op- he fraudulently reported his 2002 Infiniti eration in 2006: admitted to being involved in three owner QX4 stolen to the Linden Police Depart- “give up” auto thefts whereby he took cars ment and also fraudulently reported the theft On October 4, 2006, Artur Czubek pled from their owners so the owners could re- to Liberty Mutual Insurance Company. He is guilty to an Accusation charging him with port them stolen and submit phony insurance scheduled to be sentenced in 2007. leader of an auto trafficking network. theft claims. Ruiz admitted to selling seven Czubek is scheduled to be sentenced in early cars stolen from the auto dealership for a to- On October 11, 2006, the court admitted 2007. Czubek admitted that, between No- tal of $18,000 and also admitted to selling Gregory Urena-Disla into the PTI Program vember 22, 2004 and October 22, 2005, he the three “give up” cars for a total of conditioned upon him paying $450 in restitu- was involved in a conspiracy with others to $1,500. On April 10, 2006, OIFP investigation and a $3,000 civil insurance fraud fine. either steal cars or accept owner-initiated tors arrested Ruiz and charged him with be- On June 29, 2006, Urena-Disla pled guilty to “give up” vehicles so that auto insurance ing a leader of an auto theft trafficking net- an Accusation charging him with Insurance claims could be submitted. Czubek was in- work, conspiracy, receiving stolen property, Fraud. Urena-Disla allegedly fraudulently re- volved with the theft and resale of 13 cars. and theft by unlawful taking. The judge set ported his 2002 Acura CL stolen to the Nine of the cars were stolen, including some bail at $100,000. Perth Amboy Police Department and also 75 OIFP Criminal Case Notes

from automobile dealerships. Four of the On July 14, 2006, the court sentenced On September 27, 2006, the court ad- cars were owner “give ups.” OIFP under- Monika Fijalkowska to two years probation mitted Desiree Gan into the PTI Program cover investigators purchased nine stolen conditioned upon her performing 75 hours conditioned upon her paying $16,119 in res- cars from Czubek for a total of $26,000. The of community service. The court also or- titution to Liberty Mutual Insurance Com- nine stolen vehicles have a total value of ap- dered her to pay $4,000 in restitution to pany and a $3,000 civil insurance fraud fine, proximately $562,000. OIFP undercover in- OIFP, $48,437 in restitution to Allstate In- and performing 60 hours of community ser- vestigators bought four owner “give ups” surance Company, and a $6,000 civil insur- vice. On August 18, 2006, Gan pled guilty to from Czubek for a total of $4,300. These ance fraud fine. On May 31, 2006, an Accusation charging her with Insurance four owner “give ups” have a total value of Fijalkowska pled guilty to Insurance Fraud. Fraud. Gan allegedly falsely reported to the approximately $133,000. OIFP investigators Fijalkowska admitted that she submitted New York City Police Department that her arrested Artur Czubek and charged him with phony insurance claims for two separate 1999 Mercedes Benz ML430 had been sto- conspiracy to commit receiving stolen prop- phony automobile thefts. len. Gan also allegedly falsely submitted a erty, receiving stolen property, leader of an With respect to the first theft, Fijalkowska stolen vehicle claim to Liberty Mutual Insur- auto trafficking network, and conspiracy to reported her 2001 BMW X5 as having been ance Company, knowing her vehicle had not commit Insurance Fraud. stolen to the New York City Police Depart- been stolen. On July 26, 2006, a Union County Grand ment. She admitted that she then submitted OIFP investigators previously arrested Jury returned an indictment charging a claim to Allstate Insurance Company falsely Rodamir Drozdzil and charged him with re- Krzysztof Sprysak, a/k/a Krzysztof Rumor, claiming that her car had been stolen. As part ceiving stolen property, stolen license a/k/a Andrzej Komar, with conspiracy, re- of the claim, she alleged that a camera and a plates, and possession of burglary tools. ceiving stolen property, and fencing. Accord- Panasonic Home Surround System were also OIFP investigators also previously arrested ing to the indictment, Sprysak, also known stolen with an additional value of approxi- Daniel Sokolski and charged him with re- as Rumor, conspired with others to know- mately $1,200. Allstate paid her claim in the ceiving stolen property, stolen license ingly receive stolen property and fence stolen approximate amount of $11,861. plates, and possession of burglary tools. cars. The State alleged that Sprysak possessed With respect to the second phony insur- Both cases remain pending. a stolen 2003 BMW 330I. It is alleged that ance claim, Fijalkowska admitted that she Operation Jellystone he sold the car to an OIFP undercover inves- reported a 2003 Audi A4 as having been sto- On December 12, 2006, OIFP investiga- tigator. Although a 2003 BMW 330I has an len to the New York City Police Depart- approximate value of $38,000, it was alleged tors arrested Jose Torres and charged him ment. She submitted a phony automobile with leader of auto theft trafficking net- that Sprysak agreed to sell the car for much theft claim to Allstate Insurance Company less. Sprysak failed to appear at his arraign- work, certain persons not to have weapons, alleging that her car had been stolen. Allstate unlawful possession of a weapon, and viola- ment on September 11, 2006. The judge is- paid Fijalkowska approximately $25,772 in sued a bench warrant for his arrest. tion of the regulatory provisions relating to settlement of her auto insurance claim. In firearms. The case is pending Grand Jury. On October 25, 2006, a Middlesex both cases, Fijalkowska admitted that she County Grand Jury returned an indictment “gave up” her car to another person who was State v. Erica Lee Silverstein charging Artur Lapinski with conspiracy, re- not further identified. On November 9, 2006, the court admitted ceiving stolen property, and fencing. Accord- On August 30, 2006, the court admitted Erica Lee Silverstein into the PTI Program. ing to the indictment, Lapinski conspired Janina Komsta into the PTI Program. On Silverstein pled guilty to an Accusation charg- with persons, who were not further identi- May 31, 2006, Komsta pled guilty to an Ac- ing her with attempted theft by deception. fied in the indictment, to commit receiving cusation filed in Union County charging her Silverstein allegedly falsely reported her 2002 stolen property and trafficking in stolen with conspiracy to commit Insurance Nissan Sentra stolen to the North Brunswick property. Specifically, it is alleged that Fraud. Komsta allegedly conspired with Police Department and subsequently allegedly Lapinski knowingly possessed a stolen 2005 Monika Fijalkowska to report Fijalkowska’s filed a false vehicle theft claim with Liberty BMW M3. It is further alleged that Lapinski 2003 Audi A4 stolen to the New York City Mutual Insurance Company. It is also alleged sold the stolen BMW to another person who Police Department. that Silverstein’s vehicle was not stolen but was acting in an undercover role on behalf that she had given the keys to another person of OIFP. It is also alleged that the 2005 to dispose of the car so that a false insurance BMW M3 had been stolen from an auto deal- claim could be submitted. ership in Warwick, Rhode Island. The indict- State v. Kathleen Natale Hughes ment also charges Lapinski in a separate conspiracy. In that conspiracy, it is alleged that On December 1, 2006, the court admitted Lapinski agreed with other persons, who Kathleen Natale Hughes into the PTI Program were not identified in the indictment, to conditioned upon her paying a $2,000 civil in- commit Insurance Fraud. At trial, the State surance fraud fine and performing 50 hours of intends to prove that Lapinski committed community service. On October 2, 2006, Insurance Fraud in that he agreed with an- Hughes pled guilty to an Accusation charging other person to sell an Infiniti QX4 so that her with attempted theft by unlawful taking. the owner of the Infiniti QX4 could falsely Hughes allegedly falsely reported to Liberty report it stolen to the insurance company. Mutual Insurance Company that her 2004 Nissan Quest had been stolen in Camden. 76 State v. Walter Francis, et al. Vehicle Theft to Prudential Property and Fraud, attempted theft by deception, tam- On September 8, 2006, the court admit- Casualty Insurance Company, falsely stating pering with public records, and false swear- ted Walter Francis into the PTI Program that he last saw the vehicle on November ing. According to the indictment, Mary conditioned upon him paying $6,896 in resti- 16, 2002. Prudential, suspecting fraud, de- Maldonado fraudulently reported to the Old tution to New Jersey CURE Insurance Com- nied the claim and referred the matter to Bridge Township Police Department that her pany and a $1,000 criminal fine. He had pre- OIFP for investigation. 2002 Acura RSX, which her son Alan had viously paid a $3,000 civil insurance fraud State v. Victor Shulou been driving, had been stolen. The State further alleges that Mary Maldonado submitted fine. On July 11, 2006, Francis pled guilty to On December 21, 2006, Victor Shulou an Accusation charging him with conspiracy a fraudulent stolen vehicle claim to Allstate pled guilty to an Accusation charging him Insurance Company, even though the vehicle and theft by deception. Francis allegedly with Insurance Fraud. Shulou admitted that falsely reported to the Jersey City Police De- had not been stolen but had, in fact, been he falsely reported that his car had been sto- involved in an accident. Allstate, suspecting partment and New Jersey CURE that his len in New York City, knowing that it had 1998 Chevrolet Cavalier had been stolen, fraud, denied the claim and referred the mat- not been stolen. He subsequently filed a false ter to OIFP for investigation. when, he had allegedly given the vehicle to stolen vehicle insurance claim with Allstate Michael Steele so that Steele could dispose Insurance Company. Shulou will be sen- State v. Cindy Cassagne-Centeno of the car. tenced in 2007. On November 9, 2006, Cindy Cassagne- On September 15, 2006, the court sen- State v. Michael J. Jolas Centeno pled guilty to an Accusation charg- tenced Michael Steele to two years probation ing her with Insurance Fraud. Cassagne- and ordered him to pay a $1,000 criminal On August 21, 2006, an Essex County Centeno admitted that she falsely reported to fine as well as a $2,000 civil insurance fraud Grand Jury returned an indictment charging the Jersey City Police Department and Selec- fine. On July 21, 2006, Steele pled guilty to Michael J. Jolas with theft by deception. Ac- tive Insurance Company that her 2002 an Accusation charging him with conspiracy cording to the indictment, Jolas reported to Honda Accord was stolen from outside her and arson. Steele admitted that he took pos- the Belleville Police Department that his residence when, in fact, the vehicle had been session of Francis’ 1998 Chevrolet Cavalier 2001 Kia Sephia had been stolen, knowing found burning in New York City the day be- and set it on fire so that Francis could falsely that it had not been stolen. It is also alleged fore she reported she had last seen the car. report that the vehicle had been stolen. that Jolas falsely submitted a vehicle theft Cassagne-Centeno is scheduled to be sen- insurance claim to One Beacon Insurance/ tenced in 2007. State v. Eduardo Pagan, Jr. New Jersey Skylands Insurance Company. On August 17, 2006, a Somerset County The insurance company paid $9,039 on the State v. Juan Saldivar Grand Jury returned an indictment charging claim. On December 7, 2006, Juan Saldivar pled Eduardo Pagan, Jr., with Insurance Fraud, State v. Paulette Foti-McMullen, et al. guilty to an Accusation charging him with falsifying records, and tampering with public Insurance Fraud. Saldivar admitted that he records or information. According to the in- On October 11, 2006, Hank McMullen falsely reported to Encompass Insurance dictment, Pagan falsely reported to the pled guilty to an Accusation charging him Company that his Ford Expedition had been Belleville Police Department that his leased with Insurance Fraud. He admitted that he stolen, even though he knew the person who 2001 Jaguar had been stolen. It is also alleged and his wife, Paulette Foti-McMullen, falsely had the vehicle and that the vehicle had sub- that Pagan submitted a false vehicle theft reported that her 2003 Ford Expedition was sequently been returned to him. He is sched- claim to Parkway Insurance Company, know- stolen and filed a false stolen vehicle police uled to be sentenced in 2007. report with the Hamilton Township Police ing that the vehicle had not been stolen. The State v. Rosa Cuellar case is pending. Department in support of the phony auto insurance theft claim. Hank McMullen fur- On November 9, 2006, an Essex County State v. Deland Docsol ther admitted that he assisted his wife in fil- Grand Jury returned an indictment charging On December 11, 2006, Deland Docsol ing a false auto theft insurance claim with Rosa Cuellar with Insurance Fraud, at- pled guilty to attempted theft by deception. State Farm Insurance Company by conceal- tempted theft by deception, and tampering On the same day, the court admitted him ing the fact that the Ford Expedition was set with public records. According to the indict- into the PTI Program. An Essex County on fire in New York so that the McMullens ment, Cuellar falsely reported to Newark Po- Grand Jury returned an indictment on Au- could falsely claim the Expedition had been lice Department and Progressive Insurance gust 8, 2006, charging Docsol with at- stolen. Hank McMullen is scheduled to be Company that her 2004 Hyundai had been tempted theft by deception and tampering sentenced in early 2007. The McMullens stolen, when she had allegedly given the ve- with public records or information. Accord- were also prosecuted by the Hamilton Town- hicle to another person to dispose of so that ing to the indictment, on November 16, ship Municipal Court and by law enforce- she could file a false auto theft claim with 2002, Docsol allegedly fraudulently re- ment authorities in New York for conduct her insurance company and receive the claim ported to the Irvington Police Department related to this false insurance claim. money for the vehicle. The case is pending. that his 1995 Mercedes Benz E420 had State v. Mary Maldonado , et al. State v. Joseph Gavin been stolen on that day even though the vehicle had been in the possession of the At- On November 30, 2006, a Somerset Joseph Gavin, who had an outstanding lanta, Georgia, Police Department since No- County Grand Jury returned an indictment warrant for his arrest, was arrested in Penn- vember 13, 2002. The State alleged that charging Mary Maldonado and her son, Alan sylvania by OIFP investigators on November Docsol submitted a fraudulent Affidavit of Maldonado, Jr., with conspiracy, Insurance 2, 2006, and was transported to Cape May 77 OIFP Criminal Case Notes

County. As part of the Paulo Dasilva- an indictment on February 23, 2006, charging her May 24, 2006, guilty plea to Insur- Cristelo investigation, a Cape May County ing Liu with conspiracy and attempted theft ance Fraud. A Bergen County Grand Jury re- Grand Jury had returned an indictment that by deception. According to the indictment, turned an indictment charging Morales with charged Gavin with conspiracy and theft by Liu, the owner of Long Branch Service Cen- Insurance Fraud. According to the indict- deception. According to the indictment, ter, allegedly provided phony repair receipts ment, Morales allegedly submitted a fraudu- Gavin, who was also known as Joseph totaling $2,532 to John Callery. Callery, who lent damage and theft of property claim to Abadie, allegedly conspired with Dasilva- was involved in an automobile accident, al- Consumer First Insurance Company for her Cristelo to submit a phony automobile insur- legedly used the phony repair receipts in or- 2001 BMW. The indictment alleged that Mo- ance claim to the Camden Fire Insurance As- der to inflate his insurance claim to Liberty rales reported that she was the driver of the sociation. The State also alleged in the in- Mutual Insurance Company. Callery pled vehicle when it was damaged and that parts dictment that Dasilva-Cristelo “gave up” his guilty to attempted theft by deception and had been stolen when, in fact, her son, who 1999 Chevrolet pickup truck to Gavin so was admitted into the PTI Program. had a suspended drivers license and was not that Dasilva-Cristelo could file a false stolen State v. Misty Megill insured to drive Morales’ vehicle, was the vehicle claim with the Camden Fire Insur- alleged driver of the vehicle when it was ance Association. Camden Fire Insurance As- On January 26, 2006, OIFP investigators damaged and the parts were stolen. sociation paid approximately $23,407 for the and members of the New Jersey State Police phony automobile insurance theft claim for arrested Misty Megill and charged her with Dasilva-Cristelo. Gavin had been a fugitive Insurance Fraud and tampering with public when the indictment was returned. records. The State alleges that Megill and perhaps others purchased used cars, often State v. Keith R. Turpin salvage cars. In registering the vehicles with On November 28, 2006, Keith R. Turpin the Motor Vehicle Commission (MVC), pled guilty to an Accusation charging him Megill allegedly falsely indicated that the cars with Insurance Fraud. Turpin admitted that were covered with an auto insurance policy on April 19, 2006, he falsely reported to the when, in fact, they were not. The cars were Asbury Park Police Department that his then allegedly sold or leased to others. Megill 2004 Volkswagen had been stolen when, in was arraigned in Monmouth County and bail fact, it had not been stolen. He later submit- was set at $170,000/10%. This matter is State v. Robinson Rodriguez ted a vehicle theft insurance claim to Rutgers pending presentation to a Grand Jury. The Casualty Insurance Company, which paid investigation is continuing and additional ar- On September 18, 2006, a Bergen County $28,050 on the claim. Turpin is scheduled to rests and charges are anticipated. Grand Jury returned an indictment charging be sentenced in 2007. Robinson Rodriguez with Insurance Fraud State v. Louis Rivadeneira and attempted theft by deception. According State v. Alexander Schaefer On December 15, 2006, the court sen- to the indictment, Rodriguez allegedly sub- On December 12, 2006, Alexander tenced Louis Rivadeneira to a one-year pro- mitted phony receipts totaling $2,500 to Lib- Schaefer pled guilty to an Accusation charg- bationary term and ordered him to pay erty Mutual Insurance Company in support of ing him with Insurance Fraud. Schaefer ad- $9,800 in restitution. On October 19, 2006, his claim that four rims and tires were stolen mitted that he submitted a false insurance Rivadeneira had pled guilty to attempted from his 1999 Lincoln Navigator. The indict- claim to State Farm Insurance Company theft by deception. A Hudson County Grand ment alleges that the rims and tires were al- claiming that his ten-day-old 2003 Yamaha Jury returned an indictment on May 2, 2006, ready on the Navigator when Rodriguez pur- motorcycle was stolen while parked in charging Rivadeneira, who owned and oper- chased the vehicle despite Rodriguez’ claim Wayne, when, in fact, it was damaged while ated an automobile body repair business that he purchased the rims and tires sepa- he was operating it. Schaefer’s scheme came known as Louis & Sons Auto Body, with rately. Rodriguez failed to appear at his ar- to light when it was discovered that he was conspiracy and attempted theft by deception. raignment on October 16, 2006, and the cited for careless driving by the Pequannock According to the indictment, between May court issued a bench warrant for his arrest. Police Department while riding the motor- 4, 2000 and August 15, 2003, Rivadeneira State v. Jason Senf cycle that he previously reported as being inflated automobile body repair claims sub- stolen in Wayne. State Farm denied mitted to Allstate Insurance Company and In May 2006, the trial court stayed the Schaefer’s claim and the matter was referred United Services Automobile Association prosecution of Jason Senf pending the out- to OIFP for investigation. He is scheduled to (USAA). The State alleged that Rivadeneira come of the Supreme Court’s decision ad- be sentenced in 2007. was responsible for submitting several in- dressing the application of the Insurance Fraud statute in State v. Randi Fleischman. False AutomobileRelated Insurance Claims flated automobile repair claims by causing additional damage to be inflicted on cars he The Appellate Division had reversed the trial State v. Thomas Liu was to repair and by charging the insurance court’s order admitting Senf into the Mercer County PTI Program and returned the case On August 28, 2006, the court admitted companies for repairs that were not neces- to the trial court for trial. Over the State’s Thomas Liu into the PTI Program condi- sary or were never made as billed. objection, on July 25, 2005, the trial court tioned upon him paying a $1,500 civil insur- State v. Sylvia Morales stayed the prosecution and admitted Senf ance fraud fine. The court also ordered him into the PTI Program, conditioned upon him to perform 75 hours of community service. On July 11, 2006, the court admitted paying a $5,000 civil insurance fraud fine and A Monmouth County Grand Jury returned Sylvia Morales into the PTI Program follow- 78 performing 100 hours of community service. March 24, 2006, John Knight pled guilty to conditioned upon her paying $123 in restitu- The State objected to Senf’s participation in falsifying records. The court sentenced him tion to Amica Insurance Company and a the PTI Program because he was charged on August 18, 2006, to two years probation $2,000 civil insurance fraud fine. On July 28, with a serious second degree crime. and ordered him to pay a $5,000 civil insur- 2006, the court sentenced Frances Bowie to A Mercer County Grand Jury previously ance fraud fine. A Passaic County Grand Jury two years probation and ordered her to pay a returned an indictment that charged Senf returned an indictment that charged Virginia $4,000 civil insurance fraud fine. On June with Insurance Fraud and attempted theft by B. Kinion and her husband, John Knight, 12, 2006, Frances Bowie pled guilty to an deception. According to the indictment, with conspiracy, Health Care Claims Fraud, Accusation charging her with Health Care Senf allegedly submitted a fraudulent insur- and attempted theft by deception. The State Claims Fraud. Bowie’s daughter, Monique ance claim to Foremost Insurance Company also charged Kinion with theft by deception, Bowie, was charged in a separate Accusation for damage to his all-terrain vehicle (ATV). tampering with public records or informa- with attempted theft by deception. Frances The State alleged that Senf falsely claimed tion, and falsifying records. The State Bowie admitted that, between May 13, 2002 that he damaged his ATV on June 22, 2003, charged Knight separately with falsifying and May 28, 2003, she submitted a false au- when he struck a tree and attempted to records and false swearing. tomobile insurance claim to an insurance make a collision claim for damages to his According to the indictment, Kinion and company. Specifically, she admitted that she ATV. The State alleged that Senf ’s friend ac- Knight allegedly submitted a false automo- falsely claimed to Amica Mutual Insurance tually damaged the ATV earlier on April bile insurance policy application and false Company that, following an automobile acci- 18, 2003, when he struck a tree with the PIP claims to Clarendon National Insurance dent, she was required to hire another person ATV. At that time, however, the ATV was Company. The State alleged in the indict- to perform “essential services” for her be- not covered with collision insurance by ment that Kinion and Knight submitted an cause of the injuries she sustained in the au- Foremost Insurance Company. The State al- automobile insurance policy application that tomobile accident. Frances Bowie admitted leged that after the ATV was damaged, Senf indicated they had no automobile insurance that, in total, she submitted approximately attempted to obtain insurance with collision and no automobile accidents for the 36 $1,500 in phony essential services claims to coverage and concealed the fact that the months prior to the date of the application. Amica Mutual Insurance Company. Suspect- ATV had been damaged. Suspecting fraud, The State alleged that Kinion and Knight had ing fraud, Amica denied both claims and re- Foremost investigated Senf ’s June 22, 2003, been involved in an automobile accident just ferred the matter to OIFP for investigation. claim and referred the matter to OIFP for hours before they submitted the insurance State v. Nicholas A. DiMeglio further investigation and prosecution. policy application, and that they allegedly at- On October 4, 2006, a Union County tempted to represent to the insurance com- Grand Jury returned an indictment charging pany that the automobile accident occurred Nicholas A. DiMeglio with theft by decep- after it agreed to provide automobile insur- tion, uttering forged writing, and falsifying ance. The State further alleged that Kinion records. According to the indictment, and Knight caused fraudulent PIP insurance DiMeglio allegedly submitted an altered in- claims for $9,917 and $13,231 to be submit- voice in the amount of $8,745 in order to ted to Clarendon for the automobile acci- support the amount of damage he claimed dent. Clarendon denied the claims and re- his 2002 Kawasaki motorcycle sustained in a ferred the matter to OIFP for investigation. collision with a truck. The State alleges that DiMeglio submitted the altered invoice to State v. Jay Gorzkowski Rider Insurance Company to make it appear On November 27, 2006, Jay Gorzkowski that, prior to the accident, the insured mo- pled guilty to an Accusation charging him torcycle had had extensive repairs and reno- with Insurance Fraud. Gorzkowski admitted vations, even though the repairs and renova- that he reported to the Elmwood Police De- tions had never been made. DiMeglio failed partment that his 1999 Mercedes Benz had to appear at his arraignment on November been stolen. Gorzkowski admitted that he 13, 2006, and the court issued a bench war- grossly inflated the value of the vehicle rant for his arrest. when he submitted the stolen automobile State v. Judith E. Hoffman insurance claim to Consumer First Insurance On September 19, 2006, the court admit- Company in order to obtain a larger insur- ted Judith E. Hoffman into the PTI Program ance payoff for the vehicle. Consumer First, conditioned upon her performing 50 hours suspecting fraud, denied the claim and re- of community service. Hoffman previously ferred the matter to OIFP for investigation. State v. Virginia B. Kinion , et al. pled guilty to an Accusation charging her Gorzkowski is scheduled to be sentenced in with Insurance Fraud. Hoffman allegedly On April 13, 2006, Virginia B. Kinion early 2007. was involved in a motor vehicle accident. At pled guilty to Health Care Claims Fraud. The State v. Frances Bowie, et al. the time of the accident, her automobile in- court sentenced her on August 18, 2006, to surance policy with Allstate Insurance Com- three years probation and ordered her to pay On September 9, 2006, the court admitted Monique Bowie into the PTI Program pany allegedly had been terminated for fail- a $10,000 civil insurance fraud fine. On ure to pay the premium. Hoffman allegedly 79 OIFP Criminal Case Notes

