Examples of Insurance Fraud Investigations - Fiscal Year 2012
The following examples of insurance fraud investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Texas Men Sentenced for Insurance Fraud
On August 2, 2012, in Houston, Texas, Christopher Purser was sentenced to 188 months in prison and three years of supervised release. Also sentenced were Malchus Boncamper, of the Federation of St. Kitts and Nevis, West Indies, and Edmund Benton, of Scottsdale, Ariz. for conspiring to launder proceeds of the scheme. Boncamper and Benton received respective sentences of 97 months and 120 months in prison. Benton and Boncamper were also ordered to pay fines of $17,500 and $1,000, respectively. The judge also ordered each defendant to pay restitution to the victims of the scheme. According to court documents, the fraud scheme began in 2000 when Purser sold liability insurance policies that were supposedly underwritten, but those policies were fake. In 2003, the Texas Department of Insurance revoked his license and ordered him to cease and desist from conducting insurance business in Texas; however, from 2004 through 2006, he continued to sell fake policies. Boncamper conspired to launder the proceeds of the fraud scheme through bank accounts in St. Kitts and elsewhere. Boncamper also acquired four insurance companies for the scheme in St. Kitts and Nevis and created financial statements for the companies listing assets he knew were worthless, including bonds purportedly guaranteed by a Swiss bank that was fictitious. Benton also conspired to launder the proceeds of the fraud scheme. Benton obtained liability insurance in 2003 from a company in the Caribbean island of St. Vincent. That company was controlled by someone in Barbados through another St. Vincent entity. Benton admitted knowing that Purser was not licensed or authorized to sell insurance in Texas, and that his company did not have the ability to pay claims. Benton also acknowledged receiving proceeds of the fraud in an account he maintained in The Bahamas.
Leader of Massive Staged Car Accident Ring Sentenced
On May 25, 2012, in West Palm Beach, Fla., Oscar Luis Franco Padron was sentenced to 96 months in prison, three years of supervised release and ordered to pay $4,351,082 in restitution. Padron, who managed several health-care clinics and recruited patients, pleaded guilty in January 2012 to conspiracy to commit mail fraud, conspiracy to commit money laundering and conspiracy to structure transactions for his role in a staged accident fraud scheme. In his guilty plea, Padron admitted that he and others would find individuals who owned automobiles and had car insurance to participate in staged automobile accidents. Padron also admitted that, when converting the deposits of the mail fraud proceeds to cash, it was done in a way to avoid the $10,000 currency transaction reporting requirement.
New Mexico Woman Sentenced for Federal Money Laundering Conviction
On May 15, 2012, in Las Cruces, N.M., Deniece Sanchez was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay $144,494 in restitution to Farmers Insurance Agency for conspiracy to launder money. According to court records, between March 9, 2007, and August 19, 2009, Sanchez and her now-estranged husband, Joseph Reyes Montes, conspired to submit fraudulent insurance claims to Farmers on more than 30 separate occasions. Montes, who was then employed as a claims supervisor for Farmers, laundered the stolen money through Sanchez’s business bank account to give the funds the appearance of legitimate business income. On July 28, 2011, Montes was sentenced to 12 months and one day in prison and ordered to pay $149,779 in restitution to Farmers.
Defendants Sentenced on Insurance Fraud Charges
On March 8, 2012, in Detroit, Mich., Carolyn Renee Moore was sentenced to 35 months in prison her role in filing fraudulent returns and an insurance fraud scheme. In addition, Moore was ordered to pay more than $260,000 in restitution to the IRS and approximately $70,000 to Progressive Michigan Insurance. Also sentenced were Leana McGee and Tiara Baskin, of Saginaw, for their roles in the insurance fraud scheme. Both McGee and Baskin were each sentenced to six months of home confinement and five years of probation, as well as ordered to pay restitution of more than $25,000 to Progressive Michigan Insurance. Both were convicted at trial of conspiracy to defraud Michigan Progressive Insurance Company. Co-conspirator Tawhona Hunt, of Saginaw was also sentenced three years of probation. At trial in August 2011, Moore, McGee and Baskin were convicted by a federal jury for mail fraud conspiracy. According to court records, from 2006-2008, Moore, McGee, Baskin and Hunt participated in preparing claim forms seeking payment from Progressive Michigan Insurance Company for home health care services provided to Moore. The insurance claims contained false information that fabricated the hours worked and services provided to Moore by McGee, Baskin and Hunt. As a result, the insurance company issued checks totaling more than $61,000 to McGee, Baskin and Hunt. In addition, Moore prepared tax returns for McGee, Hunt and Baskin using false information to eliminate the taxes that should have been paid on the income they received by participating in the fraud scheme.
Georgia Man Sentenced in International Insurance Fraud Scheme
On January 20, 2012, in Tampa, Fla., Richard Solomon, of Stone Mountain, Ga., was sentenced to 66 months in prison, three years supervised release and ordered to pay $35,963,378 in restitution for insurance fraud and money laundering. According to court documents, Solomon and several other defendants used a series of sham offshore companies, rented assets, and falsely-inflated financial statements to issue worthless insurance policies, reinsurance, and financial guarantee bonds across the globe. In the Caribbean island nation of St. Christopher and Nevis (St. Kitts and Nevis), the defendants formed shell “insurance” companies that were never licensed to engage in the business of insurance. In Costa Rica, the defendants formed additional shell companies as wholly-owned subsidiaries of the St. Christopher and Nevis “insurance” shells. And in Panama and elsewhere, the defendants located assets – usually bogus certificates of deposit – for which they arranged to pay “rental fees” so they could display those assets on the “insurance” companies’ financial statements. The defendants then generated fraudulent financial statements and unqualified audit opinions, based in part on the “rented” assets, which created the illusion that the “insurance” companies had the capitalization necessary to issue insurance and pay claims. The defendants’ bogus “insurance” companies issued worthless insurance policies, reinsurance, and financial guarantee bonds to victims all over the world, including in the Middle District of Florida, through promissory note programs known as Premier Holidays International, Inc. and World Vision Entertainment, Inc. Victims who invested in the promissory notes were told that the notes were backed by insurance in the form of financial guarantee bonds. Because those bonds were fraudulent, however, the victims ended up losing more than $50 million.