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Outstanding Fraud Fighters receive awards in Virginia

RICHMOND, Va. The Virginia State Police (VSP) Insurance Fraud Program (IFP) recognized seven
Virginia “Fraud Fighters” during the recent Virginia Chapter of the International Association of
Special Investigation Units (VAIASIU) Annual Fraud Seminar held in Richmond. The Fraud Fighters
Award, established in 2005 by the IFP, recognizes those individuals who demonstrate their
willingness to go the extra mile fighting fraud in the commonwealth.

Nominees represented the categories of law enforcement, commonwealth’s attorneys and the
insurance industry. The awards were based on each nominee’s contributions to Virginia’s antiinsurance
fraud efforts, which include their involvement and contribution to investigations;
prevention and proactive activities; enforcement; interaction with the insurance community; or
financial impact by recoveries and restitution resulting from their fraud-fighting efforts.

The recipients of the 2012 Fraud Fighters Award are:

  • VSP Special Agent Brandon Blakey received a notification from Geico Insurance about a
    couple making multiple claims with different insurance companies for the same damage to
    their 2006 Dodge Stratus. Blakey coordinated with all of the involved insurance adjusters
    and, after reviewing photographs and estimate reports, they determined each had
    performed estimates for the same damage. Blakey interviewed the couple and was able to
    get a confession for all of the false claims. Going beyond the initial information received
    from Geico, Blakey noticed a report on an insurance claims database that showed the
    fraudster filed a theft claim with Progressive for his 1993 Eagle Vision. Blakey was able to
    get the man to confess his vehicle was never stolen and he sold it four years ago to a junk
    yard after he damaged the motor. This investigation resulted in nine felony arrests. As a
    crime scene investigator, Blakey has also assisted the auto theft program with processing
    numerous stolen vehicles recovered in the Tidewater area.
  • Margaret “Evie” Eastman, deputy commonwealth’s attorney for Arlington County, is
    carrying the task and the mission of fighting fraud into the courts. Since 1990 she has
    served Arlington County and the City of Falls Church as a commonwealth’s attorney,
    highlighted by her promotion in 2002 to deputy commonwealth’s attorney. Strong in the
    prosecution of financial and white collar crimes, she is described by her supervisor,
    Commonwealth’s Attorney Theo Stamos, as detail-oriented and dogged in her pursuit of
    evidence. She is willing to look outside the box, putting forth extra effort to piece together
    cases from disparate and discrete facts. Her experience level is broad and deep, having
    prosecuted murder, sexual assault and street crimes. Eastman has been the financial crimes
    advisor to Arlington Police – administering special and grand juries; and conducting training
    – while carrying a full trial caseload. She’s also a member of the Virginia State Bar. Eastman
    has used her time and position well to take an active interest in the prosecution of insurance
    fraud. Her influence has enhanced positive experiences for insurance representatives, law
    enforcement and other prosecutors with her very active participation in developing Red Flag
    training for the Virginia State Police. She has served as faculty and mentor, and continues
    her full-time advocacy.
  • Based on a referral from MetLife, VSP Special Agent Phillip Edmonds took on a case
    involving a matured endowment check mailed to the address of record for the insured, Dale
    Smith. MetLife received a call from a Dale L. Smith to let them know the check was not his
    and he would be returning it. Several months went by and the check wasn’t returned to
    MetLife. After several attempts to contact this Dale L. Smith by phone and mail failed,
    MetLife tried to recover the funds through the bank of first deposit. They were unsuccessful
    since the credit union said the check went into the account of a Dale Smith, and they would
    not send a credit to MetLife. It was determined the Dale Smith who owned the policy
    actually died in February 23, 1980. The Dale L. Smith who received the check attempted to
    hide the funds by transferring them to an account in his wife’s name at the credit union.
    Without the interest and time Edmonds spent working this case, MetLife would not have
    received the money back from Dale Smith’s account at the credit union. It was Special
    Agent Edmonds who gets credit in this case. The recovery amount was $5,860.48; however,
    greater than the financial impact is the statement that fraud won’t be tolerated.
  • Because of the efforts of Sheryl Hines, senior investigator with the Bureau of Insurance
    (BOI), Mark Stopchinski, who had defrauded or attempted to defraud at least 1,700
    policyholders, insurance agents, and life insurance companies, will have to spend 36 months
    in prison and make restitution of $1.6 million to his victims; as well as forfeit a million dollar
    condominium in Arlington, cash held in a retirement fund and a vacation home on the
    Chesapeake Bay, which he built with stolen funds. This corrupt insurance salesman, who