reinstated the insurance policy with Allstate ported accident in a total amount of ap- insurance policy’s PIP coverage. The State following the accident and allegedly changed proximately $11,215. Ebron and Tanner pre- alleges that approximately $20,000 in PIP the time on the police accident report so that viously pled guilty and both were sentenced claims were submitted as a result of the pur- it reflected that she had insurance coverage to four years probation, ordered to pay ported accident. at the time of the accident. $14,690 in restitution and to each pay a Insurance Claims Involving Identity Fraud State v. Alexis Figueroa $5,000 civil insurance fraud fine. State v. Vianey Vincent On August 15, 2006, a Hudson County State v. Evelia Toledo On December 18, 2006, Vianey Vincent Grand Jury returned an indictment charging On November 29, 2006, Evelia Toledo pled guilty to Health Care Claims Fraud. He Alexis Figueroa with attempted theft by de- pled guilty to an Accusation charging her will be sentenced in 2007. A State Grand ception. According to the indictment, with Insurance Fraud. On the same day, she Jury returned an indictment charging Vianey Figueroa allegedly obtained medical services was admitted into the PTI Program condi- Vincent, a/k/a Steven Vincent, a/k/a from the Jersey City Medical Center, valued tioned upon her performing 100 hours of Vincent Steven, a former State employee of in excess of $500, by falsely claiming to be community service. Toledo allegedly submit- the Irvington Branch of the Motor Vehicle injured in an automobile accident in which a ted an altered receipt for towing of her 1999 Commission, with Health Care Claims Fraud, taxicab was allegedly struck by another ve- Ford Crown Victoria to the Iservco Insur- theft of identity, and attempted theft by de- hicle. The State alleged that Figueroa was ance Company, following an accident she ception. The indictment alleged that, be- not in the taxicab when it was struck and, was involved in on the New Jersey Turnpike. tween January 1, 1998 and August 31, 2002, therefore, did not suffer injuries. The alleged State v. Town & Country Auto Body, et al. Vincent used the fictitious identities of motive for Figueroa’s seeking treatment from Steven Vincent and Vincent Steven to ob- the Jersey City Medical Center was to submit On December 6, 2006, the court admitted tain an automobile insurance policy, a home a false PIP claim to Amica Mutual Insurance Town & Country Auto Body and Vincent mortgage, an automobile loan, and other Company in an effort to obtain insurance Iuffredo into the PTI Program conditioned credit card purchases with a value in excess claim money. The insurance company’s inves- upon them paying $6,757 in restitution to of $75,000. The indictment also alleged that tigation of the incident prevented Figueroa Liberty Mutual Insurance Company and pay- Vincent submitted false PIP insurance claims from going forward with his alleged attempt ing a $7,500 civil insurance fraud fine. On to State Farm Insurance Company and at- to defraud Amica Mutual Insurance Com- the same day, Town & Country Auto Body tempted to collect uninsured motorist insur- pany. The case is pending trial. located on East Main Street in Mendham, pled guilty to an Accusation charging it with ance benefits by claiming that “Steven State v. Hanif Bethea, et al. theft by deception. Town & Country’s Vincent” was insured with State Farm and On August 24, 2006, an Essex County owner/operator, Vincent Iuffredo, was also that he (Vianey Vincent) was entitled to in- Grand Jury returned an indictment charging charged by way of an Accusation with theft surance benefits as a member of “Steven Hanif Bethea and Thomas Merritt with con- by deception. The corporate defendant, Vincent’s” household. OIFP investigators ar- spiracy, Health Care Claims Fraud, attempted Town & Country Auto Body, allegedly stole rested Vincent pursuant to an arrest warrant. theft by deception, and tampering with pub- insurance company claims money from Lib- Vincent was released on $50,000 bail. lic records. According to the indictment, be- erty Mutual by inflating automobile damage State v. Solanji Severino Chavez tween May 16, 2001 and April 9, 2002, repair claims. On September 22, 2006, the court sen- Bethea and Merritt conspired to commit State v. Noemi Romero, et al. tenced Solanji Severino Chavez to a one-year Health Care Claims Fraud and theft by de- probationary term and ordered her to per- ception by allegedly claiming that they had On November 17, 2006, a Mercer County form 25 hours of community service. been injured in an automobile accident Grand Jury returned an indictment charging Severino Chavez previously pled guilty to an which purportedly occurred on May 16, Noemi Romero, Argelia Romero, and Maria Accusation charging her with uttering a 2001, in Newark. The State alleges that the Romero with conspiracy, Health Care Claims simulated document. Severino Chavez ad- accident did not occur and neither Bethea Fraud, attempted theft by deception, and mitted that she possessed a fictitious New nor Merritt were injured. The State also al- tampering with public records. According to Jersey drivers license bearing the name leges that Bethea and Merritt caused the East the indictment, following an allegedly minor Marisol Garcia, knowing she was not Marisol Orange Chiropractic Association to bill Met- automobile accident which occurred in West Garcia. ropolitan Property and Casualty Insurance Orange, Noemi Romero, the driver of one Company a total of approximately $9,861 of the vehicles involved in the purported ac- State v. Oscar Garcia Guillen a/k/a Rafael for diagnostic and chiropractic treatments cident, conspired with Maria Romero and Feliciano related to the purported auto accident. East Argelia Romero to claim to the West Orange On July 12, 2006, a Union County Grand Police Department that Maria and Argelia Orange Chiropractic billed approximately Jury returned an indictment charging Oscar $5,173 for treatments rendered to Bethea were passengers in the car and were injured, Garcia Guillen with Insurance Fraud and and $4,688 for treatments rendered to when, in fact, they were not passengers in theft of identity. According to the indict- the car at the time of the accident and were Merritt. Bethea failed to appear at his ar- ment, Garcia Guillen allegedly stole the iden- raignment on October 2, 2006, and the court not injured. The State alleges that following tity of a Trenton man, using the man’s driv- issued a bench warrant for his arrest. the claim of injuries, Noemi, Maria, and ers license and personal information to ob- Argelia Romero submitted claims for medical Additionally, two other claimants, William tain an auto insurance policy from First treatment to New Jersey Manufacturers In- Trenton Indemnity Company. The State al- Ebron and Suzette Tanner, were also treated surance Company based on the automobile for alleged injuries arising from the pur- 80 leges that later, following an automobile ac- render his chiropractic license following his age, and non-economic losses arising from cident in Hamilton, Garcia Guillen allegedly guilty plea to an Accusation charging him bodily injuries purportedly sustained in auto- presented police with a fraudulent insurance with Health Care Claims Fraud in connection mobile accidents. Many of the people posing card in the Trenton man’s name and submit- with this investigation. In addition, following as alleged accident victims filed insurance ted a claim in the man’s name for $3,127 to a six-day bench trial, DiPatri was convicted claims for personal injuries. State Farm Insurance Company, the other of conspiracy, bribery, official misconduct, At his guilty plea hearing, Major admitted driver’s insurance company. Garcia Guillen and Criminal Use of Runners. The court sen- that he was a “runner” who accepted bribe failed to appear at his pre-arraignment con- tenced him to three years state prison. payments from two chiropractors for the ference on August 4, 2006. The judge issued Bollettieri’s trial was stayed pending an ap- purpose of providing information from po- a bench warrant for his arrest. peal to the State Supreme Court in which lice accident reports to the chiropractors State v. Alif James, et al. Bollettieri alleged that the State intended to who used the information to recruit patients On December 21, 2006, Michelle improperly use immunized testimony against to submit insurance claims. A “runner” is a Chappell pled guilty to conspiracy. She is him in his trial. The State Supreme Court re- person who, for money, recruits persons for scheduled to be sentenced in 2007. A turned Bollettieri’s case to the trial court for licensed medical professionals or lawyers so Hudson County Grand Jury returned an in- a Kastigar hearing; and on January 23, 2006, they can submit insurance claims. Further- dictment on October 17, 2006, charging Alif the trial judge ruled that Bollettieri’s prior more, Major admitted he had a financial in- James and Michelle Chappell with con- statement could, in fact, be admitted into terest in a medical facility that specialized in spiracy, theft of identity, and theft by decep- evidence against him at his trial. treating persons with insurance claims, and tion. According to the indictment, James and State v. Philip Major, et al. also admitted that he attempted to bribe another police officer for additional police ac- Chappell conspired to commit identity theft The court meted out sentences or issued and theft of a car. James allegedly obtained a cident report information in order to recruit arrest warrants in 2006 for two additional patients to submit insurance claims. 1998 Honda Accord from an auto dealership persons who were among 39 defendants, pri- utilizing the identity of another person, marily from Essex County, who were State v. Jeffrey Nemes which James wrongfully obtained. The State charged in four separate indictments with As part of a continuing investigation into further alleged that Chappell co-signed cer- conspiracy to commit theft by deception and a series of arson fires in Mercer County and tain records in connection with the purchase official misconduct relating to automobile elsewhere, a State Grand Jury previously re- of the Honda knowing that James was using insurance PIP fraud. The defendants named turned three separate indictments that a fictitious identity. The case as to James is in the indictments were allegedly involved in charged Jeffrey Nemes, a former Hamilton pending trial. automobile accidents in police reports writ- Township police officer, with bribes alleg- Insurance Fraud Committed ten by former East Orange Police Officer edly offered to local district fire chiefs, by Police Officers Philip Major between June 1995 and Octo- bribes allegedly offered to the Executive ber 1999. The indictments returned by a Vice President of the East Windsor Police State v. Jerome F. Bollettieri, et al. State Grand Jury alleged that the automobile Athletic League (PAL), and the alleged theft On August 11, 2006, following a six-day accident police reports were used to support of insurance claim money in connection bench trial, the trial judge convicted Jerome fraudulent automobile insurance PIP and with a construction and home repair business F. Bollettieri of conspiracy, official miscon- bodily injury claims. which was owned and operated by Nemes, duct, bribery, and Criminal Use of Runners. The following dispositions occurred in 2006: known as Nemes Enterprises, Inc. He will be sentenced in 2007. Bollettieri, With respect to the third indictment in- who was the Lieutenant in charge of the Cari Blanco and Nieves Carasco had failed to appear at their arraignment and the court volving the alleged theft of insurance claim Camden County Police Department’s Auto- money, on May 19, 2005, the Appellate Di- mobile Accident Report Records Room at issued a bench warrant for their arrests. Both vision of the New Jersey Superior Court re- the time he was charged in an indictment Blanco and Carasco surrendered on June 13, 2005, and each pled guilty to conspiracy to versed Nemes’ conviction for theft by failure previously returned by the State Grand Jury, to make proper disposition of property. The was also charged, along with Thomas commit official misconduct. The court sen- Appellate Court returned the case to the trial DiPatri, Charles Warrington, and Ettore C. tenced them on February 24, 2006, to three years probation and ordered them each to pay a court for a new trial. A jury had found Carchia with providing Camden Police auto Nemes guilty of theft by failure to make accident reports to DiPatri so they could, in $1,500 civil insurance fraud fine. Blanco was proper disposition of property. Nemes, while turn, be provided to Warrington, a “runner,” also ordered to pay $3,895 in restitution to Prudential Insurance Company. employed as a Hamilton Township police to solicit patients for a chiropractic practice officer, allegedly took insurance claim known as American Spinal. Specifically, the On September 15, 2006, the court sen- money in the approximate amount of State Grand Jury indictment charged tenced former East Orange Police Officer $130,000 from both commercial and resi- Bollettieri and DiPatri with conspiracy, offi- Philip Major to 364 days in county jail. Ma- dential property owners through Nemes En- cial misconduct, bribery, and Criminal Use jor previously pled guilty to conspiracy and terprises, Inc., for the purpose of making of Runners. Warrington was charged with two counts of official misconduct. Major repairs but allegedly failed to complete re- conspiracy, bribery in official matters, and pled guilty to writing 16 false police automo- pairs to the properties. The court sentenced Criminal Use of Runners. bile accident reports so that approximately Nemes to seven years state prison and or- Previously, the court sentenced Carchia to 60 insurance claims could be submitted to dered him to pay a total of $130,833 in res- three years probation and ordered him to sur- insurance companies for PIP, property dam- titution. Nemes appealed his conviction 81 OIFP Criminal Case Notes

which was reversed by the Appellate Divi- guilty to an Accusation charging him with theft by deception, use of a 17-year-old or sion and remanded for a new trial. The case receiving stolen property. Brown admitted younger to commit a criminal offense, and is pending re-trial. that he possessed a bag of approximately 24 possession of a weapon without a permit. The trial on the charges that Nemes alleg- stolen automobile ignition keys used to steal All of the charges stem from the defendants’ edly offered bribes to fire chiefs in and expensive new cars from dealers. Brown ad- alleged participation in phony automobile around Hamilton Township, began on Au- mitted that he did so by using a similar accidents in and around Union County for gust 24, 2005. During the trial, the State al- scheme as Anthony Josephs. which they submitted false insurance claims. leged that Nemes offered a bribe to the fire State v. Julio Cid-Peralta The State Grand Jury’s main indictment chief of the Rusling Hose Fire Company. A On January 13, 2006, a Union County charged Bandy with racketeering and related second bribe was alleged to have occurred Grand Jury returned an indictment charging crimes. The State alleged Anhuar Bandy during a conspiracy in which Nemes and Julio Cid-Peralta with receiving stolen prop- owned, controlled, or operated, as the chief Marc Rossi, the former owner of Rossi Ad- erty, alterations of motor vehicle trademark corporate officer, six North Jersey chiroprac- justment Services, a public insurance claims identifications, and obstructing administra- tic clinics, and that Alejandro Ventura, Elvin adjusting business, agreed to offer a bribe to tion of law or other governmental function. Castillo, Raynaldo Cuevas, Cesar Caba, and the fire chief of the Enterprise Fire Com- According to the indictment, Cid-Peralta Victor Almonte were associated with Bandy, pany in Hamilton Township. During the trial, was allegedly in possession of a stolen 1993 or the clinics, as “runners” who fabricated the State alleged that bribes were offered to Mazda RX7. The State alleged that the sto- eight phony automobile accidents. The State the fire chiefs so that they would allow fires len Mazda had an altered Vehicle Identifica- alleged that defendants used information to burn longer in order to cause additional tion Number (VIN). The State also alleged from the eight phony automobile accidents damage. The State alleged that Nemes that when Cid-Peralta was stopped while to submit PIP insurance claims in excess of owned and operated a construction and driving the allegedly stolen car, he exited the $331,000 to several insurance companies. home repair business during the period of vehicle and ran. Cid-Peralta failed to appear Additionally, the State alleged in the indict- time the alleged bribes were paid and was at his arraignment on March 6, 2006, and the ment that defendants submitted insurance seeking additional construction work for his court issued a bench warrant for his arrest. claims in excess of $2 million for more than business. The trial ended in a mistrial. 90 other phony accidents, and that the acci- State v. Giovanni Muscia On June 13, 2006, the Appellate Division dents were constructed by obtaining cars, denied Nemes’ request to dismiss the indict- On May 15, 2006, Giovanni Muscia pled drivers and passengers, faking accidents, and ment on the ground that double jeopardy at- guilty to theft by deception. He is scheduled then sending the occupants of the cars to tached as a result of the declaration of the to be sentenced in early 2007. A Passaic treat at Bandy’s chiropractic clinics so he mistrial, and ordered the case returned to the County Grand Jury returned an indictment could submit the PIP insurance claims. trial court for trial. The trial is scheduled for charging Muscia with conspiracy and theft by The State alleged that insurance claims for early 2007. Likewise, the third indictment deception. According to the indictment, these phony automobile accidents were sub- alleging that Nemes allegedly offered bribes Muscia owned and operated Rocky’s Auto mitted to 16 other insurance carriers, includ- to the Vice President of the East Windsor Body formerly located on Bloomfield Avenue ing Bayside Casualty, Clarendon National, PAL is pending trial. in Paterson. Muscia allegedly received, Continental Insurance, Farm Family Insur- stripped, and stored parts from automobiles Receiving Stolen Property ance Company, Liberty Mutual Insurance that had been reported stolen, including a Company, Maryland Insurance Company, The State v. Anthony Josephs, et al. 1994 Mercedes Benz. Moxon Company, National Continental Pro- The court previously sentenced Anthony Staged and Fictitious Accidents gressive, National General Insurance Com- pany, NJ CURE, Ohio Casualty Insurance Josephs to five years in state prison. Josephs State v. Anhuar Bandy, Elvin Castillo, et al. pled guilty to receiving stolen property. Company, Parkway Insurance, Progressive Josephs admitted that, between December Following a six-week jury trial, Anhuar Casualty, Red Oak Insurance Company, 2002 and January 2004, he knowingly pos- Bandy and Elvin Castillo were convicted of United States Automobile Association (USAA), sessed a stolen 2004 Cadillac Escalade and, racketeering, conspiracy, Health Care Claims and New Jersey Manufacturers Insurance Com- between August 2003 and October 2003, he Fraud, and theft by deception. The Court pany. The State alleged that most of the claim knowingly possessed a stolen 2000 Porsche sentenced Bandy to 29 years state prison, or- money was paid to Bandy owned, operated, Boxster. Josephs also admitted that he par- dered him to pay a $100,000 criminal fine or controlled chiropractic clinics. and restitution in the amounts of $3,483 to ticipated in stealing other cars from automo- Pursuant to State v. Natale, a New Jersey Sentry Insurance Company, $14,106 to bile dealerships. Josephs and others would Supreme Court decision which mandated re- Allstate Insurance Company, and $472 to allegedly appear at dealerships, test drive ex- sentencing in certain cases, the Bandy case Prudential Insurance Company. The Court pensive cars, and switch the real ignition key was remanded to the trial court for re-sen- sentenced Castillo to 13 years state prison to the cars with a fake key so they could re- tencing. On August 7, 2006, Judge Triarsi of and ordered him to pay $27,800 in restitu- turn and use the real ignition key to steal the Union County held a re-sentencing hearing tion and a $50,000 criminal fine. cars. The defendants stole cars from delarships for Bandy. Bandy appeared in court, located in Oakhurst and Lawrence. Anhuar Bandy and Elvin Castillo are two publically admitted his guilt for the record, On October 20, 2006, the court sentenced of 28 persons named in ten separate 2002 agreed to waive all further appeals of his Sasha Andre Brown to a five-year probation- State Grand Jury indictments that charged conviction, and agreed to pay $2 million in ary term. On January 19, 2006, Brown pled defendants with racketeering, conspiracy, civil insurance fraud fines and restitution to Health Care Claims Fraud, attempted theft, 82 insurance companies. Judge Triarsi re-sen- tempted theft by deception. The defendants State v. Samantha Demetro, et al. tenced Bandy to 17 years in state prison. allegedly conspired with Eric Boyer, the al- On January 27, 2006, Bobby Eley pled While in court, Bandy tendered $1 million leged mastermind of three staged accidents guilty to conspiracy. On March 27, 2006, the representing a $170,000 civil insurance fraud which purportedly occurred between Octo- court admitted him into the PTI Program fine, and $830,000 in partial payment of a ber 1998 and October 1999, and which re- conditioned upon him paying a $2,500 civil total of $1,830,000 in restitution to 21 in- sulted in the submission of multiple phony insurance fraud fine. On February 1, 2006, surance companies identified as victims of PIP insurance claims to several insurance Steven “David” Thompson surrendered on insurance fraud during the OIFP investiga- companies. Over $204,378 in fraudulent an arrest warrant and was arraigned in tion. Bandy also provided the State with two claims were submitted to insurance compa- Bergen County Superior Court. On March mortgages on homes pledged to secure the nies as a result of this alleged illicit scheme. 27, 2006, Thompson pled guilty to con- remaining $1 million of restitution to be On January 27, 2006, the court sentenced spiracy. On May 5, 2006, the court admitted paid to the 21 insurance companies over the Alnisca Franklin to a three-year probationary him into the PTI Program and ordered him next five years. term with credit for 72 days served in county to pay $1,000 in restitution to State Farm State v. Dannie Campbell, et al. jail. She was also ordered to perform 30 Insurance Company and a $2,500 civil insur- hours of community service and pay a ance fraud fine. Dannie Campbell and ten other defen- $3,000 civil insurance fraud fine. Franklin A State Grand Jury returned an indict- dants were previously implicated in three in- pled guilty to attempted theft by deception. dictments which charged them with con- ment charging Samantha Demetro, Bobby spiracy, Health Care Claims Fraud, and at- On March 20, 2006, Shonique Carney Eley, and Steven “David” Thompson with tempted theft by deception. The State al- pled guilty to attempted theft by deception. conspiracy. Demetro was also charged with leged in the indictments that Dannie The court sentenced her on May 12, 2006, theft by deception. According to the indict- Campbell masterminded fictitious automo- to a two-year probationary term and or- ment, Demetro, Eley, and Thompson alleg- bile accidents in 1997 and 1998 that in- dered her to perform 25 hours of commu- edly conspired to submit automobile insur- volved other co-conspirators so that the co- nity service. ance property damage and bodily injury in- conspirators could treat for injuries purport- On June 19, 2006, OIFP investigators ar- surance claims relating to nine automobile edly sustained in the phony accidents and rested Ali Sawab, a/k/a Abdul Sawab, in accidents which purportedly occurred be- submit PIP insurance claims to an insurance Philadelphia on a bench warrant. He waived tween November 1998 through March 1999. company. The fictitious accidents occurred in extradition and was incarcerated in the Essex The State alleged that all nine purported au- Hillside and Newark. County Jail. The judge set bail at $50,000. On tomobile accidents allegedly occurred on the same Route 21 exit ramp located in Passaic. Ramil Robinson, pled guilty to Health August 8, 2006, Sawab pled guilty to attempted theft by deception. On October 16, The State also alleged that all nine automo- Care Claims Fraud on June 30, 2006. bile accidents involved the same cars, namely Robinson failed to appear at his sentencing 2006, the court sentenced him to a two-year probationary term with credit for 86 days a 1995 Ford Crown Victoria and a 1983 on August 21, 2006, resulting in the issuance Porsche 928. of a bench warrant for his arrest. served in county jail. The charges as to the remaining defendants are pending trial. The State further alleged that insurance Campbell previously pled guilty to Health State v. Iris Ojeda, et al. claims for these purported accidents were Care Claims Fraud and was sentenced to submitted to the following insurance compa- three years in state prison and ordered to pay On January 13, 2006, a State Grand Jury nies: American Family Mutual Insurance a $3,000 criminal fine. Nathaniel Jones, returned an indictment charging Iris Ojeda, Company, CGU/United Security Insurance Duane Smith, Shaheed Johnson also previ- her daughter, Sacha Ojeda, and Felix Nieves Company, Prudential Insurance Company, ously pled guilty to Health Care Claims with conspiracy, Health Care Claims Fraud, Pekin Insurance Company, Allstate Insurance Fraud. Jones was sentenced to two years and attempted theft by deception. According Company, State Farm Insurance Company, probation and ordered to pay a $2,500 civil to the indictment, between February 2, 2000 Selective Insurance Company, and the St. insurance fraud fine, Smith was sentenced to and May 9, 2001, Iris Ojeda, Sacha Ojeda, Paul Fire and Marine Insurance Company. three years probation and ordered to pay a and Nieves allegedly agreed to stage an auto- More than $63,000 was allegedly obtained $2,500 civil insurance fraud fine, and mobile accident for the purpose of submit- from the insurance companies for these al- Johnson was also sentenced to three years ting phony PIP and bodily injury insurance leged automobile accidents representing both probation and ordered to pay a $2,500 civil claims. The State further alleged that the property damage and bodily injury insurance insurance fraud fine. The charges as to the three staged an accident in Paterson and claims. Approximately $4,711 in claims were remaining defendants are pending trial. claimed to have suffered bodily injuries as a allegedly denied. State v. Eric Boyer, et al. result of the accident. The State further alleged that PIP applications were submitted State v. Abdullah “Wali” Islam, et al. State v. Shaquan McClaurin, et al. to the Robert Plan/GSA Insurance Company On February 6, 2006, Leon Harris, who State v. Louis McKenzie, et al. and the three began to treat for their pur- was arrested on a bench warrant, pled guilty State v. Tamika Sutton, et al. ported injuries. The Robert Plan paid out to theft by deception. On April 17, 2006, more than $25,000 including $10,907 for in- the court sentenced him to three years pro- The court sentenced three defendants in juries purportedly sustained by Iris Ojeda, bation with credit for 53 days served in 2006 who were previously named in four $5,006 for injuries purportedly sustained by county jail. The Court issued a bench war- State Grand Jury indictments charging con- Sacha Ojeda, and $10,847 for injuries pur- rant for the arrest of Glenn Johnson. He is spiracy, Health Care Claims Fraud, and at- portedly sustained by Nieves. currently a fugitive. 83 OIFP Criminal Case Notes

