New Mexico Insurance Fraud Bureau

Transcription

1 New Mexico Insurance Fraud Bureau ANNUAL REPORT 2006 New Cases Open: Cases Closed: 149 Case Statistics Cases Active: 54 Case Highlights FOR IMMEDIATE RELEASE February 22, 2006 Joint Effort Results in Multi-count Indictment For Medicaid and Insurance Fraud Albuquerque Mental Health Service Provider Accused of Filing False Claims (Albuquerque, NM) Attorney General Patricia Madrid and Public Regulation Commission Superintendent of Insurance Eric Serna announced today that the Bernalillo County Grand Jury has indicted Valerie Potter, business manager of Albuquerque-based New Life Counseling on 118 counts of Medicaid Fraud and Insurance Fraud. This is the first jointly prosecuted case by the Attorney General s Medicaid Fraud Control Unit (MFCU) and the New Mexico Insurance Fraud Bureau (IFB). Attorney General Madrid said, I commend my Medicaid Fraud Division and the New Mexico Insurance Fraud Bureau for uncovering the alleged deception by Ms. Potter to obtain public Medicaid money. My Medicaid Fraud Division is the least-known Division in my Office, yet has possibly one of the most important jobs protecting New Mexicans who depend on Medicaid for their healthcare services. Superintendent Serna stated, I also commend our two agencies as well as all of the other cooperative agencies and private insurance companies for their tremendous efforts leading to this large count indictment. Health care fraud constitutes a major portion of insurance fraud. I hope this will send a powerful public message that New Mexico takes health care fraud seriously and will prosecute fully. With such collaborative efforts such as these, maybe some day, our health care costs will diminish. The three-year investigation was a combined effort of governmental agencies and private insurance companies in a health care fraud working group. The investigation was led by the MFCU with the IFB and FBI, joined by Blue Cross/Blue Shield, Molina (formerly Cimarron), Lovelace, and Presbyterian.

2 Charges allege that between November 2002 and December 2003, Potter submitted false claims by billing under the names of counselors who were no longer associated with New Life. The State contends that such billing violated state regulations governing licensed counselors, circumvented the credentialing process under Medicaid Salud and private insurance provider subcontracts and used licensed counselors names without their authorization. Potter also allegedly billed for services of unlicensed therapists or therapists who were not supervised in accordance with the requirements of state regulations. The 118-count indictment details the following charges: 62 counts of Making or Permitting False Claim for Reimbursement for Public Assistance Services or, alternatively, Presenting a False Claim for Medicaid Services or, alternatively, Falsification of Medicaid Documents (each 4 th degree felonies, subject to up to 2 years imprisonment and a $5,000 fine) 35 counts of False Insurance Application, Claim or Proof of Loss (each 4 th degree, subject to up to 2 years imprisonment and a $5,000 fine) 20 counts of Fraud less than $100 (each a petty misdemeanor, subject to up to 6 months imprisonment and a $100 fine) 1 count of Medicaid Fraud-Plan to Defraud (2 nd degree felony, subject to up to 12 years imprisonment and up to a $10,000 fine). Former Gallup Glass Repair Con Artist Gets 3 years in Prison for Insurance Fraud (Gallup, NM) A former Gallup Glass Repair Shop owner has been sentenced to the state penitentiary for the commission of insurance fraud. 11 th Judicial District Court Judge Robert Aragon on October 6, 2006 accepted Danny A. Martinez plea to 5 counts of insurance fraud and sentenced him to 3 years of prison. This concludes a joint investigation by Special Agent Andrew Herrera from the NM Insurance Fraud Bureau (IFB) and investigators from the Arizona Department of Insurance, Fraud Division and coordinated prosecution by the 11 th Judicial District Attorney s Office, IFB Prosecutor, Phyllis H. Bowman, and the Arizona Attorney General s Office. He will be serving his sentence concurrently with the sentence received in the Arizona criminal case. This conviction came out of a 15 count Grand Jury Indictment from the citizens of Gallup. As a glass repair owner, Martinez would obtain vehicle information and insurance policy information and then would send fake bills to insurance companies. Not only did owners not receive any glass repair, but claims were made on their policies and in some instances, 4-5 times. Policy holders from AAA, Dairyland, GEICO, Progressive, and State Farm Insurance companies were affected. Approximately, twenty thousand ($20,000) worth of restitution has been ordered in the NM case and approximately twelve thousand ($12,000) has been ordered in Arizona. He admitted to this scheme and targeting tribal members of the Hopi and Navajo reservations.

