November 19, 2007

Purchasing insuraNCE TOO LATE BRINGS FRAUD CONVICTION

RICHMOND, VA -- A Norfolk man found out the hard way that it pays to have motorcycle insurance before your bike is stolen.  Not only is he without a motorcycle now, but he has been convicted of making a false police report and attempting to obtain money by false pretense – better known as insurance fraud.  

When the Norfolk man’s story about his stolen motorcycle didn’t add up, Virginia State Police Trooper J.L. Peters did a little digging and uncovered an attempt to commit insurance fraud. Ruben Cervantes of Norfolk claimed that he left his motorcycle unattended on an I-64 interstate on-ramp after he wrecked it early on the morning of June 11, 2007.  According to Cervantes his bike was inoperable after the crash, and he walked home leaving the damaged motorcycle parked on the curb.  Cervantes said he did not call police at that time.  Instead, he said he returned the next morning to retrieve the wrecked motorcycle only to discover it had been stolen and notified the Virginia State Police. 

Trooper Peters searched the location where the wreck supposedly occurred and was unable to find any debris or other evidence of a crash. Noting inconsistencies in Cervantes’ story, Trooper Peters contacted Cervantes’ insurance agent and discovered the insurance policy for the motorcycle was purchased the same day as the alleged theft.

After further investigation by VSP Insurance Fraud Special Agent Russell L. Eley III, Cervantes was arrested and charged with submitting a False Police Report and Attempting to Obtain Money by False Pretense. He was sentenced to six months on each misdemeanor charge with six months suspended.  Cervantes’ insurance policy was rescinded and his premiums refunded.

The VSP is committed to “Stamp Out” insurance fraud occurring in the Commonwealth. If you have knowledge of a fraudulent insurance scheme or suspect you may have been the victim of insurance fraud, report the activity to Virginia State Police Insurance Fraud Program on the insurance fraud hotline at 1-877-62FRAUD (1-877-623-7283) or visit www.stampoutfraud.com.  Having a sharp eye for fraud may also lead to a reward of up to $25,000.

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August 10, 2007

selling fraudulent insurance PRODUCTS TO senioRs
Lands Virginia Man in Prison

RICHMOND, VA – A former Chesapeake, Va. man will be spending up to ten years in a Virginia state prison and five years in a federal prison for fraudulently selling insurance products to the elderly, using the stolen identity of two of his former employees, and bilking insurance companies out of hundreds of thousands of dollars. 

Anthony John Carrea, 44, was a licensed insurance agent and financial consultant in the Hampton Roads area until his privileges to conduct business as an insurance agent, securities agent and financial consultant were permanently revoked in mid-2003 by the State Corporation Commission (SCC). The revocation was the result of a complaint filed by one of his victims in 2000. 

However, the fact that he didn’t have a valid license to sell insurance-related products didn’t stop Carrea from his practice of taking advantage of senior citizens. The VSP Insurance Fraud Unit in Chesapeake was contacted by the SCC regarding Carrea’s ongoing activities.  A criminal investigation by the VSP revealed that Carrea was using the identity of former employees to fraudulently sell insurance products and annuities, as well as his financial planning services.

The VSP investigation uncovered approximately 20 victims of Carrea’s criminal activities, ranging in age from 58 to 85.    Several victims also paid Carrea consulting fees for services the SCC had prohibited him from conducting.   In addition to victimizing the elderly, Carrea also scammed three insurance companies out of $260,000 in commissions by fraudulently selling annuities for them.

According to the VSP, Carrea was able to carry out his illegal activities by using the identity of former employees.  One such former employee, whose identity was used, faced action by the Internal Revenue Service for failing to pay income taxes on commissions she had allegedly earned, when in fact she never sold an insurance product in her life. 

At the conclusion of the investigation by the VSP, Carrea was extradited from North Carolina to Virginia to face 13 charges of Obtaining Money by False Pretense.    He was convicted of a total of seven charges in the jurisdictions of Virginia Beach, Chesapeake and Portsmouth, which resulted in Carrea being sentenced to the maximum of 20 years in prison on four of the charges – 80 years total. All but ten years were suspended, with 20 years of supervised probation upon release from prison.

Additionally, as a result of a joint investigation between VSP, the FBI and IRS agents, Carrea received five years in federal court for Aggravated Identity Theft and Money Laundering. Assistant United States Attorney Robert J. Seidel, Jr. prosecuted the case for the United States.

The VSP is committed to “Stamp Out” insurance fraud occurring in the Commonwealth. If you have knowledge of a fraudulent insurance scheme or suspect you may have been the victim of insurance fraud, report the activity to Virginia State Police Insurance Fraud Program on the insurance fraud hotline at 1-877-62FRAUD (1-877-623-7283) or visit www.stampoutfraud.com.  Having a sharp eye for fraud may also lead to a reward of up to $25,000.

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August 1, 2007

INSURANCE FRAUD ARRESTS ON THE RISE IN VIRGINIA

Fraudsters beware!  The Virginia State Police (VSP) Insurance Fraud Program (IFP) reports arrests for the crime of insurance fraud for the first half of 2007 have surpassed the total number of arrests for 2006.