A State Grand Jury returned an indict- with conspiracy, theft, and attempted in the disposition of defendants prosecuted ment charging Abdullah Islam, Leon Harris, theft by deception; as part of its investigation of misconduct on Glenn Johnson, and Rodney Hammock with ■ Charles T. Smith, of Willingboro, was the part of some Motor Vehicle Commission conspiracy, Health Care Claims Fraud, and charged with theft and attempted theft by (MVC) employees. As reported earlier, this attempted theft. According to the indict- deception; and investigation was part of OIFP’s continuing ment, Islam allegedly masterminded a scheme investigation into official misconduct and in which he and the other defendants falsely fraud on the part of some State employees at claimed that an automobile accident had oc- the MVC, as well as the procurement of fic- curred on July 25, 1998, in Newark. The de- The indictment alleges that the defendants titious identification to include drivers li- fendants allegedly claimed the accident in- reported seven staged or fictitious car acci- censes, commercial drivers licenses, and volved a 1984 Ford Bronco and a 1994 dents between March 2001 and March 2003 other MVC-related documents. Many people Hyundai. Defendants allegedly submitted and filed more than $117,800 in fraudulent file false insurance claims utilizing several PIP insurance claims for approximately automobile insurance property damage different false identities. Phony drivers li- $60,250 to GSA Insurance Company. GSA claims based on those phony accidents. The censes and other false identification facilitate allegedly denied the claims because it sus- defendants, including the police officers, al- this illegal conduct. pected fraud and referred the matter to legedly provided false information for police State v. Rita Okolo, et al. OIFP for investigation. Islam and Hammock accident reports from the Roselle and previously pled guilty to attempted theft by Plainfield Police Departments that were A State Grand Jury returned an indict- deception. The court sentenced Hammock to used to substantiate the auto accident claims. ment charging Rita Okolo, an MVC em- two years probation, and Islam was sen- Claims were allegedly filed with Progressive ployee, with multiple counts of conspiracy, tenced to four years probation and ordered Insurance Company, Great American Insur- official misconduct, sale of a simulated to pay a $200 criminal fine. ance Company, Clarendon National Insur- document, and bribery in official matters. A second indictment charged Josefina Martinez State v. Creative Auto Body, et al. ance Company, State Farm Insurance Com- pany and Liberty Mutual Insurance Com- and Fermin Capellan each with conspiracy On December 6, 2006, a State Grand Jury pany. Approximately $94,200 was allegedly and bribery in official matters. According to returned a superseding indictment charging paid by the insurance companies. the indictments, Okolo allegedly accepted a seven individuals, as well as two police offic- $500 bribe from Capellan to provide him ers. John A. Smith, who is currently a police In connection with this OIFP investiga- with a fictitious commercial drivers license officer with the Borough of Roselle, was tion, on December 1, 2006, the court admit- in the name of Josefina Martinez. The State charged with conspiracy, official misconduct, ted Scot L. Frasier into the PTI Program alleged in the indictment that Martinez was and theft by deception. Samad Abdel, who is conditioned upon him paying $17,747 in res- issued a commercial drivers license without currently a police detective with the City of titution and performing 60 hours of commu- taking the commercial drivers license exam. nity service. On May 18, 2006, Frasier pled Plainfield, was charged with conspiracy, offi- Okolo pled guilty to official misconduct. cial misconduct, attempted theft by decep- guilty to theft by deception. Frasier allegedly submitted two separate auto property dam- On February 17, 2006, the court sentenced tion, and theft by deception. On December her to 364 days in county jail as a condition 18, 2006, Abdel pled guilty to two counts of age insurance claims based on two accidents which never occurred. of four years probation. Martinez pled guilty official misconduct. He is scheduled to be to conspiracy to commit official misconduct. sentenced in 2007. In the first purported accident, Frasier al- On February 17, 2006, the court sentenced The seven other defendants were charged legedly claimed that his 1997 Nissan Maxima her to three years probation. Capellan pled as follows: collided with a Mercedes Benz driven by an- guilty to conspiracy. On February 24, 2006, ■ other driver in Plainfield. It is alleged that the court sentenced him to three years pro- Marco Rebelo, of Avenel, the owner and this accident never occurred. Liberty Mutual operator of Creative Auto Body on 409 bation and ordered him to perform 100 paid approximately $4,911 to Frasier for hours of community service. East First Avenue in Roselle, was charged damage to his 1997 Nissan and Liberty Mu- with conspiracy, misconduct by a corpo- tual paid approximately $25,000 for damage State v. Esterlina Marin, et al. rate official, and tampering with public to the Mercedes Benz. The second accident On February 10, 2006, the court admitted records or information; purportedly occurred in Linden. Frasier al- Esterlina Marin into the PTI Program condi- ■ Eli Vasquez, currently incarcerated at legedly submitted a false insurance claim to tioned upon her performing 25 hours of Bayside State Prison, was charged with State Farm claiming that his 1997 Nissan community service and paying a $4,000 conspiracy, theft, and attempted theft by collided with a 1989 Honda Civic. State criminal fine. Esterlina Marin pled guilty to deception; Farm paid approximately $11,747 to Frasier an Accusation charging her with official mis- ■ Danny DaCosta, of Elizabeth, was on the claim because the Nissan was suppos- conduct. The State alleged that Esterlina charged with conspiracy, theft, and at- edly totaled. Marin, a clerk at the Lodi branch of the tempted theft by deception; Fictitious Insurance Identification MVC, at the request of her brother, Ivan Marin, assisted in obtaining four drivers li- ■ Cards and Motor Vehicle Documents Rogerio Neves, of Elizabeth, was charged censes for individuals by allegedly falsifying with conspiracy, theft, and attempted Motor Vehicle Commission official MVC documents. Specifically, she al- theft by deception; (MVC) Investigations legedly claimed that she had reviewed the ■ Rui Correia, of Elizabeth, was charged In 2006, OIFP continued to make strides birth certificates of four applicants when, in 84 fact, she had not reviewed birth certificates fraudulent, MVC personnel referred the identification card to a Perth Amboy City for those applicants. matter to OIFP. Johnson had failed to ap- police officer. On January 27, 2006, Ivan Marin pled pear at her arraignment on February 21, State v. Vernard K. Carter, Jr. guilty to an Accusation charging him with 2006, and the court issued a bench warrant for her arrest. On May 12, 2006, the court sentenced official misconduct. On March 17, 2006, Vernard K. Carter, Jr., to three years proba- the court sentenced him to one year proba- State v. Mario Bonillo tion. On March 13, 2006, Carter pled guilty tion and ordered him to pay a $4,000 crimi- On April 26, 2006, Mario Bonillo pled to and indictment charging him with simu- nal fine. guilty to simulating a motor vehicle insur- lating a motor vehicle insurance identifica- State v. Stacey Chestnut ance identification card. On the same day, tion card. According to the indictment, On March 10, 2006, the court sentenced the court admitted him into the PTI Pro- Carter allegedly exhibited a counterfeit Pru- Stacey Chestnut to one year probation. gram conditioned upon him performing 60 dential Insurance Company auto insurance Chestnut previously pled guilty after a State hours of community service. A Union identification card when he was having his Grand Jury returned an indictment charging County Grand Jury returned an indictment 1990 Honda Accord inspected at the her with official misconduct. According to on January 25, 2006, charging Bonillo with Plainfield MVC Inspection Station. Suspect- the indictment, Chestnut, in her capacity as simulating a motor vehicle insurance identifi- ing the card was fraudulent, MVC personnel an employee of the Wayne MVC facility location card. According to the indictment, referred the matter to OIFP. cated on Route 23, created two fictitious Bonillo allegedly exhibited a counterfeit State v. Edith Munoz Allstate Insurance Company auto insurance motor vehicle forms for two people who On March 24, 2006, the court ordered were not named in the indictment. Chestnut identification card when he was having his 1987 Mazda inspected at the Plainfield Edith Munoz to pay a $200 criminal fine af- created and processed an application for a ter he pled guilty to a disorderly persons of- duplicate non-photo drivers license and an MVC Inspection Station. Suspecting the card was fraudulent, MVC personnel re- fense of simulating a motor vehicle insur- application for a drivers examination permit ance identification card. Munoz admitted for a commercial drivers license (CDL). ferred the matter to OIFP. Bonillo had failed to appear at his arraignment on Feb- that he presented a counterfeit Allstate In- Fictitious Insurance ruary 21, 2006, and the court issued a surance Company motor vehicle insurance Identification Card Cases bench warrant for his arrest. identification card to a Perth Amboy police officer during a traffic stop for a motor ve- State v. Wilberta Johnson State v. John W. Noone hicle violation. On February 17, 2006, the court sen- On April 17, 2006, John W. Noone pled State v. Timothy D. Jones tenced Wilberta Johnson to three years pro- guilty to an indictment charging him with bation. Johnson pled guilty to presenting a simulating a motor vehicle insurance identifi- On February 10, 2006, the court ordered false insurance identification card. A State cation card. On June 23, 2006, the court Timothy D. Jones to pay a $155 criminal Grand Jury returned an indictment charging sentenced him to one year probation. Ac- fine. On the same day, Jones pled guilty to a Johnson with simulating a motor vehicle in- cording to the indictment, Noone presented disorderly persons offense of simulating a surance identification card and manufactur- a counterfeit Liberty Mutual Insurance Com- motor vehicle insurance identification card. ing a false insurance card. According to the pany auto insurance identification card to an Jones admitted that he presented a counter- indictment, Johnson allegedly exhibited a Edison Township police officer. feit Prudential Insurance Company auto insurance identification card to a State phony Clarendon Insurance Company auto State v. Fernando Nunez insurance identification card when she was Trooper during a traffic stop for a motor having her 2002 Kia inspected at the On June 1, 2006, Fernando Nunez pled vehicle violation. Plainfield MVC Inspection Station. Suspect- guilty to an indictment charging him with State v. Zyvritic Penn ing the card was fraudulent, MVC personnel simulating a motor vehicle insurance identifi- On May 12, 2006, the court admitted contacted OIFP. cation card. On August 11, 2006, the court sentenced him to three years probation. Ac- Zyvritic Penn into the PTI Program condi- State v. Lisa Johnson cording to the indictment, Nunez presented tioned upon her performing 50 hours of On May 5, 2006, the court sentenced Lisa a counterfeit Liberty Mutual Insurance Com- community service. On March 29, 2006, Johnson to three years probation. On March pany auto insurance identification card to a Penn pled guilty to an Accusation charging 13, 2006, Johnson pled guilty to simulating a New Jersey State Trooper. her with simulating a motor vehicle insurance identification card. Penn allegedly pre- motor vehicle insurance identification card. State v. Mauro Sandoval-Pujois A Union County Grand Jury returned an in- sented a counterfeit Prudential Commercial dictment on January 25, 2006, charging On July 26, 2006, the court admitted Insurance Company auto insurance identifi- Johnson with simulating a motor vehicle in- Mauro Sandoval-Pujois into the PTI Pro- cation card when she was having her car insurance identification card. According to the gram. On February 16, 2006, a Middlesex spected at the Eatontown MVC Inspection indictment, Johnson allegedly exhibited a County Grand Jury returned an indictment Station. Suspecting the card was fraudulent, counterfeit Prudential Property and Casualty charging Sandoval-Pujois with simulating a MVC personnel referred the matter to OIFP. Insurance Company auto insurance identifi- motor vehicle insurance identification card. State v. Kareem H. Ross cation card when she was having her 1991 According to the indictment, Sandoval- On April 13, 2006, the court sentenced GEO inspected at the Plainfield MVC In- Pujois allegedly presented a counterfeit State Kareem H. Ross to three years probation spection Station. Suspecting the card was Farm Indemnity Company auto insurance with credit for eight days spent in county 85 OIFP Criminal Case Notes

jail. On February 24, 2006, Ross pled guilty Nelson Ferrer. The undercover investigator State v. Daniel Rosa to an Accusation charging him with simulat- paid $400 for the card. Jeffrey Ferrer alleg- On October 24, 2006, Daniel Rosa pled ing a motor vehicle insurance identification edly retained $175 and gave the balance of guilty to an Accusation charging him with card. Ross admitted that he displayed a the money to his father. simulating a motor vehicle insurance identifi- fraudulent Liberty Mutual Insurance Com- State v. Patricia Wilson cation card. Rosa admitted that, following a pany auto insurance identification card to an motor vehicle accident in which he was in- Orange police officer. On June 20, 2006, a Burlington County Grand Jury returned an indictment charging volved, he presented a phony Public Service State v. Andres Zapata-Quisqueya Patricia Wilson with simulating a motor ve- Mutual Insurance Company auto insurance On March 10, 2006, the court sentenced hicle insurance identification card. According identification card to a Passaic police officer. Andres Zapata-Quisqueya to two years pro- to the indictment, Wilson allegedly presented He will be sentenced in early 2007. bation. Zapata-Quisqueya pled guilty to an a phony Allstate Insurance Company auto State v. Latosha R. Smith indictment charging him with simulating a insurance identification card to a Beverly On December 18, 2006, Latosha R. Smith motor vehicle insurance identification card. City police officer during a traffic stop. pled guilty to an indictment charging her According to the indictment, Zapata- State v. Angela Caruso with simulating a motor vehicle insurance Quisqueya allegedly presented a counterfeit On October 13, 2006, the court admitted identification card. On the same day, she was New Jersey Manufacturers Insurance Com- sentenced to one year probation. According pany auto insurance identification card to Angela Caruso into the PTI Program. On August 7, 2006, Caruso pled guilty to an Ac- to the indictment, Smith presented a phony an inspector at the Plainfield MVC Inspec- Proformance Insurance Company auto insur- tion Station. cusation charging her with simulating a motor vehicle insurance identification card. ance identification card to a Burlington City State v. Natasha V. Crisp Caruso allegedly presented a phony police officer during a routine traffic stop. On April 28, 2006, the court sentenced Proformance Insurance Company auto insur- State v. Salvatore L. Vitale Natasha V. Crisp to two years probation. ance identification card to a Beverly City po- On June 12, 2006, a Monmouth County Crisp pled guilty on February 14, 2006, to an lice officer during a traffic stop. Grand Jury returned an indictment charging indictment charging her with simulating a State v. Jessica M. Lee Salvatore L. Vitale with simulating a motor motor vehicle insurance identification card. vehicle insurance identification card. Ac- According to the indictment, Crisp allegedly On September 26, 2006, Jessica M. Lee pled guilty to an indictment charging her cording to the indictment, on August 19 and exhibited a phony Prudential Insurance August 20, 2004, Vitale allegedly created a Company auto insurance identification card with simulating a motor vehicle insurance identification card. She is scheduled to be phony motor vehicle insurance identification when she was having her 1997 Dodge In- card and also allegedly exhibited or displayed trepid inspected at the Plainfield MVC In- sentenced early in 2007. According to the indictment, Lee allegedly presented a a different phony insurance identification spection Station. MVC personnel suspected card to an Englishtown police officer. the card was fraudulent and referred the counterfeit Allstate Insurance Company matter to OIFP. auto insurance identification card to an With respect to the insurance identifica- inspector at the Eatontown MVC Inspec- tion card which the indictment alleges was State v. Jeffrey Ferrer, et al. tion Station. produced, it purportedly represented that On May 22, 2006, Bernardo Santiago pled State v. Roscoe Henderson Vitale was insured by the New Jersey Ex- guilty to an Accusation charging him with change Insurance Company and that a valid producing a phony motor vehicle insurance On June 9, 2006, the court sentenced policy of automobile insurance was in effect identification card. On July 17, 2006, the Roscoe Henderson to three years in state from October 29, 2003, to October 29, court admitted Santiago into the PTI Pro- prison. On April 10, 2006, Henderson pled 2004. The insurance policy purportedly cov- gram. Santiago allegedly sold fraudulent mo- guilty to an Accusation charging him with ered a 1996 Chevrolet. The State alleges that tor vehicle identification cards to a co- sale of a simulated document. Henderson the card was phony. worker, Nelson Ferrer. admitted that he sold a fictitious drivers license to a New Jersey State Police Detective The State also alleges that Vitale displayed The court previously admitted Jeffrey who was operating in an undercover capacity a different counterfeit automobile insurance Ferrer into the PTI Program. The court sen- as part of an OIFP investigation into the un- identification card to an Englishtown police tenced Nelson Ferrer to one year probation. lawful manufacture and sale of fictitious officer. That card allegedly indicated that a Jeffrey Ferrer and his father, Nelson Ferrer, drivers licenses, motor vehicle inspection 2001 Mercedes Benz automobile was cov- pled guilty to separate Accusations charging stickers, and other related MVC documents. ered with a policy of automobile insurance them with simulating a motor vehicle insur- During the course of the investigation, issued by Allstate Insurance Company for the ance identification card. Jeffrey Ferrer alleg- Henderson sold a fictitious drivers license period August 19, 2004, to August 19, 2005. edly assisted in obtaining and selling a and a fictitious automobile insurance identi- State v. John Musso phony Countryway Insurance Company auto fication card. Henderson was previously ar- On September 18, 2006, John Musso pled insurance identification card. An under- rested after selling the phony insurance card cover OIFP investigator allegedly ap- guilty to tampering with public records and for $75 at a restaurant located in Rahway. information. On November 17, 2006, the proached Jeffrey Ferrer seeking to buy a Evidence was seized, including a computer phony auto insurance identification card. court sentenced him to one year probation believed to be used in unlawfully manufac- and ordered him to forfeit his public employ- Jeffrey Ferrer allegedly indicated that he turing fictitious documents. would be able to obtain the card from ment. A Cumberland County Grand Jury re- 86 turned an indictment on June 7, 2006, charg- hicle insurance identification card. Accord- Francerly Padilla with simulating a motor ing Musso with tampering with public ing to the indictment, Diaz-Mata was in- vehicle insurance identification card. Ac- records or information and simulating a mo- volved in a motor vehicle accident and al- cording to the indictment, Padilla allegedly tor vehicle insurance identification card. Ac- legedly provided a phony New Jersey Re- presented a fraudulent Allstate Insurance cording to the indictment, between Decem- Insurance Company auto insurance identifi- Company auto insurance identification card ber 28, 2004 and January 8, 2005, Musso al- cation card to a police officer at the scene to an inspector at the Rahway MVC Inspec- legedly presented a fictitious insurance iden- of the accident. tion Station. tification card to the MVC Inspection Sta- State v. Cecilio Casablanca State v. Charles R. Bright tions at Millville and Bridgeton. The alleged false insurance identification card reflected On November 29, 2006, an Essex County On August 21, 2006, a Monmouth County that Selective Insurance Company provided Grand Jury returned an indictment charging Grand Jury returned an indictment charging insurance for Musso’s automobile when, in Cecilio Casablanca with simulating a motor Charles R. Bright with simulating a motor fact, Musso had no insurance. The State fur- vehicle insurance identification card. Ac- vehicle insurance identification card. Ac- ther alleged that Musso falsely registered a cording to the indictment, Casablanca was cording to the indictment, Bright allegedly 1990 Dodge Caravan by representing that it involved in a motor vehicle accident and al- presented a fraudulent Prudential Insurance was covered by a Liberty Mutual Insurance legedly provided a phony New Jersey Manu- Company auto insurance identification card group policy when, in fact, it was not. facturers Insurance Company auto insurance to an inspector at the Eatontown MVC In- identification card to a Belleville police of- spection Station. State v. Larry Murphy, et al. ficer at the scene of the accident. State v. Tinyetta Watkins On September 6, 2006, a Mercer County State v. Maria D. Colon Cifuentes Grand Jury returned an indictment charging On October 2, 2006, the court admitted Larry Murphy and his wife Charlotte Murphy On November 3, 2006, a Union County Tinyetta Watkins into the PTI Program con- with conspiracy, simulating a motor vehicle Grand Jury returned an indictment charging ditioned upon her performing 50 hours of insurance identification card, tampering with Maria D. Colon Cifuentes with simulating a community service. On July 12, 2006, a Mer- public records, and falsifying records. Ac- motor vehicle insurance identification card. cer County Grand Jury returned an indictment cording to the indictment, between July 1, According to the indictment, Colon charging Watkins with simulating a motor ve- 2005 and September 30, 2005, Larry and Cifuentes presented a fictitious Amica Insur- hicle insurance identification card. According Charlotte Murphy allegedly produced and ance Company auto insurance identification to the indictment, Watkins was involved in a sold phony automobile insurance identifica- card to a motor vehicle inspector at the motor vehicle accident. Watkins allegedly pre- tion cards. Specifically, the State alleged that Plainfield MVC Inspection Station. sented a fraudulent First Trenton Indemnity they conspired to produce a phony Liberty State v. Rafael Ottenwalder Company auto insurance identification card to Mutual Insurance Company auto insurance the police officer who responded to the scene On October 12, 2006, Rafael of the accident. identification card and a phony State Farm Ottenwalder pled guilty to an Accusation Insurance Company auto insurance identifi- charging him with sale of a simulated New State v. Dante M. Fox cation card in the name of Kai A. Harris. On Jersey drivers license and sale of a simulated On November 28, 2006, a Burlington October 15, 2005, Charlotte Murphy was motor vehicle insurance identification card. County Grand Jury returned an indictment arrested by the New Jersey State Police in Ottenwalder admitted that in May and June charging Dante M. Fox with simulating a mo- connection with allegedly registering a car of 2005, he knowingly sold a fictitious New tor vehicle insurance identification card. Ac- using a phony Prudential Insurance Company Jersey drivers license and a fictitious New cording to the indictment, Fox presented a auto insurance identification card. On Sep- Jersey auto insurance identification card to fraudulent CAN Insurance Company auto in- tember 29, 2005, Larry Murphy was arrested an undercover OIFP investigator in Union surance identification card to a Burlington City and charged in connection with the alleged City. Ottenwalder is scheduled to be sen- police officer during a routine traffic stop. phony insurance identification card scam. tenced in early 2007. State v. Marta L. Sanaallah The arrests were the result of an under- State v. Miguel Torres cover investigation conducted by OIFP in- On September 8, 2006, a Union County vestigators into the production and sale of On December 6, 2006, Miguel Torres pled Grand Jury returned an indictment charging phony insurance identification cards. Fake guilty to an Accusation charging him with Marta Sanaallah with simulating a motor ve- insurance identification cards are sold on simulating a motor vehicle insurance identifi- hicle insurance identification card. According the street for prices ranging from $200 to cation card. Torres admitted that he pre- to the indictment, Sanaallah allegedly presented $500. They are displayed to police officers sented a counterfeit American National Fire a fraudulent Allstate Insurance Company auto and MVC officials so that it appears that Insurance Company auto insurance identifi- insurance identification card to an inspector at the person showing a fake insurance identi- cation card to a West New York police of- the Rahway MVC Inspection Station. fication card has the appropriate automo- ficer following an automobile accident in State v. Leonna Brown bile insurance. which he was involved. He is scheduled to be sentenced in 2007. On September 22, 2006, the court admit- State v. Juan Diaz-Mata ted Leonna Brown into the PTI Program. State v. Francerly Padilla On October 31, 2006, a Passaic County On July 17, 2006, Brown pled guilty to an Grand Jury returned an indictment charging On September 8, 2006, a Union County Accusation charging her with attempted Juan Diaz-Mata with simulating a motor ve- Grand Jury returned an indictment charging theft by deception. Brown allegedly was in- 87 OIFP Criminal Case Notes