3 Former Albuquerque Real Estate Agent Gets 9 years in Prison for Embezzling Escrow Funds (Albuquerque, NM) A former Albuquerque real estate agent who pocketed escrow funds entrusted to him has been sentenced to the state penitentiary for embezzlement. District Court Judge Ross C. Sanchez on Feb. 22, sentenced Jack Burkett, owner of Belleflower Realty in Albuquerque, to nine years in the state pen after he plead guilty for Embezzlement of more than $20,000, a 2 nd degree felony. The conviction came out of a 61-count Grand Jury indictment, announced New Mexico Public Regulation Commission Superintendent of Insurance Eric Serna. As a real estate agent from , Burkett admitted to a scheme in which he acted as his own escrow agent during closing proceedings with First American Title Company. He kept money given to him as escrow agent that was meant to pay off old mortgage loans or utility liens. Burkett continued to pay monthly balances on old mortgage loans and would apply the next house sale proceeds to pay off existing balances. The scheme unraveled when he was unable to pay monthly payments, and sellers received notices of foreclosure. Once First American Title Company became aware of the problems, it immediately rectified all of the sales, paid over $1.1 million dollars, and reported it to the New Mexico PRC Insurance Fraud Bureau (IFB) as required by statute. Burkett was given numerous opportunities to prove that he could repay restitution, but he failed to do so. He also failed to disclose an IRS civil default judgment and injunction, and pending contempt motion, against him for failure to pay past employee, personal and business taxes. Although Burkett appealed to the court to allow him another opportunity to pay restitution, the Court said enough time had passed and the Defendant was remanded into custody immediately. This case took a long time to resolve because of its complexity, said Superintendent Serna. These types of complex cases take fortitude and patience. I am very proud of the investigation and prosecution of the IFB and am thankful for the assistance from the 2 nd Judicial DA s Office. Training Activities for Insurance Fraud Bureau Staff: Insurance Fraud Bureau staff attended law enforcement training courses and insurance fraud related seminars including: Southwest Symposium - Archeological Excavation and Fire Scene Investigation Membership to National Fire Protection Association IASIU 2006 CSI Texas Seminar Fireman Instructor Update National Insurance Crime Bureau Mega Special Investigator Academy District Attorney s Annual Spring Training Conference Digital Photography for Law Enforcement Auditing for Fraud NM Chapter International Association of Arson Investigators Seminar National Fraud Director s Conference (hosted by NM Insurance Fraud Bureau) District Attorney s Annual Training Conference New Mexico Law Enforcement Conference

4 For Immediate release: Friday, October 27, 2006 NMPRC Insurance Fraud Bureau Hosts National Insurance Fraud Directors Conference in Santa Fe Oct. 30-Nov. 1 Santa Fe The New Mexico Insurance Fraud Bureau, a bureau of the New Mexico Public Regulation Commission Insurance Division, is hosting the 2006 National Insurance Fraud Directors Conference in Santa Fe Oct. 30- Nov. 1. New Mexico Superintendent of Insurance Mr. Morris J. Chavez, and New Mexico Insurance Fraud Bureau Advisory Board Chairman and First Judicial District Attorney Mr. Henry Valdez will welcome conference participants who will be representing departments of insurance from several states. The New Mexico Public Regulation Commission Division of Insurance, and its Insurance Fraud Bureau are pleased to host this important national conference where the sharing of information and ideas by Insurance Fraud directors nationwide will benefit all participants, said Superintendent Chavez. Presentations scheduled include NM Insurance Fraud Bureau staff member Phyllis Bowman on organizing a health care anti-fraud working group; Wild West Evolution of New Mexico Law by Joel Jacobsen with the NM Attorney General s Office; Recognizing Depression in the Work Place by Dr. Pete Divasto; Federal Bureau of Investigation - Law Enforcement Executive Education Association by Chief Lanny Maddox; report on the National Association of Insurance Commissioners (NAIC) Anti-Fraud Activities by Steve Perry; and a report on the proposed merger of National Insurance Crime Bureau/International Association of Special Investigative Units/Coalition Against Insurance Fraud. Representatives from the various state insurance divisions will also make informal reports on their states insurance fraud activities. The NM IFB was established in 1999 as a bureau of the NM PRC Division of Insurance to investigate and prosecute criminal insurance fraud cases. The NM IFB is under the supervision of the Superintendent of Insurance, who serves under the New Mexico Public Regulation Commission.

5 Coordination Activities: New Mexico Insurance Fraud Bureau staff are active members of the New Mexico Chapter of the International Association of Special Investigation Units. The Organization meets bi-monthly and is dedicated to: Promoting a coordinated effort within the industry to combat insurance fraud; Providing education and training for insurance investigator; Developing greater awareness of the insurance fraud problem; Encouraging high professional standards of conduct among insurance investigators; supporting legislation that acts as a deterrent to the crime of insurance fraud. The New Mexico Insurance Fraud Bureau has established and presides over the bimonthly meeting of the League of Health Care Justice. The League membership is comprised of representatives of: Private/Commercial Health Care providers, Medicaid, Medicare, State Medical and Licensing Boards, Internal Revenue Service, Federal Bureau of Investigation, Human Services Department, New Mexico Attorney General s Office, New Mexico Taxation and Revenue Department, and The New Mexico Workers Compensation Administration. The League s mission is to improve the coordination of detection, investigation, prosecution and prevention of health care fraud in New Mexico.