According to the most recent statistics available for the first half of this year, VSP insurance fraud special agents have made 110 arrests for the crime of insurance fraud or “obtaining money by false pretense.”  A total of 89 arrests for insurance fraud were reported for 2006.

“This is a significant increase,” explained Lieutenant W. Roger Rector, Insurance Fraud Program Coordinator, “due in part to the hard work of the Department’s special agents as well as the quality of information we receive about suspected insurance fraud from both the insurance industry and Virginia citizens.”

The number of investigations initiated by VSP special agents is also up – 26 percent – when comparing the first six months of 2007 to the same time frame in 2006. Another figure that’s up is Web usage.  While the number of referrals sent to the IFP via the toll-free hotline, fax and mail are down, the insurance fraud referrals received through the Web are up almost 27 percent.

“Insurance fraud affects us all,” said Lt. Rector.  “The result is Virginia citizens not only pay higher insurance premiums, but the hidden costs of this crime mean we all pay more for everyday goods and services.”

Citizens who suspect insurance fraud or feel they have been a victim of insurance fraud are encouraged to notify the Virginia State Police Insurance Fraud Program at 1-877-62-FRAUD (623-7283) or go to www.stampoutfraud.com and click on “Report Fraud.”  They can remain anonymous.  Citizens may also be eligible for a reward of up to $25,000 for information that leads to an arrest for the crime of insurance fraud.

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June 6, 2007

HURRICANES RAISE RISK OF FRAUD
VIRGINIA STATE POLICE ENCOURAGE CITIZENS TO PROTECT THEMSELVES AGAINST INSURANCE FRAUD

RICHMOND – The 2007 hurricane season is underway, and predictions are that the number of Atlantic coast storms will be above average.  Not only do Virginia citizens need to prepare themselves for the high winds and waters that accompany the storms, but they also need to take steps to guard against the fraudsters, cheaters and crooks who often show up in the storm’s aftermath, ready to take advantage of any disaster.

According to the National Oceanic and Atmospheric Administration (NOAA), the Atlantic coast has a 75 percent chance of an above-normal hurricane season this year.  The NOAA Climate Prediction Center estimates there will be 13–17 named storms with 7-10 of those storms becoming hurricanes.  Of those hurricanes, NOAA predicts 3-5 will become major storms of Category 3 strength or higher. 

“This active hurricane season increases the chances of unscrupulous contractors taking advantage of vulnerable citizens who have sustained damage to their property as a result of the disaster,” said Lieutenant W. Roger Rector, Insurance Fraud Program (IFP) coordinator. 

“We encourage Virginians to plan ahead and be prepared for potential disasters,” Rector commented. “Don’t let a disaster victimize you twice.”

Insurance fraud costs Virginians more than $200 a year in increased premiums and increases the costs of everyday purchases by $200 to $1,000 a year.  On a national level the effects of insurance fraud are estimated to cost more than $80 billion a year. Citizens can protect themselves from becoming victims of insurance fraud scams or committing insurance fraud themselves by taking a few simple precautions.

•         Hurricane preparedness information for Virginia is available at www.vdem.state.va.us.
   

•      Always use a licensed contractor.  All contractors in Virginia must be licensed, bonded and carry insurance coverage for work over $1,000.  This includes out-of-state contractors who are working in Virginia.  To find out if a contractor is licensed or to report an unlicensed contractor, contact the Virginia Department of Professional and Occupational Regulation. Click on www.dpor.virginia.gov or call (804) 367-8504.
   

•         If possible, get more than one estimate and make sure the estimates are in writing.
   

•      Get references and check them out.
   

•      Avoid contractors who use high-pressure tactics, have overly-friendly sales pitches or make offers that seem too good to be true.
   

•      Ask to see the contractor’s driver’s license. Write down his driver’s license number as well as his vehicle’s license number. 
   

•      Work with your insurance company to make sure all of the work being done to your property is approved and will be covered by your insurance.  Be wary of unscrupulous contractors who promise to take care of your deductible and handle all of your insurance paperwork.
   

•      Never pay a contractor in full before the work is completed; don’t pay in cash; and never sign a blank contract. Make sure you understand all of the contract terms.
   

•         Educate yourself. Become familiar with your homeowner, renter or vehicle insurance policies to understand what is covered and the amount of your deductible.
   

•      Make an inventory of your household items and keep it in a secure location, preferably off-site.  If possible, keep your receipts or proofs-of-purchase for big ticket items, such as jewelry, televisions or cameras in that same location.  Free home inventory software can be downloaded from the Insurance Information Institute at www.iii.org.  
   

•      Claim only those damages that are a result of the incident.  Don’t include previous damage from an unrelated incident as part of your claim.
   

•         Don't inflate the value of your claim to cover your deductible or past premiums.
   

•         Don't fall victim to the mindset of "everyone's doing it" and submit a false or inflated claim thinking you’ll make a little extra money as well.

If you have knowledge of a fraudulent insurance scheme or suspect you may have been the victim of insurance fraud, report the activity to Virginia State Police Insurance Fraud Program on the insurance fraud hotline at 1-877-62FRAUD (1-877-623-7283) or visit www.stampoutfraud.com.  You may remain anonymous. If your information leads to an arrest, you may also be eligible to receive a reward of up to $25,000 – just mention the reward when reporting suspected insurance fraud.