volved in a motor vehicle accident in Phila- ful taking, receiving stolen property, and Ian Boyington - On October 12, 2006, a delphia in which she struck a parked car. She fencing. The State alleged that the defen- summons was issued and Boyington was also allegedly presented a phony State Farm dants conspired to steal 16 motorcycles val- charged with possession of a motor vehicle Indemnity Company auto insurance identifi- ued at approximately $97,225 in Burlington with an altered vehicle identification number cation card to the owner of the vehicle she County. The State further charged defen- (VIN), and a motor vehicle title offense; struck. When the owner of the struck ve- dants with 23 separate instances of allegedly Neil Moyer - On November 8, 2006, a hicle submitted a claim to State Farm, State receiving stolen motorcycles valued at ap- summons was issued and Moyer was charged Farm determined that the card was fraudu- proximately $153,557, and 12 separate in- with receiving stolen property and fencing; lent and referred the matter to OIFP for instances of allegedly fencing stolen motor- vestigation. cycles valued at approximately $83,857. Steven Capers was arrested on November 30, 2006, and charged with receiving stolen State v. Karen Y. Schenck-Heuston The investigation is continuing and further property, unlawful taking, possession of a On September 27, 2006, a Somerset charges are anticipated. The following dispo- motor vehicle with an altered vehicle identi- County Grand Jury returned an indictment sitions occurred in 2006: fication number (VIN), a motor vehicle title charging Karen Y. Schenck-Heuston with On August 7, 2006, Janine Barnes pled offense, and tampering with public records simulating a motor vehicle insurance identifi- guilty to an Accusation charging her with re- or information; cation card. According to the indictment, ceiving stolen property. On November 3, Gabriel Allen Evans was arrested on De- Schenck-Heuston presented a counterfeit 2006, the court sentenced her to a one-year cember 6, 2006, and charged with theft by Maryland Casualty Insurance Company auto probationary sentence and ordered her to pay unlawful taking, receiving stolen property, insurance identification card to the State Po- $1,592 in restitution to GEICO Insurance and alteration of a motor vehicle identifica- lice while attempting to obtain her vehicle Company and $675 in restitution to Rider tion number (VIN); from a State Police impound lot. Insurance Company. Jeffrey Morgan was arrested on December State v. Alfred R. Cole Randolph Brolo pled guilty to an Accusa- 6, 2006, and charged with theft by unlawful On November 27, 2006, an Essex County tion charging him with receiving stolen prop- taking, receiving stolen property, alteration Grand Jury returned an indictment charging erty. On January 6, 2006, the court sen- of a motor vehicle identification number Alfred R. Cole with simulating a motor ve- tenced him to two years probation. (VIN), and fencing; hicle insurance identification card. According Rodney Butler pled guilty to an Accusa- Gregory Kellum - On December 12, to the indictment, on April 7, 2006, Cole tion charging him with receiving stolen 2006, a summons was issued and Kellum presented a counterfeit New Jersey Manufac- property. On January 27, 2006, the court was charged with theft by unlawful taking turers auto insurance identification card to a sentenced him to a one-year probationary and receiving stolen property. Verona police officer while attempting to get sentence and ordered him to pay $1,861 his 1994 Lexis released from the police de- in restitution. Operation Wire Harness partment impound lot. On January 27, 2006, Rodney West State v. Reyniz Moran, et al. Vehicle Theft pled guilty to an Accusation charging him The Fort Lee Police Department arrested with Insurance Fraud. On March 17, Reyniz Moran, Edward Peralta, and Wilson Operation Ninja I 2006, the court sentenced him to a two- Burgos during a traffic stop. All were charged State v. Torray A. Murphy, et al. year probationary sentence and ordered with possession of burglary tools, possession him to pay $2,350 in restitution to Rider of motor vehicle master keys, and receiving OIFP and the State Police conducted a Insurance Company. stolen property. Fort Lee Police contacted joint investigation of a conspiracy to steal OIFP because they obtained evidence consis- motorcycles, to alter the Vehicle Identifica- On June 5, 2006, David Schall pled guilty to an Accusation charging him with alteration tent with theft of cars and motorcycles. Ad- tion Number (VIN) of each motorcycle to ditional charges against Moran and Peralta conceal the true identity and ownership of of motor vehicle identification numbers. On December 12, 2006, the court admitted him were filed including receiving stolen prop- the motorcycles in a process known as erty, alteration of VINs, and possession with “stamping,” and to otherwise obtain false into the PTI Program conditioned upon him paying $2,500 in restitution. intent to distribute. The case is pending title documents and registrations for the Grand Jury action. stolen materials. As a result of the joint in- On June 12, 2006, Alan Barbosa pled vestigation, 23 persons were arrested on guilty to an Accusation charging him with State v. Krzysztof Walentynowicz, et al. May 4, 2005, for their roles in a motorcycle receiving stolen property. On the same day, On October 16, 2006, Krzysztof theft ring that operated in Mercer and the court sentenced him to a one-year proba- Walentynowicz pled guilty to receiving sto- Burlington Counties. The defendants were tionary sentence. len property. On December 11, 2006, the variously charged with racketeering, con- Operation Ninja II court sentenced him to three years probation spiracy, Insurance Fraud, receiving stolen and ordered him to perform 60 hours of property, and fencing. State v. Ian Boyington, et al. community service. On July 26, 2006, a Among the 23 persons arrested were Kyle In this continuing joint State Police and Union County Grand Jury returned an in- J. Bunn, Ronald R. Crosland, Gregory OIFP investigation, the following defen- dictment charging Walentynowicz with re- Haygood, Jamar L. Doggett, and John White, dants were issued summonses or were ar- ceiving stolen property and prohibited alter- who were each charged with theft by unlaw- rested in 2006: ation of motor vehicle trademark or identifi- 88 cation number. According to the indictment, amounts ranging from $25,000 to $100,000. ued to practice chiropractic medicine for ap- in Cranford, Walentynowicz allegedly pos- These cases are pending presentation to the proximately four years in Little Falls Town- sessed a 2001 BMW 330, a 2001 Audi S4, a Grand Jury. ship in Passaic County and South Orange in 2002 Jeep Grand Cherokee, a 2002 Jeep State v. Jose Suarez, et al. Essex County even though his license had Limited, a 2002 GMC Denali, and two 2002 been suspended by the Board of Chiropractic Cadillac Escalades, knowing they were sto- On November 15, 2006, OIFP investiga- Examiners on several occasions. len. The State alleged that Walentynowicz tors obtained an arrest warrant for Jose Suarez. Suarez was charged with receiving Despite not having a valid license to possessed these automobiles in order to re- practice chiropractic medicine, Potacco tag them or chop them into parts. stolen property and leader of an auto trafficking network. The State alleged that Suarez billed automobile insurance companies for conspired with others to dispose of and trans- treating automobile accident patients under port stolen vehicles, including four motor- their PIP insurance. Potacco billed approxi- cycles and at least ten stolen automobiles. mately $98,175 to multiple carriers. The insurance companies paid Potacco approxi- As part of the Suarez investigation, on mately $48,022. November 15, 2006, OIFP investigators obtained arrest warrants for Janny Lopez and State v. William Burke, et al. Joshua Provost. Provost and Lopez were A State Grand Jury returned an indict- charged with receiving stolen property, in- ment charging William Burke and cluding an allegedly stolen Yamaha motor- licensed cardiologists, with cycle and a Nissan 350Z automobile. conspiracy, Health Care Claims Fraud, and On August 16, 2006, Lukasz Zalewski State v. Luis Marte attempted theft by deception. According to pled guilty to an Accusation charging him the indictment, Burke prac- with receiving stolen property. Zalewski ad- On December 8, 2006, a Union County ticed at Orange Mountain Medical Associates mitted that he had possession of a 2002 Jeep Grand Jury returned an indictment charging which had offices located in West Orange, Limited, a 2001 BMW 330, a 2001 Audi S4, Luis Marte with conspiracy, receiving stolen Berkeley Heights, and Millburn. They alleg- a 2002 Jeep Grand Cherokee, a 2002 GMC property, and attempted fencing. According edly submitted false insurance claims to in- Denali, and two 2002 Cadillac Escalades, to the indictment, between November 14, surance companies between January 1,1997, knowing they were stolen. Zalewski admit- 2003 and January 4, 2006, Marte allegedly and February 5, 2002. The State alleged that ted that he possessed these automobiles in conspired with others, who were not further the doctors agreed to prescribe unnecessary order to re-tag them or chop them into parts. identified in the indictment, to take posses- cardiac diagnostic tests that were inconsis- He is scheduled to be sentenced in 2007. sion of a stolen 2004 Cadillac Escalade. The tent with their patients’ ailments. The State State v. Jaguar Kevin Reed State alleges that Marte illegally obtained a also alleged that although the patients had Michigan title for the Cadillac Escalade, On August 8, 2006, an Essex County insufficient cardiac symptoms to justify the which was allegedly stolen from an auto administration of stress tests and electrocar- Grand Jury returned an indictment charging dealership in Great Neck, New York. Fre- Jaguar Kevin Reed with receiving stolen diograms, the doctors administered those quently, persons who traffic in stolen cars procedures and allegedly provided question- property. According to the indictment, on obtain out-of-state automobile titles and re- July 18, 2005, Reed allegedly knowingly pos- able cardiac-related diagnoses in order to bill tag or change the Vehicle Identification insurance companies for the cardiac-related sessed and sold a re-tagged Cadillac Escalade. Numbers (VIN) on stolen cars to conceal the A re-tagged automobile is an automobile in medical tests at a higher specialist rate. The true identity of the car and the fact that it doctors allegedly submitted fraudulent bills which the VIN is removed so that another has been stolen. VIN can be inserted. By changing the VIN to multiple insurance companies, including plates, thieves are able to conceal the true Prudential Insurance Company and Aetna HEALTH, LIFE, Insurance Company. The insurance compa- identity of the car and the fact that it has AND DISABILITY FRAUD been reported stolen. This facilitates resale nies received at least $35,000 in allegedly of the car. Fraudulent Health and Disability Claims false bills. Burke are scheduled to go on trial in 2007. Operation Rice Burners by Health Care Providers State v. W. Lance Kollmer State v. Michael Campo, et al. State v. Philip Potacco On January 20, 2006, the court sentenced On May 8, 2006, W. Lance Kollmer pled On November 1, 2006, OIFP investiga- guilty to theft by deception. On September tors obtained arrest warrants for nine tar- Philip Potacco to three years probation and ordered him to pay $48,000 in restitution to 7, 2006, the court sentenced Kollmer to gets, Michael Campo, Ramon Carrillo, three years in state prison and ordered him to Reginald Lee, Ronald Bennett a/k/a “Fat New Jersey Manufacturers Insurance Com- pany, First Trenton Insurance Company, and pay $925,171 in restitution and a $100,000 Man,” Frazier Gibson, Eddie Lee, Ajon civil insurance fraud fine. Rodgers, James Campbell, and an unidenti- State Farm Insurance Company. Potacco pled fied person known only as “T.” Also, search guilty to theft by deception. A State Grand A State Grand Jury previously returned warrants were executed at a residence and a Jury previously returned an indictment charg- three separate indictments against Kollmer. The third indictment charged Kollmer, a garage. The defendants were charged with ing Potacco with Health Care Claims Fraud receiving stolen property and bail was set at and attempted theft by deception. According board certified plastic surgeon, with theft by to the indictment, Potacco allegedly contin- deception and attempted theft by deception. 89 OIFP Criminal Case Notes

Kollmer submitted allegedly false insurance to the patients. Anodide also submitted ing records. According to the indictment, be- claims between August 2001 and March claims for Sunday dental services when the tween July 2, 1999 and September 5, 2000, 2004, to U.S. Life/American General Insur- dental office was closed on Sundays. Ac- Radowitz allegedly billed both Allstate In- ance Company and the Hartford Insurance cording to the indictment, Anodide also sub- surance Company and the California State Company falsely claiming he was totally dis- mitted claims for crowns and root canals Workers’ Compensation Insurance Fund for abled, unable to practice medicine, and en- that were allegedly performed twice on the multiple chiropractic services allegedly pro- titled to be reimbursed for office overhead same tooth. Anodide submitted fraudulent vided to two patients. The State alleged that expenses and other disability insurance claim claims to several insurance carriers, including the chiropractic services billed to Allstate payments. U.S. Life/American General In- Prudential Health Care of New Jersey, Aetna and the California State Workers’ Compensa- surance Company and the Hartford Insur- US Healthcare, and Delta Dental Insurance tion Insurance Fund were not rendered even ance Company paid approximately $614,825 Company. Prudential was the third party though Radowitz billed for them. The State for these claims through January 2004. claims administrator for the New Jersey further alleged that Radowitz billed on ap- The first indictment charged Kollmer with State Health Dental Plan that provides den- proximately 179 dates for approximately submitting false disability insurance claims to tal services to State employees. Prudential $16,000 in chiropractic treatments never Sentry Insurance Company and American processed Anodide’s allegedly fraudulent rendered to two patients. General Insurance Company. Kollmer alleg- dental insurance claims that were paid with State v. Eugene Ruta, et al. State money. edly obtained more than $300,000 in fraudu- On April 3, 2006, Eugene Ruta pled guilty lent insurance claim money from Sentry In- State v. Craig W. Gordon to conspiracy and Health Care Claims Fraud. surance Company and American General In- On May 9, 2006, Craig W. Gordon pled On the same day, Andrew Farro pled guilty surance Company by falsely claiming he was guilty to Health Care Claims Fraud and to to conspiracy to commit Health Care Claims totally disabled from practicing as a plastic the practice of medicine by an unlicensed Fraud and Criminal Use of Runners. On surgeon. However, Kollmer allegedly per- person. On June 9, 2006, the court sen- September 22, 2006, the court sentenced formed dozens of surgical procedures during tenced him to five years probation and or- Ruta to 364 days in county jail as a condition the claimed disability period. The second in- dered him to pay a $1,100 criminal fine. of three years probation. Farro will be sen- dictment charged Kollmer with theft by de- tenced in 2007. A State Grand Jury previ- ception. Kollmer allegedly falsely claimed he On January, 4, 2006, a Morris County Grand Jury returned an indictment charging ously returned an indictment charging Ruta was totally disabled, and, pursuant to a con- and Farro with conspiracy, Health Care tract between himself and Unum Provident Gordon with Health Care Claims Fraud, theft by deception, and practice of medicine Claims Fraud, and Criminal Use of Runners. Corporation, entitled to a waiver of $9,000 Ruta was a licensed chiropractor formerly in life insurance premiums. by an unlicensed person. According to the indictment, between January 26, 2000 and employed at Valley Total Health Center in Fraudulent Billing by Health Care January 9, 2001, Gordon, a doctor who was Orange. Farro was also formerly employed as Providers licensed to practice medicine in the State of an office manager at Valley Total Health Center. According to the indictment, Farro State v. Paul Anodide New York but whose license was revoked in March1995, operated a business known as allegedly agreed to pay a “runner,” who was On April 28, 2006, the court sentenced GFM Health Services which operated out of cooperating with OIFP, $500 for every pa- Paul Anodide to four years probation. He Gordon’s residence in Chatham, New Jersey. tient the “runner” could bring to Valley Total was also sentenced to 180 days in county jail, Gordon caused fraudulent claims to be sub- Health Center. The indictment further al- suspended on the condition that he serve 20 mitted to Horizon Blue Cross Blue Shield of leged that insurance claims were submitted days in the SLAP program. The court or- New Jersey through the Medicare program to an insurance company for patients solic- dered him to perform 100 hours of commu- for treatments to two patients. The State al- ited for Valley Total Health Center, in addi- nity service and pay a $5,000 criminal fine. leged that the claims created the false im- tion to claims for chiropractic services that His dentist’s license was suspended for life pression that health care services had been were never rendered to patients. The pa- and he was barred from applying for rein- provided by Jaime Ligot, M.D., when, in tients the “runner” solicited, and another statement of his license. Anodide pled guilty fact, they were either provided by Gordon, person to whom Farro paid money as a “run- to theft by deception. A State Grand Jury who is not a licensed practitioner, or not ner,” were all undercover OIFP investiga- previously returned an indictment charging provided at all. The State alleged that Hori- tors. Additionally, an undercover Newark Anodide with Health Care Claims Fraud, zon Blue Cross Blue Shield of New Jersey police officer posed as a patient. The indict- theft by deception, and falsifying records. paid approximately $10,966 in fraudulent ment charged that the defendants paid ap- According to the indictment, Anodide, a li- claims submitted by Gordon. proximately $2,000 to persons who posed as censed dentist with an office in Trenton, “runners.” submitted bills to three insurance carriers for State v. Mark Radowitz The State further alleged in the indictment approximately 28 patients with more than On April 21, 2006, the court sentenced that Ruta committed Health Care Claims 75 allegedly fraudulent dental insurance Mark Radowitz to three years in state prison Fraud by permitting his office manager, claims. The claims totaled approximately and ordered him to pay $16,700 in restitu- Farro, to submit claims to insurance compa- $85,914 and the carriers paid approximately tion. On January 30, 2006, Radowitz pled nies for services not rendered. The State also $62,846 on the claims. The allegedly fraudu- guilty to Health Care Claims Fraud. A State alleged that Ruta knew that Farro used a lent claims included claims for root canals, Grand Jury previously returned an indict- “runner” to solicit patients for Valley Total crowns, and fillings. All of the services that ment charging Radowitz with Health Care Health Center. In total, bills for approxi- were billed to the carriers were not rendered Claims Fraud, theft by deception, and falsify- 90 mately $12,499 were allegedly submitted to missions, she stole approximately $109,500 State v. Thomas J. Lagno Parkway Insurance Company for “runner” from Horizon Blue Cross Blue Shield. Wilson On June 19, 2006, the court sentenced solicited patients and Parkway paid approxi- is scheduled to be sentenced in early 2007. Thomas J. Lagno to three years probation mately $5,945 on these claims to Valley Total False Health Care Claims and ordered him to pay $5,893 in restitution Health Center. State v. Olivette Henderson, et al. and a $5,000 civil insurance fraud fine. On State v. Juan Carlos Fischberg, et al. April 6, 2006, Lagno pled guilty to an Accu- On November 27, 2006, the court sen- On October 11, 2006, a State Grand Jury sation charging him with Health Care Claims tenced Olivette Henderson to three years returned an indictment charging Juan Carlos Fraud. Lagno admitted that, between Febru- probation and ordered her to pay $3,000 in Fischberg and his wife, Gezel Villanueva, ary 29 and August 30, 2004, he fraudulently restitution. Henderson pled guilty to Health with money laundering, conspiracy, Health caused claims for prescription drugs and Care Claims Fraud and theft of identity. A Care Claims Fraud, theft by deception, falsi- medical treatment from physicians and other State Grand Jury previously returned an in- fying medical records, and false swearing. Ac- medical service providers to be sent to a dictment charging Henderson with Health cording to the indictment, between January former employer for payment. The former Care Claims Fraud and attempted theft by 1, 1998 and August 22, 2003, Fischberg, a employer was Access Systems Integration deception. According to the indictment, be- board certified doctor, owner and operator (ASI) which is headquartered in Hazlet. tween December 11, 2000 and March 12, of Hudson Rehabilitation and Medical Cen- Lagno had been an employee of ASI but had 2001, Henderson utilized the insurance iden- ter, allegedly defrauded 17 insurance compa- terminated his employment and was no tification information of Quivier Richardson nies by falsely stating that his patients were longer entitled to prescription drug coverage to obtain medical services. The medical ser- injured and suffered from medical condi- nor other medical benefits as a result of that vices included foot surgery and related medi- tions, primarily as a result of automobile ac- employment. The case was referred to OIFP cal bills for approximately $44,745. The bills cidents. The State alleges that Fischberg when the benefits coordinator for ASI began were submitted to the CIGNA Property and falsely claimed that it was necessary for him receiving medical claims pertaining to Lagno Casualty Insurance Company and CIGNA to perform electro-diagnostic testing in order even though he was no longer employed by paid approximately $7,550. to diagnose and treat these medical condi- the company. tions and bill auto insurance companies. The On October 13, 2006, Quivier Richardson State also alleges that, between March 5, pled guilty to Health Care Claims Fraud. On 2003 and December 31, 2003, Fischberg and November 27, 2006, the court sentenced her his wife, Gezel Villanueva, conspired to to three years probation and ordered her to commit money laundering by transferring pay $3,000 in restitution. On March 9, 2006, over $500,000, which was derived from a State Grand Jury returned a separate indict- theft and health care claims fraud committed ment charging Richardson with conspiracy, against various auto insurance companies, to Health Care Claims Fraud, and theft by de- South America and to the Capital Trust ception for providing her health insurance Company of Delaware. It is further alleged identification card to Olivette Henderson. that the money was transferred to conceal State v. John Lundy the nature, location, source, ownership, or On November 2, 2006, a Camden County control of the money and to hide the fact Grand Jury returned an indictment charging that it was money allegedly obtained John Lundy with Health Care Claims Fraud through the submission of false insurance and attempted theft by deception. According claims. Fischberg and Villaneuva failed to to the indictment, between September 25, appear at their arraignment on November 1998 and May 1, 2002, Lundy allegedly 14, 2006. The court issued a bench warrant made false statements and created the false for their arrest. impression that he was a licensed physical State v. Evelyn Wilson therapist in New Jersey in order to submit State v. Carol Ann Benvenuto On November 14, 2006, Evelyn Wilson insurance claims, predominately automobile PIP insurance claims, to several automobile On June 30, 2006, the court sentenced pled guilty to an Accusation charging her Carol Ann Benvenuto to three months pro- insurance companies, including Liberty Mu- with theft by deception. Between August 20, bation and ordered her to pay a $5,000 civil 2001 and June 16, 2004, Wilson, a former tual Insurance Company, Allstate Insurance Company, First Trenton Indemnity Com- insurance fraud fine. On April 13, 2006, clinical social worker and marriage and fam- Benvenuto pled guilty to an Accusation pany, and State Farm Insurance Company. ily therapist, submitted insurance claims to charging her with theft by deception. Horizon Blue Cross Blue Shield for social The State further alleges that Lundy fraudulently billed approximately $300,000 for Benvenuto admitted that, between August 7, work, marriage counseling, and family thera- 2001 and September 10, 2002, she submit- physical therapy claims to the insurance pist services which were never rendered to ted phony health insurance claims to her patients or clients. Specifically, Wilson ad- companies and collected approximately $133,760. Lundy allegedly operated his ille- health insurance company. She admitted that mitted that she submitted claims for several she worked as a receptionist for a doctor’s hundred therapy sessions for which she ren- gal physical therapy business, known as Travel Fitness, in Blackwood. office. She further admitted that she submit- dered no service to any patient or client. She ted insurance claim forms to Horizon Blue admitted that as a result of these phony sub- 91 OIFP Criminal Case Notes

Cross Blue Shield seeking reimbursement for Fraud and attempted theft by deception. State v. Richard Segal medical services which she neither received According to the indictment, between No- On May 8, 2006, the court admitted Rich- nor paid to her employer doctors. In total, vember 22, 2003 and February 18, 2005, ard Segal into the PTI Program. An Accusa- she fraudulently obtained approximately Mauricio claimed injury in an automobile tion was filed charging Segal with falsifying $1,935 for phony health insurance claims accident in which her disabled vehicle was records, theft by deception, and Insurance submitted to Horizon Blue Cross Blue Shield struck by another car. As a result of the colli- Fraud. The State alleged that Segal falsified a to which she was not entitled. sion, Mauricio allegedly sought medical treat- disability insurance claim form to indicate State v. Reginald Smithson ment for her purported injuries. First Trenton that he was fully disabled, as opposed to par- Indemnity Company was allegedly billed ap- tially disabled. Segal’s treating physician had On May 8, 2006, Reginald Smithson pled proximately $3,015 in connection with guilty to theft by deception. On June 19, allegedly determined that he was only par- Mauricio’s x-rays and approximately 23 visits tially disabled. 2006, the court sentenced him to four years to her chiropractor. The insurance company probation and ordered him to pay $1,550 in suspected fraud, denied the claim, and re- State v. Jonathan Siegel restitution to State Farm Insurance Com- ferred the matter to OIFP for investigation. On October 11, 2006, Jonathan Siegel pled pany. An Essex County Grand Jury previ- State v. Henry Robitaille, et al guilty to attempted theft by deception. He is ously returned an indictment charging scheduled to be sentenced in early 2007. On Smithson with theft by deception, Insurance On April 7, 2006, the court admitted March 6, 2006, a Monmouth County Grand Fraud, and forgery. According to the indict- Henry Robitaille into the PTI Program after Jury returned an indictment charging Siegel ment, Smithson allegedly submitted a phony Robitaille pled guilty on January 5, 2006, to with attempted theft by deception and utter- receipt to State Farm showing he paid a hos- an Accusation charging him with Health Care ing a forged document. According to the in- pital $1,001 for medical treatment related to Claims Fraud. Robitaille allegedly appeared dictment, between January 26, 1998 and Sep- injuries sustained in an automobile accident. at a medical treatment center seeking medi- tember 7, 2001, Siegel committed disability The State alleged that Smithson altered the cal treatment for Geraldine McKinney insurance fraud by wrongfully accepting dis- receipt and that the hospital treated him for through fraud. Robitaille and McKinney mis- ability benefits from the Unum Life Insurance an unrelated illness. represented insurance information to person- Company of North America. The State al- State v. Harry Slough nel at the medical treatment center by claim- leged that Siegel, who was at one time a li- ing that McKinney was Robitaille’s wife. The censed podiatrist in the State of New Jersey, On July 14, 2006, the court sentenced State alleged that Henry Robitaille and Harry Slough to two years probation and or- worked for a large New Jersey and a New Geraldine McKinney were not married and York law firm, but concealed the fact that he dered him to pay $5,757 in restitution to the that the insurance coverage of Robitaille’s wife State Health Benefits Plan. On May 24, was working and the amount of money he was improperly utilized to treat Geraldine was paid as an employee of the law firms, in 2006, Slough pled guilty to an Accusation McKinney who fraudulently pretended to be charging him with theft by deception. Slough order to collect greater disability benefits his wife. Charges against McKinney, who is from Unum Life Insurance Company. Siegel admitted that he wrongfully utilized the pre- currently in Ireland, are pending. scription insurance card coverage of his had filed a disability claim with Unum alleg- former wife to obtain prescription medi- Fraudulent Disability Claims ing that he was injured and unable to work as cines. Slough and his former wife, a Depart- State v. John Rhody a podiatrist, even though he was allegedly working and collecting a salary as an employee ment of Corrections sergeant, divorced on On May 19, 2006, the court sentenced May 1, 1997. Nonetheless, Slough admitted of the two law firms. John Rhody to three years probation. Rhody State v. Michelle Cannin that he obtained the prescription drug insur- pled guilty to falsification of records. A ance card belonging to his former wife and State Grand Jury previously returned an in- On April 28, 2006, the court sentenced utilized same to obtain prescription medi- dictment charging Rhody with theft by de- Michelle Cannin to three years probation and cines even though he was no longer a depen- ception, falsifying or tampering with records, ordered her to pay $3,089 in restitution. dent spouse entitled to her prescription in- and contempt of court. According to the in- Cannin pled guilty on March 6, 2006, to theft surance benefit coverage. In total, two insur- dictment, between May 31, 2001 and July by deception. A State Grand Jury previously ance companies, Aetna and Horizon Blue 31, 2002, Rhody allegedly wrongfully col- returned an indictment charging Cannin with Cross Blue Shield, paid a total of approxi- lected disability insurance benefits from the Insurance Fraud, theft by deception, forgery, mately $5,756 for health insurance and pre- Standard Insurance Company by submitting a and unsworn falsification. According to the scription drug benefits to which Slough was false disability claim. The State alleged that indictment, Cannin allegedly submitted not entitled. Rhody was actually working by buying and fraudulent insurance disability claim forms to State v. Florentina Mauricio selling classic post cards on eBay and other the New Jersey Department of Labor. The On October 17, 2006, Florentina locations while he was allegedly disabled and State alleged those forms falsely indicated that Mauricio pled guilty to Health Care Claims collecting disability insurance. The State also a physician had certified that Cannin was un- Fraud. On November 17, 2006, the court alleged that by submitting false records about able to work, was disabled, and, therefore, sentenced her to two years probation and or- his disability, occupation, and income, Rhody entitled to collect disability insurance pay- dered her to pay a $5,000 civil insurance was in contempt of court in connection ments, when, in fact, Cannin had forged fraud fine. On June 27, 2006, a Morris with a divorce action filed in Monmouth records in the name of the physician to sup- County Grand Jury returned an indictment County Superior Court. Rhody was formerly port her fraudulent disability claim. In total, charging Mauricio with Health Care Claims employed as an attorney by the Ocean- Cannin allegedly stole approximately $3,000 Monmouth Counties Legal Services Office. in disability claim benefits. 92 State v. Dennis Massimo Health Insurance Underwriting/ State v. Direct Home, Inc. On November 3, 2006, the court sen- Application Fraud On April 13, 2006, Direct Home, Inc., tenced Dennis Massimo to three years pro- pled guilty to theft by failure to make re- bation and ordered him to pay $6,700 in quired disposition of property received. On restitution. On September 14, 2006, June 30, 2006, the court sentenced Direct Massimo pled guilty to an Accusation charg- Home, Inc., to pay $2,308 in restitution and ing him with theft by deception. Massimo, pay a $1,000 criminal fine. On January 26, who was formerly employed by the New 2006, a Somerset County Grand Jury re- Jersey Department of Banking and Insur- turned an indictment charging Direct Home, ance (DOBI), admitted that, between June Inc., a housewares distributor, with theft by 21, 2003 and October 10, 2003, he wrong- deception. According to the indictment, be- fully collected temporary disability benefits tween April 14, 2001 and May 8, 2001, Di- while absent from his employment with rect Home, Inc., wrongfully accepted ap- DOBI. Massimo admitted that while he was proximately $2,500 in health insurance premi- receiving temporary disability benefits from ums from an individual for the employer- the State as a result of his absence from his sponsored group health insurance plan main- position with DOBI based on a medical dis- tained by Direct Home, Inc. The State alleged ability, he worked as a general contractor that Aetna Insurance Company provided the employed by an auto group. As a general insurance coverage for Direct Home, Inc.’s contractor, Massimo admitted receipt of employees but was never forwarded the pre- approximately $123,704 in income from the miums paid to Direct Home, Inc., by the pur- auto group while he was collecting $432 per ported insured who later learned that his week in temporary disability benefits from health insurance had been cancelled. the State. State v. John K. Hoover State v. Barbara Jean Potts On August 21, 2006, a State Grand Jury On December 22, 2006, the court sentenced returned an indictment charging John K. Barbara Jean Potts to three years probation and Hoover with Health Care Claims Fraud and ordered her to pay $3,169 in restitution and a theft by deception. According to the indict- $100 criminal fine. On November 9, 2006, ment, Hoover, who was employed by Salem Potts pled guilty to an Accusation charging her County as a Sheriff ’s Officer, allegedly falsi- with theft by deception. Potts admitted that, fied employer sponsored health insurance between April 19 and June 19, 2005, she records concerning his marital and family sta- wrongfully collected workers’ compensation tus. The State alleges that Hoover falsified a temporary disability benefits. Potts allegedly health insurance benefits form reflecting that collected temporary disability benefits from her he was separated but still married to his wife employer due to a work-related injury while and that his stepdaughter remained his de- concealing the fact that she was employed else- pendent for employer-sponsored health in- where by another company. surance and related medical and prescription State v. John Ponticello drug benefits. The State further alleges that this information was false and that Hoover On December 6, 2006, John Ponticello was divorced and did not have dependents. pled guilty to an Accusation charging him The State also alleges that by falsifying the with theft by deception. Ponticello admit- health insurance benefits forms and related ted that, between August 22, 2003 and records, Hoover wrongfully obtained in ex- November 7, 2005, he submitted false dis- cess of $17,641 in health care claims, pre- ability claims to the JMIC Life Insurance scription drug benefits, and insurance premi- Company claiming that he was disabled so ums paid by Salem County. that JMIC Life would pay $425 per month to the Ford Motor Company on his State v. Bernard Gelman (Ponticello’s) behalf in repayment of an au- On March 10, 2006, the court sentenced tomobile loan Ponticello incurred. The Bernard Gelman to three years probation, State alleged that, over a period of ap- and ordered him to pay $80,088 in restitu- proximately 17 months, Ponticello submit- tion and a $5,000 civil insurance fraud fine. ted false disability claims with fraudulent Gelman pled guilty to an Accusation charg- doctors’ signatures to JMIC Life in order ing him with theft by deception. Gelman ad- for JMIC Life to pay $10,563 to the Ford mitted that he wrongfully caused the Direc- Motor Company for his auto loan. He is tor of Risk and Insurance Management at his scheduled to be sentenced in 2007. place of employment located in Gloucester 93 OIFP Criminal Case Notes