    already surrendered his license to the BOI, found another way to perpetrate large scale
    insurance fraud. Realizing that further BOI actions against this fraudster would have little or
    no effect, Hines ultimately contacted the FBI and offered to share the results of the BOI
    investigation. She worked with both the FBI and U.S. Postal Inspection Service to bring an
    end to the fraud, which had likely affected thousands of policyholders throughout the U.S.
    Without Hines’ referral to the FBI, her sharing of the BOI’s previous investigative findings
    and her continued participation in the investigation, none of these outstanding
    accomplishments, including prison time, restitution and substantial recovery of lost
    commission payments by the victim insurance companies would have happened. 
  • John Huddleston, senior ISS supervisor with Erie Insurance, began his career as a fraud
    fighter in law enforcement where he served for 11 years as a Bedford County, Va., deputy
    sheriff. In 1995, he interviewed for the position of fraud investigator with Erie Insurance,
    was hired as the Roanoke Branch fraud investigator, and immediately became a valuable
    member of the Erie Claims Team in Roanoke. He was promoted to supervisor of the Erie
    Insurance ISS Southeastern Territory in 1999. His track record for leadership led to a
    promotion to his current rank as senior supervisor. Huddleston is responsible for providing
    guidance and support for his staff of investigators, as well as ensuring the investigations
    within his area are conducted in compliance with Virginia law and established company best
    practices. He routinely conducts training for company personnel and Erie agents on fraud
    awareness. Huddleston’s leadership skills are also vital to the VA IASIU where he serves on
    the Board of Directors as vice president. He is active in the Southwest Virginia Fraud Group
    and is a faculty member of the Red Flag training.
  • Special Agent Steve Pruitt was promoted to the VSP Insurance Fraud Unit in July, 2010.
    He has actively investigated insurance fraud in the Hampton Roads area since then, and his
    determined work ethic and investigative skills have made him an effective fraud fighter.
    Pruitt was assigned to work on an extremely complex criminal investigation involving 41
    fraudulent insurance claims submitted to Aflac Insurance. The suspects submitted
    fraudulent insurance claims for chemotherapy and related treatments, as well as for mileage
    to and from two separate physicians’ offices, which resulted in their fraudulently receiving
    $124,775 from Aflac. As a result, he and Special Agent Russell L. Eley III got a confession
    from the primary suspect. Subsequently, 62 felony warrants were obtained and served on
    the subject in Greensville County. They included 41 charges for Obtaining Money by False
    Pretense and 21 charges for forgery of the physicians’ names. Outside of these arrests,
    Pruitt has made 22 additional felony arrests related to other insurance fraud cases and
    various crime scene cases he has opened since joining the Unit. In total, he has opened 28
    cases since his arrival. Special Agent Pruitt possesses an enthusiastic attitude toward
    combating insurance fraud in the Hampton Roads area. He maintains professional working
    relationships with local, state and federal agencies, as well as the insurance companies and
    other agencies with which VSP has a mutual interest.
  • Stephen Royalty, senior assistant commonwealth’s attorney for Hanover County, Va., is
    well known in the fraud fighters’ community. Within his specific role, he has prosecuted
    insurance fraud, is a key contributor to the Red Flag steering committee and faculty, has
    twice presented to the VA IASIU. He served as assistant commonwealth’s attorney for
    Danville, Va., and in 2002 he joined the Hanover County commonwealth attorney’s office.
    Prior to that, Royalty was a civil trial lawyer handling personal injury claims. His
    understanding of the insurer perspective comes from working on these types of cases as
    well as first-party suits and declaratory judgment issues. His extensive overall
    understanding of insurance fraud issues has extended into the successful prosecution of
    insurance fraud in Hanover County. He is the lead prosecutor for white collar financial
    crimes and insurance fraud. A highlight was the successful handling of a case of attempted
    fraud, a very difficult endeavor when money hasn’t changed hands, leading to indictment,
    trial and conviction. This case was used in the development of Red Flag’s curriculum.
    Royalty has graciously lent his time and talent to the Red Flag school, serving as both a
    faculty member and presenter. As a member of the VA IASIU, and the Virginia State Bar,
    Royalty continues to encourage others to join the VA IASIU.

The Insurance Fraud Program of the Virginia State Police was established January 1, 1999, through
legislation approved by the General Assembly. The program’s mission is to address the growing
crime of insurance fraud in Virginia by conducting thorough professional insurance fraud
investigations; by providing insurance fraud training for law enforcement personnel; and by
increasing citizen awareness and cooperation through educational and tip-reward programs.