City, to change the date that his son, Kevin she admitted that medical claims were sub- companies, including Empire Indemnity In- Gelman, an attorney, left employment with mitted to Oxford for medical treatments for surance Company, Individual Assurance the company which was a provider of ad- Gutierrez and Jon Magnes even though they Company, Protective Life Insurance Com- ministrative services. At the time of the al- were not entitled to the medical coverage. pany, AIG Insurance Company, Hartford Life leged fraud, Bernard Gelman was a senior The State alleged that the medical claims to- & Accident Insurance Company, USAA Life executive with his employer’s parent corpo- taled approximately $81,000. She will be Insurance Company, Minnesota Life Insur- ration. Gelman’s son, Kevin, allegedly ended sentenced in 2007. ance Company, Allstate Insurance Company, his employment with the company on April Life Insurance Fraud and Conseco Insurance Company. Maschuci 24, 1998, to start his own business. Shortly will be sentenced in 2007. State v. Atul K. Agarwala after leaving the company, Kevin Gelman State v. Kenneth Wilson was allegedly debilitated by illness and inju- On October 13, 2006, the court admitted ries caused by an accident. The State alleged Atul K. Agarwala, M.D., into the PTI Pro- On September 7, 2006, the court sen- that Bernard Gelman then intentionally in- gram and ordered him to pay a $30,000 civil tenced Kenneth Wilson to five years in state prison following his guilty plea to Insurance structed the company’s employees to alter insurance fraud fine. On June 28, 2006, the the date of his son’s resignation from the State charged Agarwala by way of an Accu- Fraud. Wilson admitted that, between June company so that he could obtain disability sation with falsifying or tampering with 3, 2004 and October 30, 2004, he issued four worthless checks to Transamerica Occi- insurance coverage under a new policy that records. According to the Accusation, be- went into effect after his son’s departure. tween September 4, 2001 and October 4, dental Life Insurance Company in connec- Approximately $80,087 was allegedly ob- 2001, Agarwala, together with a licensed in- tion with premium payments for his term life insurance policy which would have benefit- tained from Prudential Insurance Company surance agent, Aziz Chaundhry, allegedly at- as a result of Bernard Gelman’s fraud. tempted to falsify an insurance application in ted his fiancé. The four worthless checks al- order to obtain $1 million worth of life in- legedly totaled $10,390 and were drawn on State v. Joseph Venziano Botree Investments, LLC; Web-Loan; Ogle, surance on the life of Agarwala’s brother, On November 21, 2006, a Cape May Mukul Agarwala. The State alleged that the Liles & Upshaw, LLP; and Metabolex, Inc. County Grand Jury returned an indictment life insurance application was false because The State alleged that Wilson also attempted charging Joseph Venziano with Health Care to obtain a $6,888 loan from the insurance Agarwala did not disclose that Mukul Claims Fraud, theft by deception, and falsify- Agarwala had been killed in the attack on policy, but that loan was denied by ing or tampering with records. According to the World Trade Center. Once Equitable Transamerica. At the time of sentencing, the indictment, between October 18, 2002 Wilson was incarcerated in South Woods Life Insurance Company determined that and December 30, 2003, Venziano allegedly Mukul Agarwala had died in the attack on State Prison for unrelated charges filed by falsely represented that he remained married the World Trade Center, the case was re- the Burlington County Prosecutor’s Office. to his former wife so that she would be eli- ferred to OIFP. Aziz Chaundhry previously State v. Guy Cardinale gible as a dependent spouse for health insur- entered into a consent agreement to pay a ance benefits. The State alleges that health On November 29, 2006, Guy Cardinale civil insurance fraud fine in the amount of insurance benefits were provided through entered a guilty plea to an Accusation charg- $5,000 for his alleged role in attempting to Venziano’s employer by the Aetna Life Insur- ing him with issuing worthless checks. He falsify the application. ance Company under a policy which benefits admitted that, between July 25, 2006 and ended if the marriage ended. The State fur- State v. Mary Maschuci August 28, 2006, he issued a worthless check in the amount of $66,488 to Transamerica in ther alleges that since Superior Court records On June 19, 2006, Mary Maschuci pled indicate that Joseph Venziano was divorced guilty to an Accusation charging her with In- connection with the purchase of a life insur- on February 20, 1998, his former wife was surance Fraud, theft by deception, attempted ance policy. The check was dishonored by the bank. Cardinale is scheduled to be sen- no longer eligible for dependent spouse theft by deception, and uttering a forged health insurance benefits under that policy. document. Maschuci admitted that, between tenced in 2007. State v. Carol Magnes June 9, 2003 and April 20, 2005, she submit- Cardinale also pled guilty on November ted false life insurance claims to a variety of 29, 2006, to theft by deception pursuant to On December 19, 2006, Carol Magnes insurance companies. The claims were alleg- an unrelated State Grand Jury indictment re- pled guilty to an Accusation charging her edly false in that Maschuci had applied for life turned on July 28 2006. According to the in- with theft by deception. Magnes admitted insurance benefits on her own life, and, pos- dictment, between July and December 2002, that, between July 28, 2003 and November ing as her daughter, Maschuci then contacted Cardinale, who was employed as an agent for 28, 2005, she stole health insurance claim the insurance companies indicating that Mary the Canada Life Assurance Company, alleg- money from Oxford Health Plans by falsely Maschuci had died. Maschuci then allegedly edly submitted life insurance policy applica- enrolling Maria Gutierrez and Jon Magnes as submitted false death certificates to the insur- tions and supporting records to create the if they were employees of her husband’s ance companies and collected or attempted to impression that customers had purchased (Dr. Jeffrey Magnes) medical office when, in collect life insurance claim money. various life insurance policies when, in fact, fact, they were not. She admitted that by en- they had not purchased such policies. The rolling them as employees, she was able to In total, Maschuci allegedly attempted to collect approximately $1,083,155 in life in- State alleged that Cardinale submitted the obtain lower cost small employer group fraudulent documents to the Canada Life As- surance claim money and actually collected health insurance for Gutierrez and Jon surance Company in order to collect more Magnes even though they were not employ- $738,409. The State alleged that false life insurance claims were sent to nine insurance than $346,025 in up-front commissions for ees of the medical practice. Furthermore, four fictitious sales of insurance policies. 94 Drug Diversion year probationary sentence and ordered him State v. Rita Farmer to pay $11,220 in restitution. McGuigan was On February 6, 2006, the court admitted previously arrested by OIFP investigators Rita Farmer into the PTI Program condi- and charged with Health Care Claims Fraud, tioned upon her performing 50 hours of theft by deception, obtaining controlled dan- community service and paying a $2,500 civil gerous substances by fraud, and forgery. The insurance fraud fine. Farmer pled guilty to an State alleged that McGuigan obtained Accusation charging her with forgery. Farmer fraudulent prescriptions for OxyContin, a allegedly submitted phony flooring company controlled dangerous substance used prima- receipts to Hanover Insurance Company to rily for treating chronic pain. The prescrip- support her homeowners insurance claim of tions were allegedly filled at a local pharmacy water damage to her home. and issued to him in the name of his brother. Insurance claims were then sent to his State v. Michael Oteri brother’s prescription plan for payment. On March 10, 2006, the court sentenced State v. Annabelle Tulud Michael Oteri to four years probation. On January 23, 2006, Oteri pled guilty to forg- On June 7, 2006, the court sentenced ery. A Camden County Grand Jury previously Annabelle Tulud to four years probation and returned an indictment charging Oteri with ordered her to pay $14,129 in restitution. On forgery by uttering. According to the indict- April 11, 2006, Tulud pled guilty to an Accusa- ment, Oteri allegedly provided a phony boat State v. Dawn M. Nehring tion charging her with obtaining controlled dealership sales receipt to support his claim dangerous substance by fraud. Tulud, a regis- that certain items were stolen from his On July 13, 2006, a Burlington County tered nurse who previously surrendered her home, including fishing rods and other prop- Grand Jury returned an indictment charging nursing license, admitted that, between Octo- erty related to boating. Dawn M. Nehring with theft by deception ber 29, 2003 and April 1, 2005, she obtained and obtaining controlled dangerous sub- prescription medication by submitting fraudu- State v. Joseph Connors stances. According to the indictment, be- lent prescriptions. She admitted that she ob- On October 25, 2006, the court admitted tween January 17, 2001 and October 16, tained Actiq Fentanyl by submitting phony pre- Joseph Connors into the PTI Program condi- 2003, Nehring allegedly used the prescription scriptions to a pharmacy located in Livingston. tioned upon him paying a $5,000 civil insur- drug insurance benefits of her grandmother, She admitted that she had previously stolen ance fraud fine. On August 24, 2006, mother, and brother to illegally obtain nar- blank prescription forms from her physician, Connors pled guilty to an Accusation charg- cotic drugs. The State alleged that the pre- filled them out as if her doctor had prescribed ing him with falsifying records. Connors al- scriptions were filled at numerous pharma- the medication, and illegally obtained the nar- legedly submitted a false receipt which had cies and that Nehring wrongfully utilized the cotic prescription drug. The State alleged that been changed from $683.22 to $1,683.22. prescription drug benefit cards and related approximately $14,129 in prescription drugs The State alleged that the receipt was pur- information to obtain the drugs. Several pre- were obtained by fraud, and that MEDCO In- portedly issued by a residential services com- scription drug insurance plans and labor surance Company was fraudulently billed for pany which had repaired a home intercom union prescription drug plans were allegedly these prescription claims. and doorbell system at Connors’ home. The victimized, to include Independence Blue intercom/doorbell system had allegedly been Cross Blue Shield, Aetna Insurance Company, PROPERTY AND damaged by lightening, and Connors allegedly and the Carpenters Pension and Annuity CASUALTY FRAUD added $1,000 to the receipt which was then Fund of Philadelphia. The State alleged that False Homeowners Insurance Claims submitted to Countryway Insurance Com- approximately $61,052 in phony claims for pany for reimbursement on a homeowners prescription drugs were submitted as a result State v. Richard Farber insurance claim. of Nehring’s conduct and approximately On January 13, 2006, the court sentenced $48,023 was paid by the insurance carriers or State v. Steven Budge, et al. Richard Farber to four years in state prison other prescription drug plans. On July 21, On June 6, 2006, the court admitted and ordered him to pay $2,069 in restitution 2006, Nehring was arrested by OIFP investi- Steven Budge, John Budge, and Frank Land and a $2,500 civil insurance fraud fine. gators. Her case is pending trial. into the PTI Program and ordered each of Farber pled guilty to an Accusation charging them to pay a $500 criminal fine. A State State v. Gerald McGuigan him with theft by deception. Farber admit- Grand Jury returned an indictment charging ted that he submitted a false homeowners On March 8, 2006, Gerald McGuigan pled Steven Budge, a Public Insurance Claims Ad- insurance claim. Farber allegedly told Phila- guilty to an Accusation charging him with juster, his brother John Budge, and their delphia Contributionship Insurance Company theft by deception. McGuigan admitted that uncle Frank Land with attempted theft by that a burglar stole his plasma television, he submitted 82 phony prescription drug deception. According to the indictment, a digital camera, camcorder, notebook com- claims to Caremark Insurance Company and house owned by Frank Land was allegedly puter, and scanner, and supported his claim Medco Health Solutions and that $11,220 damaged as a result of winds that caused a with receipts showing purchases of the items was paid for the prescriptions. On April 28, large tree limb to fall on the roof. The State from an appliance store, but Farber had re- 2006, the court sentenced McGuigan to 90 further alleged that Steven Budge, John turned the items to the store for a refund. days in county jail as a condition of a three- Budge, and Frank Land inflicted further 95 OIFP Criminal Case Notes - Insurance Fraud

damage to the roof in order to inflate the He had previously paid State Farm Insurance tion was filed charging Rogoff with Insur- homeowners insurance claim to Liberty Mu- Company $3,830 in restitution. Eifler pled ance Fraud. According to the Accusation, tual Insurance Company. The State also al- guilty to Insurance Fraud and forgery. A Rogoff allegedly submitted a phony lost/ leged that Steven Budge submitted an ap- State Grand Jury had returned an indictment theft claim to State Farm Insurance Com- praisal to repair the roof to Liberty Mutual charging Eifler with Insurance Fraud, at- pany. The State alleges that Rogoff submit- which was allegedly inflated by approxi- tempted theft by deception, and forgery. Ac- ted a phony receipt for a diamond engage- mately $60,000. Liberty Mutual, suspecting cording to the indictment, in November ment ring in support of his claim that the fraud, denied the claim and referred the case 2003, Eifler allegedly submitted a claim for ring had been stolen, when, in fact, he had to OIFP for further investigation. approximately $6,017 to State Farm Insur- returned the ring to the jeweler and ex- State v. Jill Ravitz ance Company. Eifler alleged that someone changed it for a larger ring. stole certain plumbing tools from a shed on State v. Samuel Siligato On or about October 13, 2006, Jill Ravitz his property. State Farm settled Eifler’s claim was dismissed from the Bergen County PTI for approximately $3,830. In February 2004, State v. Gary Dixon Program for failure to remain law abiding in Eifler allegedly submitted additional claim State v. Francisco Diaz that she was charged in another, unrelated information to State Farm seeking an addi- State v. Michael Howell case. The court had admitted Ravitz into the tional $6,000. In support of the second PTI Program for a period of one year fol- claim, Eifler allegedly submitted false re- Following an 11-week jury trial, Samuel lowing her guilty plea to an Accusation ceipts reflecting the purchase of some of the Siligato was found guilty of attempted theft charging her with attempted theft by decep- plumbing tools he sought reimbursement for by deception, conspiracy, and witness tam- tion. Ravitz allegedly submitted a from State Farm Insurance Company. pering. On September 7, 2006, the court sen- homeowners insurance claim falsely claiming tenced him to 11 years in state prison. that a $10,000 diamond ring was missing. State v. Soena Sahni A State Grand Jury previously returned an The State alleged that Ravitz submitted the On February 24, 2006, the court admitted indictment charging Siligato with theft by de- claim after she received an appraisal for the Soena Sahni into the PTI Program condi- ception, attempted theft by deception, and diamond ring which she falsely claimed she tioned upon her performing 75 hours of conspiracy. According to the indictment, purchased. The carrier denied the claim and community service. Sahni pled guilty to an Siligato allegedly conspired to submit false referred the matter to OIFP for investiga- Accusation charging her with Insurance insurance claims in connection with a sus- tion. She will be sentenced in 2007. Fraud. Between March 13, 2004 and August picious arson fire at a commercial building 31, 2004, Sahni allegedly submitted altered State v. Sharon Knecht he owned in Hammonton. First Trenton In- and fraudulent computer rental receipts to surance Company allegedly paid a $15,000 On December 13, 2006, a Monmouth the Hartford Insurance Company to support insurance claim for the building’s contents County Grand Jury returned an indictment her claim that rented computer equipment charging Sharon Knecht with Insurance and $165,000 for the building itself. The was allegedly stolen from her place of busi- State alleged that Siligato also fraudulently Fraud. According to the indictment, Knecht ness during a burglary. allegedly submitted an altered $1,800 art gal- submitted a $206,900 claim to Farmers lery estimate to State Farm Insurance Com- State v. David Guyton Mutual Insurance Company for the con- pany for a painting that was damaged from a On March 10, 2006, the court sentenced tents of the building. water leak in her home. The State alleged that David Guyton to three years probation and During the course of this investigation the art gallery estimate was actually $800. ordered him to pay a $2,500 civil insurance and prosecution, OIFP investigators arrested State v. Gilbert Noble fraud fine. On January 5, 2006, Guyton pled Gary Dixon and charged him with perjury. guilty to a State Grand Jury indictment Prior to the date Siligato’s trial was originally On December 11, 2006, Gilbert Noble charging him with attempted theft by decep- scheduled to begin, Siligato allegedly offered pled guilty to an Accusation charging him tion. According to the indictment, between Dixon’s testimony in his defense after Siligato with Insurance Fraud. Noble admitted that October 13, 1999 and August 15, 2001, allegedly threatened Dixon and his family to in June 2006, he submitted three altered re- Guyton allegedly falsified receipts in order to persuade Dixon to provide perjured testimony ceipts to AAA Mid-Atlantic Insurance inflate a property insurance claim. The State to exculpate him (Siligato). Siligato also of- Group in support of his homeowners claim alleged that Guyton submitted a fraudulent fered the testimony of Francisco Diaz. OIFP in connection with an alleged residential bur- $7,004 claim to the New Jersey Insurance investigators arrested Diaz and charged him glary. Allegedly, Noble’s insurance claim was Underwriting Association for the loss of with perjury. The State alleged that Siligato for approximately $20,748. AAA Mid-Atlan- four gas ranges and four refrigerators result- coerced Diaz for perjured testimony. An ar- tic, suspecting fraud, denied the claim and ing from a fire at an apartment building lo- rest warrant for terroristic threats was also referred the matter to OIFP for investiga- cated at 22 Goodwin Avenue in Newark. issued for Michael Howell. The State alleged tion. He will sentenced in 2007. Guyton allegedly falsified a number of that Howell threatened the son of a cooper- Fraudulent Stolen/Damaged records in support of the claim. ating witness who was then expected to tes- Property Claims State v. Alan Rogoff tify at Siligato’s trial. A State Grand Jury returned an additional indictment on August State v. James Eifler On July 25, 2006, the court admitted Alan 29, 2005, charging Siligato with witness On February 1, 2006, the court sentenced Rogoff into the PTI Program conditioned tampering based on the above conduct. James Eifler to one year probation and or- upon him performing 50 hours of commu- dered him to pay $780 in fines and penalties. nity service. On June 20, 2006, an Accusa- 96 State v. Nalin Parmar forgery. Greble, of Red Alert Security, LLC, State v. Scott Rosanio On December 21, 2006, an Accusation on two occasions, allegedly presented coun- On February 17, 2006, the court sen- was filed charging Nalin Parmar with Insur- terfeit Certificates of Insurance to two com- tenced Scott Rosanio to 18 months proba- ance Fraud. According to the Accusation, on panies with which he had contracted to sup- tion and ordered him to pay a $1,000 crimi- December 23, 2004, Parmar, who operates ply security alarm work. nal fine. The court previously admitted Sayreville Wine & Liquor, allegedly submit- State v. Art Gallagher Rosanio into the PTI Program conditioned ted an altered invoice to Great American In- On January 20, 2006, Art Gallagher failed upon him performing 50 hours of commu- surance Company in support of a property to appear at his sentencing. The court issued nity service. Rosanio was terminated from damage claim. The State alleged that, on De- a bench warrant for his arrest. Gallagher pre- the program and, on the same day, pled guilty cember 2, 2004, several shelves on which li- viously pled guilty to an Accusation charging to an Ocean County Grand Jury indictment quor was stored, collapsed. The State further him with forgery. Gallagher, the owner and charging him with forgery. According to the alleged that although the cost of replacing the operator of Tower Building Contractors, ad- indictment, Rosanio, a home repair contrac- shelves was $1,570, Parmar allegedly altered mitted providing a phony Atlantic Insurance tor doing business as Creative Construction, the invoice to read $7,570 and submitted the Services Certificate of Insurance to a con- allegedly forged a Certificate of Liability In- altered invoice to his insurance company. He tracting firm for which he was doing subcon- surance. The State alleged that the Certifi- is scheduled to be sentenced in 2007. tracting work. cate of Insurance purported that Mercer Phony Certificates of Insurance2 Mutual Insurance Company insured State v. Wilson Aguirre Rosanio’s contracting business for liability, State v. Michael Fernandez On June 30, 2006, the court admitted when, in fact, Rosanio had forged the Cer- On March 17, 2006, the court admitted Wilson Aguirre into the PTI Program. On tificate of Insurance. Michael Fernandez into the PTI Program April 25, 2006, a Middlesex County Grand State v. Dennis Carey conditioned upon him performing 75 hours Jury returned an indictment charging Aguirre of community service. Fernandez pled guilty with forgery. According to the indictment, On May 1, 2006, Dennis Carey failed to to an Accusation charging him with forgery. Aguirre allegedly submitted a phony Zurich appear at his arraignment. The court issued a Fernandez, the owner/operator of Michael’s Insurance Company Certificate of Insurance bench warrant for his arrest. On February Carpentry & Construction, allegedly provided to a business with whom Aguirre had con- 28, 2006, a Hudson County Grand Jury re- a phony York-Jersey Underwriters, Inc., Cer- tracted to do landscaping work. turned an indictment charging Carey with forgery by uttering. According to the indict- tificate of Insurance to a person at whose State v. Heriberto Quiroz home Fernandez was contracted to do work. ment, Carey allegedly faxed a phony Pre- On August 22, 2006, the court admitted server Insurance Company and New Jersey State v. Robert Belisonzi Heriberto Quiroz into the PTI Program. On Re-Insurance Company Certificate of Liabil- On January 5, 2006, the court admitted May 2, 2006, a Hudson County Grand Jury ity Insurance to a home improvement com- Robert Belisonzi into the PTI Program. An returned an indictment charging Quiroz with pany, which had allegedly hired Carey to do Accusation was previously filed charging forgery. According to the indictment, subcontracting work. Belisonzi with forgery. Belisonzi, the owner Quiroz, operator of Quiroz Trucking, Inc., State v. William Jenkins of the Mason Jar, a catering business, alleg- allegedly submitted a phony NorthGuard In- edly provided a phony Eastern Insurors, surance Company Certificate of Insurance to William Jenkins failed to appear at his ar- LLC, Certificate of Insurance to a business a construction company relative to work raignment on April 17, 2006. The court is- with which he had contracted to provide ca- Quiroz performed at a construction site. sued a bench warrant for his arrest. On tering services. March 9, 2006, a Burlington County Grand State v. Joseph Fleres Jury returned an indictment charging Jenkins State v. Dorothy McCausland Joseph Fleres failed to appear at his ar- with forgery. According to the indictment, On June 26, 2006, the court admitted raignment on January 23, 2006. The court Jenkins allegedly filed a phony Mercer Insur- Dorothy McCausland into the PTI Program. issued a bench warrant for his arrest. A ance Company Certificate of Liability Insur- On May 22, 2006, McCausland was charged Bergen County Grand Jury previously re- ance with the Township of Pemberton on by way of an Accusation with forgery. Ac- turned an indictment charging Fleres with behalf of a general contractor. cording to the Accusation, McCausland, in forgery. According to the indictment, Fleres, State v. Daliton Marcal her capacity as office manager of Complete the owner of Fleres Construction, allegedly Masonry, allegedly submitted a phony New provided a forged Scottsdale Insurance Com- On August 22, 2006, Daliton Marcal Jersey Manufacturers Insurance Company pany Certificate of Insurance to a business failed to appear at a court hearing. The judge Certificate of Insurance to a waterproofing for which Fleres was contracted to do con- issued a bench warrant for his arrest. On company. The State alleged that Complete struction work. May 2, 2006, a Hudson County Grand Jury Masonry was a subcontractor doing work for a waterproofing company. State v. Joseph Greble 2. Frequently, contractors and other businesses are required to present proof of insurance when seeking construction work. Too often, the Cer- On March 13, 2006, the court admitted tificates of Insurance offered as proof of insurance are phony, and the Joseph Greble into the PTI Program condi- contractors or other businesses do not have the proper insurance to pro- tioned upon him performing 50 hours of vide protection in the event of an insurable loss. community service. Greble pled guilty to 97 OIFP Criminal Case Notes

returned an indictment charging Marcal with State v. Fernando Vasquez guilty to an Accusation charging false forgery. According to the indictment, Marcal, On June 27, 2006, a Hudson County Grand records. According to the Accusation, Pres- who was doing business as First March Con- Jury returned an indictment charging tige Homes Development Corp., which is in struction, allegedly submitted a phony Cer- Fernando Vasquez with forgery. According to the business of residential home construc- tificate of Liability Insurance in connection the indictment, on September 16, 2004, tion, submitted 17 fraudulent Certificates of with construction work being done on Vasquez, the owner/operator of First Rate Liability Insurance to the Hartford Insurance Bergenline Avenue in Union City. The State Construction, allegedly provided a phony Company during the course of an audit that alleged that the Certificate of Insurance was Ohio Casualty Group Certificate of Insurance Hartford was conducting at Prestige Homes. purportedly issued by Fleet Insurance Ser- to a contracting firm that had hired First Rate State v. Patrick Loftus vices of Newark, and also purports that Construction to do subcontracting work. Travelers Indemnity insured Marcal and his On November 16, 2006, Patrick Loftus pled construction company for commercial gen- State v. Lance Lally guilty to an Accusation charging him with forg- eral liability and workers’ compensation in- On September 18, 2006, Lance Lally pled ery. Loftus, the owner/operator of Computer surance from November 5, 2004 to Novem- guilty to forgery. He is scheduled to be sen- Logix, admitted that he presented an altered ber 5, 2005. tenced early in 2007. On July 31, 2006, a Quincy Mutual Fire Insurance Certificate of Insurance to a department store in connection State v. Mario Ramos Monmouth County Grand Jury returned an indictment charging Lally with forgery. Ac- with a software consulting job contract. He is On June 21, 2006, the court admitted cording to the indictment, on or about No- scheduled to be sentenced in 2007. Mario Ramos into the PTI Program and or- vember 29, 2005, Lally, a contractor operat- State v. William Luciano dered him to pay $4,666 in restitution. On ing a company known as Lally Painting and On October 27, 2006, William Luciano pled May 3, 2006, a Mercer County Grand Jury Construction, issued a fictitious Certificate of returned an indictment charging Ramos with guilty to an Accusation charging him with forg- Liability Insurance indicating that he had ery. According to the Accusation, Luciano, the theft by failure to make required disposition workers’ compensation insurance when, in of property received and forgery. According owner and operator of T&L Custom Tile and fact, he did not, in order to obtain work from Marble, allegedly presented a forged Hartford to the indictment, between July 2, 2005 and a general contractor. The State further alleged July 26, 2005, Ramos, who operated Ramos Insurance Company Certificate of Liability In- that the Certificate of Liability Insurance surance to a construction company for which Heating Co., allegedly provided a phony in- falsely reflected that Lally’s company was insurance binder to an individual in connection he had contracted to do work. He is scheduled sured by Peerless Insurance Company and pos- to be sentenced in early 2007. with restoration work being done on a build- sessed the requisite liability insurance. ing located at 114 Centre Street in Trenton. State v. Tadeusz Dobrzanski The insurance binder was allegedly provided State v. Steven Roesch On December 6, 2006, an Ocean County to demonstrate that Ramos had the requisite On September 26, 2006, a Sussex County Grand Jury returned an indictment charging insurance before beginning work on the Grand Jury returned an indictment charging Tadeusz Dobrzanski with forgery. According building. The indictment also alleged that Steven Roesch with forgery. According to the to the indictment, on March 1, 2006, Ramos accepted $4,666 from the individual indictment, on October 27, 2005, Roesch, the Dobrzanski, the owner and operator of TJD as a down payment for the work to be per- owner and operator of Steven Roesch Carpen- Construction, allegedly presented a phony formed on the building, but did not perform try, presented a phony Quincy Mutual Fire In- Selective Insurance Company Certificate of any work and never returned the money. surance Company Certificate of Liability Insur- Liability Insurance to a condominium com- State v. William Van’t Veer ance to a person with whom he had contracted plex which had contracted with TJD Con- to build a deck. This case is pending trial. On April 6, 2006, the court admitted Wil- struction to do repair work. liam Van’t Veer into the PTI Program condi- State v. John Mullen State v. Bruce Buccolo, et al. tioned upon him performing 50 hours of On September 27, 2006, the court admit- On June 8, 2006, a Somerset County community service. A Somerset County ted John Mullen into the PTI Program con- Grand Jury returned an indictment charging Grand Jury previously returned an indictment ditioned upon him performing 25 hours of Bruce Buccolo, his wife, Lori Lapira, and the charging Van’t Veer with forgery. According community service. Mullen was charged with heavy equipment leasing company he owned, to the indictment, Van’t Veer, a construction forgery by way of an Accusation. According operated and controlled known as United contractor, allegedly submitted a phony Ohio to the Accusation, Mullen, who operated J. Leasing, Inc., with theft of services and Casualty Insurance Company Certificate of Mullen Roofing, LLC, allegedly provided forgery. According to the indictment, be- Insurance to obtain work at a bank. false Jeanne Frey Insurance Agency Certifi- tween June 12, 2001 and November 20, State v. Steven Day cates of Liability Insurance to three different 2001, Buccolo, Lapira, and United Leasing general contractors with which J. Mullen allegedly leased heavy construction equip- On August 4, 2006, the court admitted Roofing had contracted to do work. Steven Day into the PTI Program. On June 22, ment from an equipment rental company, in- 2006, Day pled guilty to an Accusation charg- State v. Prestige Homes curring unpaid charges due under the equip- ing him with forgery. Day, the operator of JPS Development Corporation ment lease of approximately $25,000. The Construction Company, allegedly submitted On December 22, 2006, the court sen- State further alleged that Buccolo presented two phony Ohio Casualty Group Certificates tenced Prestige Homes Development Corpo- a phony Certificate of Liability Insurance in of Insurance to a construction company which ration to pay $5,000 in criminal fines. On order to induce the company to rent the hired Day to do subcontracting work. October 11, 2006, the corporation pled heavy equipment to him. 98 State v. Mark Little was also charged with theft of identity. Ac- State v. Melita Bilali, et al. On December 11, 2006, the court admit- cording to the indictment, between October On November 1, 2006, a State Grand Jury ted Mark Little into the PTI Program. On 8, 2002 and April 16, 2003, Sharonda Ross, returned an indictment charging Melita November 1, 2006, Little was charged by who was employed as a Treasury Operations Bilali, Greicy Rodriguez, Wilson Ruiz, and way of an Accusation with forgery. According Associate for Prudential Insurance Company, Guillermo Rosario with theft by deception to the Accusation, Little allegedly submitted allegedly conspired with Ivery Ross and and conspiracy. Bilali was also charged with an altered State Farm flood insurance applica- Michelle Patterson to steal nearly $50,000 uttering a forged document. According to tion and a forged letter on State Farm letter- from Prudential. The State alleged that the indictment, between March 18, 2002 head to a bank when applying for a home Sharonda Ross diverted insurance company and May 1, 2002, Bilali, Ruiz, Rodriguez, loan, in support of his claim that he had suffi- checks to Ivery Ross and Michelle Patterson and Rosario allegedly stole claims money cient flood insurance to secure the loan. by using the identification codes of other from Prudential Insurance Company when Prudential employees to issue the checks. Bilali issued phony claims checks from the INSURANCE The State further alleged that a total of ap- Prudential computer system. The State al- PROFESSIONAL FRAUD proximately 18 checks were wrongfully di- leges that Bilali, who was employed at Pru- verted in this manner and the conspiracy net- Insurance Carrier Employee Fraud dential as a customer service representative ted the defendants approximately $49,889. in the Disability Management Service Divi- State v. Sharonda Ross, et al. Sharonda Ross previously pled guilty to sion fraudulently diverted five claims checks On September 25, 2006, Michelle theft by deception, and the court admitted totaling $13,634 to Ruiz, Rodriguez, and Patterson pled guilty to conspiracy. On No- her into the PTI Program conditioned upon Rosario. This case is pending trial. vember 3, 2006, the court sentenced her to her paying $22,259 in restitution to Pruden- State v. Lisa Fitzpatrick-Gordon, et al. tial Insurance Company. Ivery Ross also pled three years probation and ordered her to pay On October 30, 2006, a Monmouth $489 in restitution. A State Grand Jury had guilty to theft by deception and theft of identity. The court sentenced him to three County Grand Jury returned an indictment returned an indictment charging Sharonda charging Lisa Fitzpatrick-Gordon, Brady Ross, her husband Ivery Ross, and Ross’s sis- years probation and ordered him to pay $22,258 in restitution to Prudential Insur- Bell, and Robert Scatigna with conspiracy to ter-in-law, Michelle Patterson, with con- commit theft by deception and theft by de- spiracy and theft by deception. Ivery Ross ance Company.

Putting the Brakes on Unscrupulous Insurance Licensees by Lewis Korngut over $300,000. Rodger Strandskov, a licensed third degree theft by deception. Cardinale insurance broker from the Eastern Insurance admitted to bilking Canada Life Assurance OIFP continued to see a growing trend in Agency in Kendall Park, was sentenced in Company out of more than $364,000 in the area of insurance agent/producer fraud February 2006 to three years state prison for fraudulently obtained insurance sales com- during 2006. OIFP received numerous refer- stealing over half a million dollars from missions. Cardinale admitted that he forged rals alleging that certain insurance producers AMGRO Premium Finance Company. Stacy the names of several of his clients on certain had stolen insurance premium money from Bates, a Millville licensed insurance agent, was documents in order to have policies issued unsuspecting insureds, leaving many insureds sentenced in March 2006 to three years state and premiums electronically deducted from without insurance. The investigations have prison for stealing over $105,000 from ap- their bank accounts. Sentencing is scheduled shown that because of the accessibility to proximately 124 insurance customers seeking for March 2007. Cardinale faces up to five large amounts of premium money, some in- auto and homeowners insurance policies. years in state prison and the loss of his insur- surance producers/agents cannot avoid the Another licensed agent, Louis Polite of ance producer’s license. temptation of converting this premium Burlington Township, received five years pro- OIFP is committed to aggressively pursuing money for their own personal use. The State bation for stealing $57,657 from approxi- licensed agents who break the law and violate will continue to prosecute these cases, send- mately 50 victims and an additional $3,000 their duty to their clients. These criminals vic- ing a strong message to these agents/produc- from New Jersey PAIP. Mercedes Lastra, a li- timize individuals and businesses and under- ers that prosecution and jail time will be the censed bail bondsman, was sentenced in No- mine the sterling reputations of countless law result of such misconduct. vember 2006 to five years probation for steal- abiding agents and producers. During 2006, numerous producers were ing $52,000 from individuals who gave her convicted by OIFP for stealing premium money to procure bail bonds. As part of their money. Many of these convicted defendants sentences, all of the aforementioned licensed Lewis Korngut is a Supervising Deputy Attorney received jail time. Michael Chamberlain, a li- producers have forfeited their licenses and General in charge of OIFP’s Property and Casualty have been ordered to pay full restitution. Section. He previously served as a Mercer censed insurance broker formerly of Basking County Assistant Prosecutor where he tried capital Ridge, was sentenced in February 2006 to five In yet another producer scam, in Novem- cases, including State v. Timmendequas. years state prison. He admitted to swindling a ber 2006, Guy Cardinale, a licensed insur- 78-year-old man of his life savings totaling ance producer, pled guilty to second and 99 OIFP Criminal Case Notes

ception. According to the indictment, be- Insurance Sales Fraud ure to make required disposition of property tween June 25 and July 29, 2002, Gordon State v. Lisa Brown received. Strandskov, who was the president allegedly conspired with Bell and Scatigna to of Eastern Insurance Agency which operated steal approximately $21,393 from State On April 7, 2006, the court sentenced in Kendall Park, admitted that he committed Farm Insurance Company. The State alleges Lisa Brown to three years probation and or- theft in two different ways. dered her to pay $3,000 in restitution. On that Gordon, who was an employee of State Strandskov admitted that he did not remit February 6, 2006, Brown pled guilty to a Farm, fraudulently issued five claim checks premium finance money to insurance compa- Union County Grand Jury indictment charg- to Bell, Scatigna, and a person who was not nies to pay for insurance policies sold ing her with theft by deception. According identified in the indictment. This case is through his agency. The premium finance to the indictment, between November 12, pending trial. money was provided by AMGRO Premium 2001 and February 20, 2002, Brown, who Financing. Insurance premium financing oc- Insurance Premium Fraud was employed as a claims service representa- curs when an insurance customer, in this State v. Ana Carmona, et al. tive by Fleet Insurance Services in Cranford, case, commercial trucking companies, bor- stole insurance premium money from three On June 20, 2006, Ana Carmona pled rows money from a lender to purchase the insurance customers with the promise that guilty to Insurance Fraud. On September 8, required commercial trucking insurance. she could obtain auto insurance for them at a 2006, the court sentenced her to five years Strandskov admitted that, in some cases, he much lower rate. The State alleged that probation and ordered her to pay $617 in stole insurance premium finance money and Brown accepted approximately $3,600 in in- restitution to Clarendon Insurance Company used it for his own purposes. Additionally, surance premium money and issued fraudu- and a $3,000 civil insurance fraud fine. On Strandskov admitted that he did not return lent Chubb Insurance Company and First January 4, 2006, a State Grand Jury returned insurance premium finance money for certain Trenton Indemnity Company documents, in- an indictment charging Carmona with Insur- insurance policies that terminated earlier cluding policy binders. The State also alleged ance Fraud. According to the indictment, on than the anticipated end date of the insur- that Brown stole the premium money and left December 4, 2003, Carmona, a licensed real ance coverage for approximately 14 insur- the insurance customers without valid auto- estate agent, allegedly committed application ance customers. Strandskov admitted that he mobile insurance. Brown was neither licensed fraud by falsifying an automobile insurance stole approximately $474,289 from AMGRO nor authorized to sell insurance or accept pre- application and submitting it to Clarendon Premium Financing. National Insurance Company in order to save miums as a licensed insurance agent. State v. Michael Chamberlain automobile insurance premiums. State v. Joseph Caruso On February 3, 2006, the court sentenced The State alleged Carmona falsely stated On May 8, 2006, the court admitted Jo- Michael Chamberlain to five years in state in her automobile insurance application that seph Caruso into the PTI Program condi- prison and ordered him to pay $303,757 in there were no other licensed drivers resid- tioned upon him paying $5,000 in restitu- restitution, following his guilty plea to theft ing in her household and made other mis- tion. On April 3, 2006, Caruso pled guilty to by unlawful taking. A State Grand Jury pre- leading statements and/or omissions in her an Accusation charging him with theft by de- viously returned an indictment charging automobile policy application to Clarendon ception and forgery. Caruso allegedly sold in- Chamberlain with theft by unlawful taking, Insurance. The State also alleged that by surance policies and insurance-related invest- forgery, and misapplication of entrusted concealing the fact that other licensed driv- ment products and services between August property. According to the indictment, ers resided in her house, Carmona was able 9, 2001 and July 16, 2002, even though he Chamberlain, then a licensed securities dealer to deceive Clarendon Insurance Company did not have a valid license to sell insurance. selling investments for American Skandia, into charging her substantially less for auto- The State alleged that Caruso collected ap- which was later purchased by Prudential In- mobile insurance. proximately $97,000 in insurance sales com- surance Company, allegedly stole $300,000 missions during the relevant time period Unrelated to the investigation of Carmona, from a 78-year-old victim by forging docu- while employed as an insurance agent with a her insurance agent, Herberto Zayas, was ments related to three annuity accounts financial services firm in Point Pleasant. In charged by the Passaic County Prosecutor’s maintained by the American Skandia/Pru- New Jersey, insurance agents or insurance Office for the sale of fraudulent automobile dential Company. The Prudential Insurance producers are required to have a State-issued insurance identification cards. On May 17, Company reported the matter to OIFP for insurance producers license. 2006, a Passaic County Grand Jury returned further investigation. an indictment charging Zayas with theft by Department of Banking and Insurance State v. Louis Polite failure to make required disposition. Accord- (DOBI) Licensees ing to that indictment, Zayas accepted insur- On March 31, 2006, the court sentenced State v. Rodger Strandskov ance premium money from a corporation Louis Polite to five years probation, ordered which operated a car wash in Plainfield, in On February 17, 2006, the court sen- him to pay $3,277 in restitution to PAIP and order that general commercial liability and tenced Rodger Strandskov to three years in $57,461 to 50 victims, as well as ordering commercial property damage/loss insurance state prison and ordered him to pay him to forfeit his producer’s license. On Au- could be purchased, but failed to obtain the $305,658 in restitution to Lexington Insur- gust 25, 2006, the court suspended certain insurance and retained the insurance pre- ance Company and $305,190 in restitution to conditions of the sentence imposed on Po- mium money for his own use. The indict- the Insurance Company of the State of lite. Polite agreed to increase the amount of ment alleged that approximately $6,795 in Pennsylvania. Strandskov pled guilty to an payments he had been making in order to premium money was stolen by Zayas. Accusation charging him with theft by fail- restitute the insurance companies and others. 100 On January 27, 2006, Polite pled guilty to INSURANCE-RELATED THEFT/ of five years. On September 21, 2006, an Accusation charging him with theft by ATTEMPTED THEFT Lastra pled guilty to an Accusation charging failure to make required disposition of prop- her with theft by failure to make required erty received. Polite, a licensed insurance State v. E. Nkem Odinkemere disposition of property received. Lastra, a agent, admitted that, between January 1, On January 13, 2006, following a five-day bond agent licensed in the State of New Jer- 2003 and November 19, 2004, he accepted trial in Essex County before Judge John C. sey and an employee of a bail bond company insurance premiums from 24 insurance cus- Kennedy, the jury was unable to reach a ver- located in Perth Amboy, admitted that, be- tomers, most of whom were purchasing au- dict. On March 27, 2006, the indictment tween September 24, 2004 and January 26, tomobile insurance, and did not remit the against E. Nkem Odinkemere was dismissed. 2005, she accepted bail money which repre- insurance premiums to the insurance compa- A State Grand Jury previously returned an sented premium surety bonds from various per- nies to pay for the insurance coverage. He indictment charging Odinkemere with mis- sons. She admitted that she took the bail bond admitted that he stole the money and used it application of entrusted property. The State money and issued phony bonds by taking blank for his own purposes. alleged that on September 1, 2000, and bail bonds and completing them as if they had State v. Stacey Bates thereafter, Odinkemere, a licensed New Jer- been paid for and properly issued. In total, sey attorney, misapplied money received Lastra admitted that she stole approximately On March 17, 2006, the court sentenced from a client in connection with a real estate $52,930 in connection with phony bail bonds Stacey Bates to three years in state prison, transaction, and allegedly used the money for issued for 15 criminal defendants. ordered her to pay $105,553 in restitution, his own benefit. and permanently revoked her insurance MEDICAID FRAUD agent’s license. On January 30, 2006, Bates State v. Monserrat Rodriguez Provider Fraud pled guilty to an Accusation charging her On March 1, 2006, the court sentenced with theft by failure to make required dispo- Monserrat Rodriguez to one year probation. State v. William J. Adamshick sition. Bates, a licensed insurance agent and Rodriguez pled guilty to an Accusation On February 10, 2006, the court sen- the owner and operator of Stacey Bates Gen- charging her with issuing bad checks. tenced William J. Adamshick to three years eral Insurance Agency located at 319 North Rodriguez admitted that, between April 26, probation and ordered him to pay $25,000 in High Street in Millville, admitted that she ac- 2005 and May 14, 2005, she wrote approxi- restitution and $25,000 in civil penalties. It cepted insurance premiums from insurance mately 39 checks totaling $7,803. The checks also revoked his pharmacist’s license and customers, primarily for automobile insur- were drawn on a High Point Insurance Com- barred him from participating in the Medic- ance, and did not remit the insurance pre- pany bank account. Rodriguez knew the aid program for five years. Adamshick pled mium money to the appropriate insurance car- bank would not honor the checks. guilty to Health Care Claims Fraud. rier to obtain valid insurance for the insurance State v. Angel C. Fontaina customers. Instead, Bates admitted taking the A State Grand Jury previously returned an insurance premium money and spending it for On April 13, 2006, the court sentenced indictment charging Adamshick with Health her own purposes. OIFP’s investigation iden- Angel C. Fontaina to four years in state Care Claims Fraud and Medicaid fraud. Ac- tified approximately 104 insurance customers prison and ordered him to pay $4,000 in res- cording to the indictment, between May 15, whose premium money was stolen by Bates titution. On March 16, 2006, Fontaina pled 2000 and January 30, 2002, Adamshick, a totaling approximately $99,058. guilty to an Accusation charging him with licensed pharmacist, allegedly submitted theft by deception. Fontaina, who was incar- fraudulent claims to the Medicaid program State v. Julio Fonseca cerated in the Hudson County jail based on for a narcotic prescription drug known as On November 15, 2006, a State Grand his guilty plea to first degree armed robbery, Stadol. Adamshick allegedly billed the Med- Jury returned an indictment charging Julio admitted that he stole $4,600 in connection icaid program in excess of $20,000 for ap- Fonseca, a licensed insurance agent who op- with an annuity investment issued by the proximately 238 phony Stadol prescriptions erated an insurance agency located at 377 General Electric Capital Assurance Program. that were never dispensed to patients. Henry Street in Orange, with failure to make Fontaina admitted that he issued a check to State v. Delphine Moore, et al. required disposition and simulating a motor the General Electric Capital Assurance Pro- vehicle insurance identification card. Ac- gram to fund an annuity investment. The Delphine Moore, owner and operator of cording to the indictment, between March 7 check was drawn in the amount of $3,000. M and M Rest Home located in and December 9, 2003, Fonseca allegedly ac- Later, Fontaina made two withdrawals of Perrineville, Howard Beale, owner and op- cepted insurance premium money as payment $3,000 from the General Electric Capital As- erator of the Chelsea Rest Home located in for insurance coverage from customers of his surance annuity and used the cash for his own Long Branch, and Kathryn McGlynn, owner insurance agency but never turned the insur- purposes. General Electric Capital Assurance and operator of the Atlantic House, all lo- ance premium money over to the insurance later learned that Fontaina’s initial $3,000 cated in Monmouth County, were previ- companies and instead stole the money to check was worthless when it bounced. ously admitted into the Pre-Trial Interven- tion (PTI) Program. Moore’s admission into use it for his own purposes. The State also State v. Mercedes Lastra alleges that Fonseca issued simulated New PTI was conditioned upon her paying Jersey PAIP auto insurance cards on June 20 On November 14, 2006, the court sen- $19,200 in restitution and paying a $1,500 and December 9, 2003, to an insurance cus- tenced Mercedes Lastra to five years proba- civil penalty. Beale’s admission into PTI was tomer. The total amount of theft is alleged tion and ordered her to pay $52,930 restitu- conditioned upon him paying $4,800 in res- to be several thousand dollars. tion to a bail bond company. The court also titution and paying a $1,000 civil penalty. revoked her bond agent license for a period McGlynn’s admission into PTI was condi- 101 OIFP Criminal Case Notes

tioned upon her paying $15,000 in restitu- prison and ordered him to pay $235,984 in Care Center located in Monroe, violated the tion and paying a $1,000 civil fine. restitution. Barasch, a licensed pharmacist, Medicaid kickback statute by accepting Moore, Beale, and McGlynn allegedly re- also pled guilty to Health Care Claims Fraud. money in return for directing nursing home ceived kickbacks from the Belmar Home The court sentenced Barasch to four years in residents to use a specific pharmacy for ob- Town Pharmacy as an inducement to fill the state prison, suspended his Medicaid privi- taining drugs prescribed by their physicians. medical prescriptions of the residents living leges for five years, and suspended his Sigle was paid to direct nursing home resi- in their assisted living facilities at that phar- pharmacist’s license for one year. dents to utilize the Belmar Home Town macy. The prescriptions were allegedly billed State v. Edward Acquaye Pharmacy which was owned and operated by Stavitski. to the Medicaid program. The kickbacks al- On June 30, 2006, Edward Acquaye pled legedly took the form of cash and free of guilty to Medicaid fraud. On September 1, State v. Shirley Welch charge over-the-counter medications, which 2006, the court sentenced him to three years On October 16, 2006, Shirley Welch pled were also allegedly used by the residents of probation and ordered him to pay $1,500 in guilty to theft by deception. She is scheduled the nursing homes. restitution and a $1,000 civil fine. On Janu- to be sentenced in 2007. On February 14, On February 17, 2006, the court sen- ary 24, 2006, a Middlesex County Grand 2006, a Monmouth County Grand Jury re- tenced Jacob Cohen to pay standard fines Jury returned an indictment charging turned an indictment charging Welch with and penalties, which he did at the time of Acquaye with Medicaid fraud in connection Medicaid fraud in connection with the sentencing. Cohen pled guilty to Medicaid with the Michael Stavitski investigation. Ac- Michael Stavitski investigation. According to fraud in connection with this investigation. cording to the indictment, between Novem- the indictment, between January 1, 2000 and In addition, Michael Stavitski, former owner ber 20, 2001 and February 20, 2002, February 20, 2002, Welch, who was licensed and operator of the Belmar Home Town Acquaye, who did business as EDFAMAX, by the New Jersey Department of Health Pharmacy, was previously indicted by a State Inc., was the president and operator of the and Senior Services, and who was the former Grand Jury. He pled guilty to Health Care Lincoln Rest Home, which was licensed by administrator/vice-president of the Pineland Claims Fraud and was sentenced to seven the New Jersey Department of Health and Rest Home, allegedly accepted kickbacks in years in state prison and ordered to pay ap- Senior Services. It is alleged that Acquaye the form of cash from Michael Stavitski, proximately $1.1 million in restitution and accepted kickbacks in the form of cash from who owned, operated, and controlled the penalties. Also, as part of the investigation, Michael Stavitski, who owned, operated, Belmar Home Town Pharmacy. The cash Stephen Poggioli previously pled guilty to and controlled the Belmar Home Town Phar- kickbacks were allegedly paid to Welch so Medicaid fraud and he was sentenced to macy. In total, $4,800 was paid by Stavitski that she would direct residents of the three years probation. to Acquaye so that he would direct residents Pineland Rest Home to the Belmar Home State v. Azam Khan, et al. of the Lincoln Rest Home to the Belmar Town Pharmacy to have prescriptions filled. Home Town Pharmacy to have prescriptions Laws that govern the Medicaid program pro- On January 27, 2006, the court sentenced filled. The Medicaid program prohibits pay- hibit paying cash or offering anything of Azam Khan to three years in state prison. ing cash or offering anything of value to a value to a Medicaid provider in exchange for Khan pled guilty to an Accusation charging Medicaid provider in exchange for directing directing business to providers, such as phar- him with Health Care Claims Fraud. A State business to providers, such as pharmacies, so macies, so that the Medicaid program can be Grand Jury previously returned an indict- that the Medicaid program can be billed for billed for prescription or other claims. ment charging Shahid Khawaja, Milton prescription or other claims. Stavitski was Stavitski was previously prosecuted by the Barasch, and Axat Jani with Health Care previously prosecuted by the OIFP Medicaid OIFP Medicaid Fraud Control Unit and was Claims Fraud, theft by deception, and Med- Fraud Control Unit and was convicted and convicted and sentenced to serve seven years icaid Fraud. All four defendants allegedly sentenced to serve seven years in state in state prison. He was also ordered to pay participated in an illegal scheme to bill the prison. He was also ordered to pay $1.1 mil- $1.1 million in restitution and penalties and Medicaid program approximately $293,815 lion in restitution and penalties and relin- relinquished his Medicaid provider license for medications either never dispensed or quished his Medicaid provider license for a for a period of seven years. dispensed to persons using another person’s period of seven years. Medicaid recipient number. Some bills were State v. Dwayne Smith, et al. allegedly submitted to the Medicaid program State v. Edward Sigle On February 3, 2006, OIFP Medicaid for medications prescribed for Medicaid re- On July 25, 2006, Edward Sigle pled Fraud Control Unit investigators arrested cipients who had died years before. guilty to Medicaid fraud. On September 1, Dwayne Smith on an outstanding warrant. Jani previously pled guilty to Health Care 2006, the court sentenced him to three years He was transported to the Essex County Claims Fraud. The court sentenced Jani to probation and ordered him to pay $2,000 in Correctional Facility. A State Grand Jury four years in state prison and ordered him to restitution and a $1,000 civil fine. On Janu- previously returned an indictment charging pay a criminal fine of $10,000. Jani’s Medic- ary 24, 2006, a Middlesex County Grand Dwayne Smith and his corporation, Smith & aid program privileges were suspended for a Jury returned an indictment charging Sigle Williams Transportation, Inc., with Health period of five years and his medical license with Medicaid fraud in connection with the Care Claims Fraud and Medicaid fraud. Ac- was suspended for one year. Khawaja, the Michael Stavitski investigation. According to cording to the indictment, between March owner of S Brothers Pharmacy, previously the indictment, between March 1, 2001 and 21, 2003 and May 20, 2004, Smith, through pled guilty to money laundering. The court February 20, 2002, Sigle, who operated the Smith & Williams Transportation, Inc., alleg- sentenced Khawaja to five years in state Meadowview Rest Home/Country View edly fraudulently billed the Medicaid pro- 102 gram for transportation services in connection State v. Terry Gatto when, in fact, he had a prior criminal con- with medical treatments of Medicaid patients. On May 12, 2006, Terry Gatto pled guilty viction for distribution of drugs and had The Medicaid program provides transporta- to an Accusation charging her with theft by served prison time. tion to and from doctors’ offices, hospitals, and deception. Gatto admitted that, between State v. Mary Villone other medical providers. In total, the State al- November 4, 2002 and November 19, 2004, On July 28, 2006, the court sentenced leged that Smith falsely billed the Medicaid she used her prescription drug plan, Advance program approximately $12,600. Dwayne Mary Villone to three years probation, condi- PCS, to fill phony prescriptions for tioned upon her serving 90 days in the SLAP Smith and Smith & Williams Transportation OxyContin and Hydrocodone, both addic- are scheduled to go on trial in early 2007. program. She was also ordered to pay a tive narcotics. She admitted that the pre- $1,000 criminal fine. On May 19, 2006, State v. Jean Edward LaGuerre scriptions were false because either the doc- Villone pled guilty to Medicaid fraud. A On June 29, 2006, Jean Edward LaGuerre tors did not prescribe those medications or State Grand Jury previously returned an in- pled guilty to an Accusation charging him the patients did not actually exist. Some of dictment charging Villone with Health Care with forgery. He will be sentenced in 2007. the purported patients were Medicaid recipi- Claims Fraud and Medicaid fraud. According On March 10, 2006, OIFP Medicaid Fraud ents. Gatto admitted that a pharmacist filled to the indictment, Villone, the administrator Control Unit investigators arrested LaGuerre the phony prescriptions in exchange for a of PE Medical Transport, Inc., allegedly sub- and charged him with forgery. LaGuerre was share of the proceeds. The drugs were sold mitted false transportation claims to the allegedly posing as a licensed pharmacist and for $350, which Gatto admitted splitting Medicaid program between January 2002 was employed by a pharmacy that specialized with the pharmacist by paying her $175 for and February 2004. in providing medications to nursing home each bottle of medication illegally sold. Gatto admitted that she paid the pharmacist PE Medical Transport provided mobility residents. The State alleged that LaGuerre assistance vehicles and transportation assis- was not a licensed pharmacist in New Jersey between $1,400 and $1,500 for eight bottles of medications which were illegally sold. She tance to Medicaid patients who required and, therefore, could not legally dispense transportation to and from health care pro- prescription medicine. is scheduled to be sentenced in 2007. This investigation is continuing and more charges viders. Villone allegedly falsified prior autho- State v. Ojah Pharmacy, et al. are anticipated. rization requests, certificates of medical ne- cessity, and transportation trip certifica- On March 21, 2006, following a five- State v. Mark Szarszewski week jury trial, Ojah Pharmacy, Verona tions which Villone submitted to Medicaid Boodram, and Alpha Bangoura were con- On September 22, 2006, the court admit- in support of claims for transportation ser- victed of Health Care Claims Fraud and ted Mark Szarszewski into the PTI Program, vices not rendered and for patients who did Medicaid fraud. Upon conviction, bail for conditioned upon him paying $1,644 in resti- not require transportation. In total, Villone both individual defendants was revoked and tution and performing 60 hours of commu- submitted approximately 2,080 false claims they were remanded to the Essex County nity service. He was previously suspended by totaling $51,500 in billings to the Medicaid Jail. On June 6, 2006, the court sentenced the Board of Pharmacy. On the same date, program. Bangoura to six-and-a-half years in state Szarszewski was charged by way of an Accu- During the investigation, PE Medical prison. Boodram was sentenced to five years sation with Medicaid fraud. Szarszewski, Transport settled with the State by paying in state prison and ordered to pay $21,500 in formerly a licensed pharmacist, allegedly $204,000 in restitution and $204,000 in civil restitution. On June 23, 2006, the court or- wrongfully obtained Ambien, a prescription penalties. An additional $42,000 was forfeited dered Ojah Pharmacy to pay $21,500 in res- medicine, by falsely utilizing Medicaid ben- to the State. The Medicaid Fraud Section titution and $69,000 in fines and penalties. It eficiary information. “froze” PE Medical Transport’s bank accounts also ordered the corporation dissolved and State v. Cory Davis which totaled approximately $400,000. revoked its permit to operate as a pharmacy. On May 25, 2006, the court sentenced State v. Frances M. Colon-Torres A State Grand Jury previously returned Cory Davis to three years probation, condi- On November 13, 2006, Frances M. Co- an indictment against Ojah Pharmacy, its tioned upon him serving 30 days in county lon-Torres pled guilty to a six-count indict- manager Verona Boodram, and the pharmacy jail. The court suspended the jail sentence. ment. On December 18, 2006, the court sen- technician, Alpha Bangoura, charging them On the same date, Davis pled guilty to an tenced her to two years probation and or- with Health Care Claims Fraud and Medicaid Accusation charging him with Medicaid dered her to pay $18,000 in fines and restitu- fraud. According to the indictment, between fraud. Davis admitted that in the course of tion. She was also barred from working in June 1, 2002 and October 28, 2004, the de- applying to become a Medicaid provider, he the health care field for two years. On Sep- fendants billed the Medicaid program for concealed his prior criminal record. Specifi- tember 8, 2006, an Essex County Grand Jury prescriptions that were neither filled nor dis- cally, Davis stated that when submitting the returned an indictment charging Colon- pensed to Medicaid patients. The State fur- Medicaid provider application to the Divi- Torres with false government documents, ther alleged that certain Medicaid patients sion of Medical Assistance and Health Ser- theft by deception, and uttering a forged sold their legitimate prescriptions to the vices so that he could qualify to operate as a document. According to the indictment, be- pharmacy so that the pharmacy could sup- Medicaid provider, he responded in the nega- tween August 2004 and May 2005, Colon- port the fraudulent Medicaid bills. The State tive to the question inquiring whether or not Torres was allegedly employed by a nursing also alleged that the Medicaid program was Davis had ever been indicted, charged, con- home located in Orange, New Jersey, under billed approximately $57,000 for prescrip- victed of, or pled guilty or no contest to any false pretenses. The State alleged that Colon- tions that were not filled. federal or state crime or disorderly persons Torres was first employed as a Licensed Prac- offense in New Jersey or anywhere else, 103 OIFP Criminal Case Notes

tical Nurse (LPN), and then as a Registered surgical support stockings when the least ex- Nurse (RN). The State further alleged that the pensive stocking was provided to the Medic- licensing certificates she provided to the nurs- aid patients. Surgical stockings are prescribed ing home, demonstrating that she was an LPN for patients for circulatory and related medi- and then an RN, were both phony. Finally, the cal conditions. Surgical stockings may be State alleged that Colon-Torres stole approxi- billed in amounts ranging from $24 to $120. mately $37,518 in salary by presenting phony The State alleged that Munoz falsely billed the nursing licenses to the nursing home in order to Medicaid program approximately $29,840. gain employment when she was not qualified. State v. Abdelraow Ismaiel State v. Frederick Feit On December 18, 2006, Abdelraow On September 26, 2006, a State Grand Ismaiel was charged by way of an Accusa- Jury returned an indictment charging tion charging him with Medicaid fraud. Ac- Frederick Feit, a licensed medical doctor, cording to the Accusation, Ismaiel was the with Health Care Claims Fraud and theft by owner and operator of Careway Invalid deception. According to the indictment, be- Coach, a provider of transportation services tween January 1,1996 and December 31, to Medicaid patients to facilitate travel to 2004, Feit operated a medical practice medical appointments for treatments. Be- known as Modern Pain Therapy located at tween May 1, 2004 and January 31, 2005, 42 Center Street in Freehold. The State al- State v. Ademola T. Salami, et al. Ismaiel allegedly offered money as bribes to leged that Feit submitted false claims to a On November 8, 2006, a State Grand Jury several medical facility employees so that number of health insurers and government- returned an indictment charging Ademola T. those employees would recommend the utili- sponsored health care insurance plans in the Salami, a licensed pharmacist, and the phar- zation of Careway for patient transportation amount of $589,851. The State also alleged macy he owned and operated, Bethel Phar- and Careway could then bill the Medicaid that Feit billed for nerve block injections used macy, Inc., located at 301 Osborne Terrace in program for any transportation services pro- to alleviate pain when, in fact, he simply ad- Newark, with Health Care Claims Fraud and vided. Ismaiel will be sentenced in 2007. ministered less invasive intramuscular injec- Medicaid fraud. According to the indictment, Patient and Elder Abuse3 tions using narcotics such as Demerol or mor- between January 1 and April 10, 2004, State v. Donald Beckett phine, a practice sometimes referred to as Salami, through Bethel Pharmacy, allegedly “up-coding.” In addition to the Medicare Pro- submitted claims to the Medicaid program Following a three-day jury trial, on March gram, Aetna Insurance Company, Horizon for false prescriptions. The State alleged 30, 2006, Donald Beckett was acquitted of Blue Cross Blue Shield, and Empire Insurance that the prescriptions were false because at aggravated assault. A Sussex County Grand Company were allegedly falsely billed for least 12 prescriptions were forged and back- Jury previously returned an indictment charg- nerve blocks when patients merely received dated, and the remaining 80 were not pre- ing him with aggravated assault. According to less invasive and less expensive intramuscular scribed by the doctor whose purported sig- the indictment, on October 11, 2003, Becket, injections. It is also alleged that Feit submit- nature was, in fact, forged on the prescrip- who was employed at a SubAcute Rehabilita- ted false claims to Horizon Blue Cross Blue tion form. In total, the State alleged that tion Center as a Certified Nursing Assistant, Shield for medical services not rendered. Salami and Bethel Pharmacy billed the allegedly committed an assault on an elderly State v. Gayford Yaw Medicaid program approximately $16,851 resident of the Rehab Center. On November 2, 2006, Gayford Yaw pled based on phony prescriptions. State v. Sharmelanie L. Peppers guilty to an Accusation charging him with State v. Julio Anthony Munoz, et al. In cooperation with Delaware law enforce- unlawful taking. Yaw, who was employed as On October 19, 2006, TNT Medical Sup- ment, on January 30, 2006, OIFP Medicaid a pharmacy technician at Atlantic Health ply, Inc., pled guilty to Health Care Claims Fraud Control Unit investigators arrested Systems/Morristown Hospital and at Ojah Fraud. On the same date, Julio Anthony Sharmelanie L. Peppers, a/k/a Charmelanie L. Pharmacy located on Sussex Turnpike in Munoz was admitted into the PTI Program Peppers, a/k/a Larissa Moore, on a fugitive East Orange, admitted that, between Septem- conditioned upon him paying $67,728 in res- warrant based upon a Delaware complaint and ber 26, 2002 and June 9, 2004, he stole several titution and penalties. The court also de- warrant for Abuse, Mistreatment, or Neglect drugs from the Morristown Hospital pharma- barred him from participating in the Medic- of a Patient. The patient subsequently died. ceutical inventory, including Zithromax, aid program for a period of eight years. The Delaware requested OIFP’s assistance as Pep- Combivir, Lipitor, Zocor, Accupril, Diovan, corporation will be sentenced in early 2007. pers was then employed as a live-in assistant, Celebrex, Augmentin, Zoloft, Zyprexa, and A State Grand Jury previously returned an caring for an elderly patient in New Jersey. others. He also admitted that he sold the stolen indictment charging Munoz and TNT with Peppers also had numerous outstanding traffic drugs to various persons who owned or oper- Health Care Claims Fraud and Medicaid warrants in New Jersey. Peppers was processed ated pharmacies so that the drugs could be re- fraud. According to the indictment, Munoz, and transported to the Mercer County Correc- sold to customers of the pharmacies. In total, a Medicaid provider, owned, operated, and tional Facility where she was released into the Yaw admitted to stealing approximately controlled TNT. The State alleged that, be- custody of the Department of Corrections. $13,438 worth of drugs. He is scheduled to be tween January 2002 and August 2003, The New Castle County, Delaware, Police De- sentenced in 2007. Munoz and his corporation falsely billed the partment was notified of the arrest and will be Medicaid program for the most expensive extraditing Peppers to Delaware. 104 State v. Madeline Petit Grand Jury previously returned an indict- often employed in nursing homes to assist On September 28, 2006, Madeline Petit ment charging Smith with aggravated assault patients who are sometimes Medicaid benefi- pled guilty to an indictment charging her and aggravated criminal sexual contact. Ac- ciaries. Davis admitted that the forged letter with aggravated assault. On December 18, cording to the indictment, on July 1, 2004 falsely advised the Department of Health 2006, the court admitted her into the PTI and August 13, 2004, Smith allegedly as- and Senior Services that she had completed a Program. On February 22, 2006, a State saulted various residents of a nursing and re- period of criminal probation for theft from Grand Jury returned an indictment charging habilitation center located in Trenton. The Burlington County when, in fact, she had not Petit with assault upon an institutionalized State alleged that Smith committed an aggra- completed her probationary term and was elderly patient. According to the indictment, vated assault on four patients. The State also still on probation. on January 15, 2004, Petit, a Certified Nurs- alleged that Smith committed an aggravated State v. Helen Williamson sexual assault on one of those patients. The ing Assistant employed at a patient care and On October 25, 2006, an Ocean County rehabilitation center, allegedly committed an alleged victims were patients were between 73 and 87 years old. Grand Jury returned an indictment charging assault on an 80-year-old patient. Helen Williamson with neglect of the elderly State v. Shirley Earnest State v. Charlotte Moreland and theft from the person. According to the On April 13, 2006, Shirley Earnest was On August 23, 2006, a Mercer County indictment, between October 6 and 19, charged by way of Accusation with the Grand Jury returned an indictment charging 2004, Williamson allegedly wrongfully ne- crime of criminal restraint. She was admit- Charlotte Moreland with theft by unlawful glected to care for a patient at a convalescent ted into the PTI Program and surrendered taking. According to the indictment, be- center located in Manahawkin. The State al- her Certified Nursing Assistant (CNA) li- tween October 24 and 31, 2005, Moreland, leges that Williamson withheld pain medica- cense for a period of one year. According to a Certified Nursing Assistant employed as an tion from the patient. The State also alleges the Accusation, Earnest, a licensed CNA, al- aide for a 90-year-old resident of an assisted that Williamson stole a duragesic medication legedly falsely imprisoned an elderly resident living facility located in East Windsor Town- patch from the patient. A duragesic medica- of a nursing home. ship, allegedly used an ATM card without tion patch time releases pain medication to permission to steal approximately $1,840 patients requiring such therapy. Pain medica- State v. Eldora McCall from the resident’s bank account. OIFP in- tion patches are sometimes sought by persons On May 24, 2006, Eldora McCall pled vestigators arrested Moreland on October who abuse narcotic substances. The case is guilty to uttering a forged instrument and 18, 2006. The case is pending trial. pending trial. theft of a motor vehicle. She is scheduled to State v. Antoinette Davis be sentenced in early 2007. On February 22, 2006, a State Grand Jury returned an indict- On December 1, 2006, the court sen- ment charging McCall with uttering a forged tenced Antoinette Davis to one year proba- document, attempted theft by deception, tion. On September 18, 2006, Davis pled and theft by unlawful taking. According to guilty to an Accusation charging her with ut- the indictment, between March 31, 2004 and tering a forged document. Davis admitted July 16, 2005, McCall, who was also known that on or about August 18, 2005, she sub- as Eldora Collins, forged two checks drawn mitted a forged letter to the Department of on the account of an elderly nursing home pa- Health and Senior Services. The letter was tient in an effort to steal money belonging to part of an application package so that Davis the patient. Additionally, the indictment al- could obtain credentials as a Certified Nurs- leged that McCall stole the same patient’s ing Assistant. Certified Nursing Assistants are 2001 Buick LeSabre. The patient was a resident of a nursing home facility located in East Windsor Township, where McCall was employed as a Certified Nursing Assistant. State v. Russell P. Smith, III On May 30, 2006, Russell P. Smith, III, a Licensed Practical Nurse (LPN) in New Jer- sey, pled guilty to criminal sexual contact. On July 28, 2006, the court sentenced Smith to five years probation and ordered him to forfeit his LPN license. A Mercer County

3. Too frequently, Medicaid beneficiaries are subjected to neglect and abuse. The Office of the Insurance Fraud Prosecutor through its Elder Abuse and Ne- glect Unit in the Medicaid Fraud Section has begun an initiative to investigate and prosecute such allegations. 105 OIFP Criminal Case Notes

Protecting the Elderly Population by John Krayniak and William Hoyman

Calendar year 2006 marked the second full to be invaluable allies contributing to the ensures a defendant will not be in a job or year of operation for the Elder Abuse and success of the Elder Abuse and Neglect occupation that will allow ill advised access Neglect Unit within the Medicaid Fraud Unit. A similar relationship is being devel- to the institutionalized elderly. Forms have Section. Created in 2004, the mission of this oped with various offices within the Depart- been developed over the past year in order to specialized unit is the detection, investiga- ment of Human Services. streamline this process. In order to further tion, and prosecution of instances of alleged This past year, the Elder Abuse and Ne- cement the partnership between the Elder patient abuse and neglect that occur at any glect Unit also became a member of the Abuse and Neglect Unit and the counties, a Medicaid provider facility. A provider facility New Jersey State TRIAD Association. series of training programs addressing prob- is one that receives Medicaid dollars. The TRIAD is an organization devoted to ad- lems unique to the investigation and pros- victim of abuse or neglect at such a facility dressing the safety concerns of the senior ecution of abuse and neglect cases are also need not be a Medicaid recipient. community. The goal of TRIAD is to reduce under development. Within the State of New Jersey, there are incidents of crime against the elderly popu- While the crimes of aggravated assault over 370 long term care facilities (nursing lation by the development of a statewide upon the institutionalized elderly and elderly homes) where thousands of vulnerable elderly network of community based crime preven- neglect as defined in the code of criminal jus- citizens reside. Combined with the elderly and tion programs, advocacy, and training con- tice remain the primary tools of the Elder disabled populations of numerous assisted liv- ducted through a partnership of law en- Abuse and Neglect Unit, experience has ing facilities and board and care homes, as well forcement, senior citizens, and community shown that the segment of the population as those individuals who continue to reside at service organizations. The Elder Abuse and served by the Unit is no less immune to other home but are reliant on home health aides, the Neglect Unit will work to help advance the types of criminal behavior. In addition to the potential for substantial harm being visited mission of this organization and thereby in- aforesaid assault and neglect offenses, calen- upon the elderly and disabled segments of our crease public awareness of the risks faced by dar year 2006 also saw prosecutions of crimes population is ever present. the institutionalized elderly. for sex offenses, forgery, uttering forged in- In addition to the investigation and pros- The individual County Prosecutors’ Offices struments, criminal restraint, false imprison- ecution of cases, over the past two years, the continue to be active partners in the prosecu- ment, and various types of theft, including Elder Abuse and Neglect Unit has success- tion of crimes involving the elderly. In addi- motor vehicle theft, theft from the person, fully developed various sources of referrals tion to having concurrent jurisdiction with and theft by unlawful taking. for the reporting of cases of abuse and ne- the Elder Abuse and Neglect Unit over inci- An unintended but not unwelcome conse- glect. This outreach effort is ongoing. The dents occurring within Medicaid provider fa- quence of the operation of the Elder Abuse wisdom of establishing an abuse and neglect cilities, the County Prosecutors are also re- and Neglect Unit has been its role as a clearing unit with statewide prosecutorial authority sponsible for all other cases involving elderly house not only for regulatory agencies seeking has been confirmed by the enthusiastic re- and disabled victims. Federal regulations re- second opinions on difficult cases but also as an sponse from other interested regulatory agen- quire that dispositions in all cases involving office of last resort for family members of vic- cies that lack the authority to instigate crimi- offenses committed upon patients in Medicaid tims not satisfied with conclusions reached in nal prosecutions and have, in years past, re- provider facilities be reported to the Office unrelated investigations. When circumstances ferred their investigative findings to the of the Inspector General of the federal De- warrant, the Unit has not been hesitant to re- County Prosecutors’ Offices when criminal partment of Health and Human Services. In quest copies of all previous investigation re- prosecution was believed to be warranted. order to assist the counties with this responsi- ports in order to review them with a fresh per- Both the Licensing and Certification Unit bility, the Elder Abuse and Neglect Unit spective. While a previous conclusion is rarely and the Assessment and Survey Unit within monitors all county patient abuse and neglect challenged, a second review provides a con- the Department of Health and Senior Ser- prosecutions in order to gather information cerned citizen with the satisfaction of knowing vices, Long Term Care Systems, have proven concerning dispositions and thereafter report that his or her concerns have been given those dispositions as required by federal law. thoughtful consideration. The Unit also stands ready to assist the lo- As it enters its third full year of existence, cal authorities by referring information con- the Elder Abuse and Neglect Unit is matur- cerning all dispositions to the various state ing into an effective force against those who occupational licensing agencies. The revoca- would take advantage of a vulnerable popu- William Hoyman is a Deputy Attorney General tion or suspension of a professional license is lation. Abuse or neglect can be reported di- assigned to OIFP’s Medicaid Fraud Control Unit a primary goal of a prosecution. This action rectly to the Elder Abuse and Neglect Unit since 2000. For the past three years, he has at (609) 896-8772. concentrated on patient abuse cases. He previously served as both an Assistant County Prosecutor and Public Defender. 106

OIFP Civil Case Notes

During 2006, the following Consent Or- In the Matter of Maria Amendolia In the Matter of Jennifer Clugh ders were executed in amounts of $5,000 Maria Amendolia executed a Consent Order Jennifer Clugh executed a Consent Order and above. Where appropriate, the criminal for $5,000 on January 18, 2006. Amendolia’s for $5,000 on February 15, 2006. Clugh’s ve- disposition of cases that were the subject of vehicle was purchased by the FBI Auto Theft hicle was purchased by the FBI Auto Theft both criminal and civil enforcement actions Task Force as part of a “give up” sting opera- Task Force as part of a “give up” sting op- are reported in the OIFP Criminal Case Notes tion. Following the vehicle’s purchase, she re- eration. Thereafter, she reported the vehicle section of this Annual Report. ported it stolen to the Philadelphia Police stolen to the Philadelphia Police Department Department and filed a fraudulent theft and filed a fraudulent theft claim with AUTO FRAUD claim with State Farm Insurance Company. Allstate Insurance Company. Automobile Application Fraud In the Matter of William Vasquez In the Matter of Andres Acevedo In the Matter of James Graves William Vasquez executed a Consent Or- Andres Acevedo executed a Consent Or- James Graves executed a Consent Order der for $5,000 on January 18, 2006. Vasquez der for $5,000 on February 15, 2006. for $5,000 on July 19, 2006. Graves know- was arrested by Newark Police for the arson Acevedo knowingly conspired with another ingly provided false and misleading informa- of another individual’s vehicle in an auto to “give up” his insured vehicle and to sub- tion to Rutgers Casualty Insurance Company “give up” scheme. The matter was referred mit a fraudulent automobile theft claim to and the Great American Insurance Company. by First Trenton Indemnity Company. Ohio Casualty Group. Graves applied for and obtained auto insur- In the Matter of Sandra Rodriguez In the Matter of Jose A. Vargas ance using the identity of another individual. Sandra Rodriguez executed a Consent Jose A. Vargas executed a Consent Order for In the Matter of Deena Perkins Order for $5,000 on January 13, 2006. $5,000 on March 15, 2006. Vargas knowingly Deena Perkins executed a Consent Order Rodriguez reported her vehicle stolen to the submitted a fraudulent auto theft insurance for $5,000 on August 23, 2006. Following Vineland Police Department and to Rutgers claim to Liberty Mutual Insurance Company. her involvement in an automobile accident, Casualty Insurance Company. She subse- In the Matter of Elsy G. Lazo Perkins contacted GEICO Insurance Com- quently admitted her involvement in the alleged theft and arson of the vehicle. Elsy G. Lazo executed a Consent Order pany to file a claim and learned that her for $5,000 on March 15, 2006. Lazo know- GEICO policy had lapsed. Later that day, she In the Matter of Martin Cardone ingly presented both written and oral false state- applied for automobile insurance via the Martin Cardone executed a Consent Order ments to MetLife Auto & Home Insurance internet with E-Surance Insurance Company for $5,000 on February 15, 2006. Cardone Company and the Union City Police Depart- and was issued a policy subsequent to the ac- filed an auto theft claim stating his vehicle ment as part of a fraudulent auto theft claim. cident. The following day, Perkins filed a had been stolen when, in fact, he was driving In the Matter of Errold Lanier claim with E-Surance for the damage to her the vehicle in Florida. The case was referred Errold Lanier executed a Consent Order vehicle that resulted from the accident that by State Farm Insurance Company. occurred prior to the effective date of the for $5,000 on March 15, 2006. Lanier know- E-Surance policy. In the Matter of Jeannot Wildor ingly withheld and concealed information In the Matter of Joel Serrano Jeannot Wildor executed a Consent Order relevant to a fraudulent auto theft claim sub- for $5,000 on February 15, 2006. Wildor mitted by his wife to Clarendon Insurance Joel Serrano executed a Consent Order for filed an auto theft claim with Liberty Mutual Company. Lanier failed to inform his wife, $5,000 on November 20, 2006. Serrano used Insurance Company when, in fact, she had who was the named insured, that the vehicle another person’s identity to obtain motor- “given up” the vehicle. in question had been repossessed. cycle insurance with Rider Insurance Com- pany. Serrano subsequently filed a property In the Matter of Ricardo Figueroa In the Matter of Manuel Molina damage claim with Rider, which was paid Ricardo Figueroa executed a Consent Manuel Molina executed a Consent Order by the carrier. Order for $5,000 on February 15, 2006. for $5,000 on April 19, 2006. Molina staged Automobile “Give Up” and Theft Claims Figueroa, a Bergen County police officer, the theft of his vehicle and fraudulently re- filed an auto theft claim with State Farm In- ported it stolen to the Newark Police De- In the Matter of Nora Termanini surance Company stating that his vehicle had partment and Allstate Insurance Company. Nora Termanini executed a Consent Order been stolen when, in fact, it had previously In the Matter of James Patunas been sold to an undercover police officer. for $5,000 on January 18, 2006. Termanini James Patunas executed a Consent Order filed an auto theft claim with Hanover In- In the Matter of Juan Negron for $5,000 on April 19, 2006. Patunas filed a surance Company when, in fact, she willingly Juan Negron executed a Consent Order fraudulent auto theft claim with State Farm “gave up” the vehicle. for $5,000 on February 15, 2006. Negron Insurance Company. In the Matter of Suly Ayala had reported his vehicle stolen to the Lake- In the Matter of Romont Thomas wood Police Department. Prior to his filing Suly Ayala executed a Consent Order for Romont Thomas executed a Consent Or- the report, Negron’s vehicle was found burn- $5,000 on January 18, 2006. Ayala submitted der for $5,000 on April 19, 2006. Thomas ing in New York City. Negron subsequently a fraudulent auto theft claim with Liberty filed a fraudulent auto theft claim stating his admitted that he “gave up” the vehicle be- Mutual Insurance Company when, in fact, she vehicle was stolen when, in fact, he gave it cause he could no longer afford the pay- arranged for the vehicle’s disposition. to an undercover New York police officer ments. The matter was referred by High for disposition. The matter was referred by Point Insurance Company. First Trenton Indemnity Company. 108

OIFP Civil Case Notes

ing the accident occurred three weeks prior his 1997 Nissan. Frasier admitted that the gram, and was ordered to pay $170,869 in to the date listed on the Utica claim. claims were based on two accidents which restitution to Reassure America Life Insur- In the Matter of Ellis Decresce never occurred. ance Company. Ellis Decresce executed a Consent Order HEALTH, LIFE, AND In the Matter of Thomas Lagno for $5,000 on October 18, 2006. Decresce DISABILITY FRAUD Thomas Lagno executed a Consent Order knowingly made a false and misleading state- for $5,000 on July 19, 2006. Lagno knowingly ment to New Jersey Manufacturers Insurance False Health Care Claims submitted false and misleading information to Company in connection with his insurance In the Matter of John Huttenberger various health care facilities in pursuit of sev- claim for a motor vehicle accident in which eral workers’ compensation claims. John Huttenberger executed a Consent his car was totaled. New Jersey Manufactur- In the Matter of Linda Van Pelt ers paid $48,633 on this claim. Decresce also Order for $5,000 on March 15, 2006. Linda Van Pelt executed a Consent Order failed to disclose that his vehicle was being Huttenberger allegedly failed to disclose that for $5,000 on July 19, 2006. Van Pelt, a used for business purposes and failed to dis- he had consulted with a physician regarding a physician, failed to disclose the fact that she close the location where the vehicle was ga- surgical procedure that was not performed continued to treat patients while collecting raged, which resulted in an annual premium prior to filling out his application for supple- total disability and business overhead ex- savings of $1,140. mental health insurance. The matter was referred by United Healthcare Company. pense benefits from UNUM Provident In the Matter of Judith Hoffman In the Matter of Steven L. Prosser Corporation. Judith Hoffman executed a Consent Order In the Matter of Willis Huggins for $5,000 on October 18, 2006. Hoffman Steven L. Prosser executed a Consent Or- Willis Huggins executed a Consent Order knowingly altered a police report by chang- der for $5,000 on March 15, 2006. Prosser for $5,000 on November 20, 2006. Huggins ing the time of an accident in order to be eli- submitted fraudulent receipts to Horizon knowingly failed to report that he had re- gible to pursue a property damage claim. The Blue Cross Blue Shield for reimbursement for turned to work for a new employer while matter was referred by Allstate Insurance services that were not rendered to him. continuing to collect workers’ compensation Company. In the Matter of Carol Ann Benvenuto benefits. The matter was referred by New In the Matter of John L. Knight Carol Ann Benvenuto executed a Consent Jersey Manufacturers Insurance Company. Order for $5,000 on May 17, 2006. Benvenuto, John L. Knight executed a Consent Order In the Matter of Brenda Hoffman for $5,000 on November 20, 2006. Knight while employed as a receptionist at a medical Brenda Hoffman executed a Consent Or- conspired with another individual to file a provider’s office, submitted false medical der for $5,000 on November 17, 2006. false police report that misrepresented the claims to Horizon Blue Cross Blue Shield for Hoffman was working while collecting long- date of a motor vehicle accident. The reimbursement for services that were not term disability benefits through her former fraudulent report was made in order to file a rendered to her. She fraudulently obtained employer. The matter was referred by The claim with Clarendon National Insurance approximately $1,935 for phony health in- Hartford Life and Accident Company. Company, knowing that the individual’s surance claims to which she was not entitled. policy had lapsed at the time of the accident. In the Matter of Stephanie Slavitt In the Matter of W. Lance Kollmer Staged and Fictitious Accidents Stephanie Slavitt executed a Consent Or- W. Lance Kollmer executed a Consent Or- der for $5,000 on August 23, 2006. Slavitt der for $100,000 on December 20, 2006. In the Matter of Anhuar Bandy submitted Custodial Nursing Questionnaire Kollmer, a physician, knowingly misrepre- Anhuar Bandy executed a Final Judgment Forms to John Hancock Life Insurance Com- sented the extent of his physical limitations by Consent in the amount of $2 million on pany for services not rendered. and continued to perform surgical proce- August 7, 2006. Bandy committed insurance False Disability Claims dures while receiving disability benefits. The fraud by conspiring to stage automobile acci- matter was referred by US Life/American dents and to submit false and misleading pa- In the Matter of Bernard Gelman General Insurance Company. perwork in support of fraudulent claims to Bernard Gelman executed a Consent Or- Life Insurance Fraud numerous insurance companies in order to der for $5,000 on January 18, 2006. Gelman collect the proceeds. provided an altered date for his son’s resigna- In the Matter of Atul Agarwala In the Matter of Scot Frasier tion from a former employer in order for his Atul Agarwala executed a Consent Order for $30,000 on August 23, 2006. Agarwala Scot Frasier executed a Consent Order for son to obtain disability benefits under a conspired with an agent working for Equi- $5,000 on June 21, 2006. Frasier allegedly policy to which he was not entitled. The table Life Insurance Company to backdate a submitted two separate fraudulent auto matter was referred by Prudential Insurance life insurance policy and increase the amount property damage claims to Liberty Mutual Company (High Point). of death benefits in order to gain the pro- Insurance Company and State Farm Insur- In the Matter of Richard Serbin ceeds. The policy was in the name of ance Company, respectively, with regard to Richard Serbin executed a Consent Order Agarwala’s brother who perished in the for $50,000 on February 15, 2006. Serbin World Trade Center disaster. was working while collecting disability benefits. Serbin previously pled guilty to falsify- Provider Fraud ing records, was admitted into the PTI Pro-

110 In the Matter of Martha Haldopoulos for $5,000 on March 15, 2006. Bhavesh sub- the Medicaid and PAAD rebate program. Martha Haldopoulos executed a Consent mitted altered and fraudulent receipts to Se- The New Jersey portion of the settlement is Order for $5,000 on March 15, 2006. lective Insurance Company in support of a $4,446,449, of which $981,732 represents Haldopoulos was an unlicensed provider property damage claim for his business. the State share for the Medicaid program and who billed for services. The matter was re- Insurance Professional Fraud $2,566,475 for the PAAD program. ferred by Oxford Health Insurance. In the Matter of Umberto Mazzone Glaxo, Inc., and SmithKline Beecham, Inc. In the Matter of Gene Harnick Umberto Mazzone executed a Consent The State of New Jersey entered into a Gene Harnick executed a Consent Order Order for $5,000 on May 17, 2006. national settlement with Glaxo over the ma- for $5,000 on August 23, 2006. Harnick, a Mazzone, while employed as a claims ad- nipulation of the average wholesale price for dentist, submitted fraudulent dental claims to juster at Preserver Insurance Company, Zofran and Kytril, which are prescribed to Aetna US Healthcare Insurance Company for knowingly diverted insurance claim checks treat nausea. On August 30, 2006, the New dental procedures that were not rendered. to his own personal bank account. Jersey Medicaid program received $900,919, In the Matter of Kimberly McCauley of which the State share was $408,178, including $204,089 in restitution and a Kimberly McCauley executed a Consent MEDICAID CIVIL CASE SETTLEMENTS $204,089 penalty. This recovery was increased Order for $5,000 on March 15, 2006. by $19,204 in post-agreement interest. McCauley, a chiropractor, knowingly billed OIFP’s Medicaid Fraud Control Unit par- Cigna Insurance Company for chiropractic ticipates in state and federal global settle- Omnicare services not rendered. ment cases where defendants are New Jersey On December 8, 2006, New Jersey re- Medicaid providers. These cases are generally ceived $333,263 in a Medicaid settlement PROPERTY AND coordinated through the National Associa- with Omnicare. The total New Jersey settle- CASUALTY FRAUD tion of Medicaid Fraud Control Units ment, including both the federal and state False Homeowners Claims (NAMFCU). Most of these cases are federal share, was $684,557. Omnicare is an institu- qui tam filings. The settlement agreements tional pharmacy provider. The settlement re- In the Matter of Susan Bonfiglio generally require the corporate defendants to solved allegations that Omnicare improperly Susan Bonfiglio executed a Consent Order cooperate with federal and state law en- switched prescriptions for fluoxetine, the ge- for $5,000 on January 18, 2006. Bonfiglio forcement. Since the Medicaid program is neric form of Prozac, for Medicaid benefi- enhanced the extent of damage to her home funded jointly by the state and federal gov- ciaries without their doctors’ knowledge. By on a claim she filed with Liberty Mutual In- ernments, settlement awards generally con- switching to tablets from the capsule form surance Company. sist of both a federal and state share, repre- of the drug, Omnicare avoided the lower In the Matter of Sharon H. Barrett senting the proportionate contribution of price allowed for the capsules under the fed- each governmental entity. The following eral upper payment limit. Sharon H. Barrett executed a Consent Or- Medicaid civil case settlements were entered der for $5,000 on June 21, 2006. Barrett into in 2006: claimed that a video camera and equipment were damaged as the result of a fire at her Serono, Inc., and Serono residence and submitted fraudulent receipts to Laboratories, Inc. Cumberland Mutual Fire Insurance Company Serono Laboratories, Inc., makers of to receive compensation for these items. Serostim, an AIDS treatment drug, entered In the Matter of Phyllis Manasseri into a settlement with the State of New Jer- Phyllis Manasseri executed a Consent Or- sey on February 21, 2006. The joint state/ der for $5,000 on September 20, 2006. federal investigation of Serono Laboratories Manasseri filed a fraudulent property loss showed manipulated computer software pro- claim with Chubb Insurance Company stat- grams used to assist in the diagnosis and ing that several items were stolen when, in prognosis of AIDS patients, and illegal kick- fact, she had previously sold them. backs paid to doctors to prescribe Serostim in order to increase its sales revenues. The In the Matter of Thomas Tizzio New Jersey portion of the national settle- Thomas Tizzio executed a Consent Order ment is $24,825,800 in restitution and inter- for $5,000 on October 18, 2006. Tizzio pre- est, $11,855,746 of which represents the sented false and misleading statements to State share. AIG Personal Lines for a homeowners bur- King Pharmaceuticals, Inc. glary claim for stolen watches knowing that the watches were not stolen. King Pharmaceuticals, Inc., entered into a settlement with the State of New Jersey on False Property Damage Claims April 12, 2006, based upon the underpay- In the Matter of Dave Bhavesh ment of its rebates for generic drugs under Dave Bhavesh executed a Consent Order

111

State v. Rajan Rihshinghani State v. Nguyet Thach, et al. In June 2006, the court entered a $10,000 On September 8, 2006, Default Judg- Stipulation of Settlement and Consent Judg- ments, including civil penalties, attorney fees ment against Rajan Rihshinghani arising from a and costs, were obtained against Sang Son in fraudulent credit disability claim case wherein the amount of $17,226 and against Nguyet Rihshinghani claimed to be disabled so that he Thach in the amount of $17,288. Son was could receive insurance payments to meet his the driver of a vehicle that was involved in home equity loan obligations. Rihshinghani, in an accident. According to the police report fact, was gainfully employed when he re- and the driver of the other vehicle, there ceived $4,570 in credit disability benefits to were no passengers in Son’s vehicle at the which he was not entitled. time of the accident. Thach subsequently State v. Mitchell Collins filed a fraudulent PIP claim for injuries she allegedly sustained in this accident as a pas- Mitchell Collins fraudulently obtained life senger. Thach and Son also provided false insurance policies with Omaha Insurance statements to the insurance carrier in support Company in the names of his girlfriend’s of this claim. children by stating that he was their stepfa- ther. In August 2006, the State was granted State v. Michael Harris Summary Judgment in this matter to include On September 22, 2006, a Default Judg- $10,000 in civil penalties for two violations ment was obtained against Michael Harris in of the Fraud Act and attorney fees in the the amount of $17,294. Harris falsely re- amount of $150. ported to the police and an insurance carrier State v. Timothy Hinchman that he was a passenger in a vehicle that was involved in an accident, when, in fact, he On August 4, 2006, a Default Judgment, was a bystander to the incident. Harris sub- including civil penalties, attorney fees and sequently treated with a medical provider for costs, in the amount of $18,472 was ob- alleged injuries to his arm and neck and a tained against Timothy Hinchman. PIP claim was submitted on his behalf. Har- Hinchman staged the theft of his vehicle ris was eventually arrested and pled guilty to and filed a fraudulent vehicle theft claim Health Care Claims Fraud. with his insurance carrier. Hinchman subsequently pled guilty to charges of attempted theft by deception. State v. Charles Monge, et al. In September 2006, a Default Judgment was obtained against Charles Monge in the amount of $16,682 for his role in the staged theft and arson of a 1999 Honda Accord.

113 Professional Licensing Proceedings

Medical plaint filed on May 22, 2006. Those allega- Chiropractic tions included, but were not limited to, In the Matter of Axat Jani, M.D. Collins performing grossly inadequate clinical In the Matter of Craig Klein, D.C. On January 19, 2006, to have been effec- examinations and medical management of On February 16, 2006, the State Board of tive October 15, 2004, the State Board of patients reporting personal injury; Collins di- Chiropractic Examiners suspended the license Medical Examiners suspended the license of recting, authorizing, ratifying or condoning of Craig Klein, D.C., for a period of five Axat Jani, M.D., for a period of five years the ordering and performance of unnecessary years with the first two years active and the with the first two years retroactive to Octo- cervical and lumbar electrodiagnostic testing remainder stayed to be a period of probation. ber 15, 2004, and the remainder stayed to be routinely on all patients involved in rear-end The action was based upon the resolution of a period of probation. The action was based auto collisions; Collins directing, authorizing, an Accusation filed against Klein alleging the on a guilty plea to Health Care Claims Fraud. ratifying or condoning the performance of use of “runners” for referral of patients. electrodiagnostic testing on patients, some In the Matter of Myron Moskowitz, D.P.M. In the Matter of Mark Radowitz, D.C. of whom he had never seen or examined and On March 29, 2006, the State Board of permitting tests to be performed by unli- On May 8, 2006, the State Board of Chi- Medical Examiners suspended the license of censed and unsupervised persons; Collins en- ropractic Examiners accepted the licensure Myron Moskowitz, D.P.M., for a period of gaging in an extended pattern of conduct to surrender of Mark Radowitz, D.C., to be three years with the first year active and the which he allowed himself to be employed by deemed a revocation effective April 21, remainder stayed to be a period of proba- unlicensed persons to perform professional 2006. The action was based on Radowitz’ tion. The action was based on Moskowitz services in violation of N.J.A.C. 13:35- guilty plea to Health Care Claims Fraud. practicing podiatric medicine with an ex- 6.16(f); and Collins ordering, ratifying or In the Matter of Kimberly McCauley, D.C. (a/ pired biennial registration and billing insur- condoning diagnostic testing performed by k/a Kimberly Stark, D.C.) ance carriers while suspended. himself and others in a grossly incompetent On July 12, 2006, the State Board of Chi- In the Matter of Michael Fizicki, M.D. or grossly negligent manner, preparing test reports containing fabricated data and un- ropractic Board Examiners reprimanded the On July 13, 2006, the State Board of supported diagnoses and billing at grossly in- license of Kimberly McCauley, D.C., based Medical Examiners accepted the voluntary flated and excessive fees. upon McCauley billing an insurance carrier surrender of the medical license of Michael for chiropractic services not rendered to two Fizicki, M.D. The action was based on patients for a total of ten visits. Fizicki engaging in the submission of alleg- Dental edly fraudulent insurance claims resulting in In the Matter of Rosemarie DiMeola, Pharmacy an investigation and subsequent settlement Registered Dental Hygienist with Horizon Blue Cross/Blue Shield. In the Matter of William Adamshick, R.P. The State Board of Dentistry reprimanded In the Matter of Mark Freilich, M.D. Rosemarie DiMeola, R.D.H., for automobile On March 9, 2006, the New Jersey Board of Pharmacy suspended the license of Will- On September 14, 2006, the State Board application fraud. iam Adamshick, R.P., for one year based of Medical Examiners suspended the medi- In the Matter of Roger Brown, D.D.S. upon Adamshick’s criminal conviction for cal license of Mark Freilich, M.D., for a pe- Health Care Claims Fraud. riod of two years with the first six months On May, 17, 2006, the State Board of active effective October 1, 2006, and the re- Dentistry suspended the license of Roger In the Matter of Michael Stavitski, R.P. mainder stayed to be a period of probation. Brown, D.D.S., for a period of five years with the first 364 days active effective July On November 9, 2006, the New Jersey The action was based on a non vult plea to Board of Pharmacy revoked the license of complaints alleging false, negligent, and in- 29, 2005, and with the remainder stayed to be a period of probation. The action was Michael Stavitski, R.P., based upon his crimi- competent interpretations of MRI studies, nal conviction for Health Care Claims Fraud. providing medical services for an MRI facil- based upon Brown’s guilty plea to Health In the Matter of Ojah Pharmacy ity not licensed by the Department of Care Claims Fraud. Health and Senior Services during the period On December 14, 2006, the State Board of of time when the services were rendered, Professional Counselors Pharmacy revoked the permit of Ojah Phar- and failing to hold a current biennial regis- macy to operate as a pharmacy in the State of In the Matter of Anthony Panichella, P.C. tration during the period in question. New Jersey based upon Ojah Pharmacy being In the Matter of Ronald Collins, M.D. The Professional Counselor Examiners convicted of Health Care Claims Fraud in Committee accepted the voluntary surren- that the corporation paid Medicaid recipients On November 14, 2006, the State Board der of the license of Anthony Panichella, for their prescriptions for life-saving medica- of Medical Examiners accepted the surren- P.C., with prejudice based upon Panichella’s tions with the prescriptions being billed for der of the license of Ronald Collins, M.D., guilty plea to unauthorized practice of but never dispensed to the actual patient. with prejudice. The action was based on medicine. The scope of a professional coun- Collins entering a plea of no contest to all of seling license does not permit the prescrib- the allegations contained in the State’s coming of medicine.

114