N.J. Man Pleads Guilty to Insurance Fraud

Acting Attorney General Peter C. Harvey announced that an Essex County man pled guilty to insurance fraud charges and admitted his role in an organized scheme to illegally obtain police accident reports and to submit fraudulent insurance claims based on information contained in the police reports.

According to Vaughn L. McKoy, Acting Director, Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden Brown, Bernard Zeigler, 42, Prospect St., E. Orange, Essex County, pled guilty before Essex County Superior Court Judge Paul J. Vichness to charges of conspiracy and Health Care Claims Fraud (2nd degree) and theft by deception (3rd degree). A crime of the second degree carries a sentence of up to ten years in state prison and a fine of up to $150,000. A crime of the third degree carries a maximum penalty of up to five years in state prison and a fine of up to $15,000. Zeigler may also face civil insurance fraud fines pursuant to the Insurance Fraud Prevention Act. Zeigler is scheduled to appear before Judge Vichness on Sept. 8 for sentencing.

Insurance Fraud Prosecutor Brown noted that Zeigler was charged by the Division of Criminal Justice – Office of Insurance Fraud Prosecutor via a State Grand Jury indictment returned on March 31. At today’s guilty plea hearing, Zeigler admitted that he posed as an insurance claimant and that he submitted claims to Colonial Penn Insurance Company knowing the underlying automobile accident never happened and that the police accident report was phony. Colonial Penn Insurance Company paid approximately $15,000 to settle the “bodily injury” claim and more than $20,000 to 14 different medical providers for purported “treatment” rendered to Ziegler as a result of the purported accident. The investigation regarding the role of the medical providers and the “runners” who were employed by them is continuing. A “runner” is a person paid by a medical service provider to procure patients for the medical practice so that insurance claims can be submitted to enhance payment and profits.

As part of the Office of Insurance Fraud Prosecutor’s investigation into this case, a second indictment was returned on March 31 which charged Rajauhn Sharrieff, 51, Birks Place, Newark, Shirley Jenkins, 51, N. 18th St., E. Orange, and her son Abdul Jenkins, 32, also of N. 18th St., with conspiracy (2nd degree), bribery in official matters (2nd and 3rd degree), and Health Care Claims Fraud (2nd degree). The indictment alleged that from February through October, 1999, Sharrieff, Shirley Jenkins and Abdul Jenkins conspired to pay bribes to an East Orange police officer who was working in an undercover capacity for the Office of Insurance Fraud Prosecutor.

The undercover investigation focused on allegations that persons were acting as “runners” on behalf of medical service providers to obtain automobile accident police reports. The police reports were then reviewed and the persons identified in the reports were solicited to become patients of certain medical service providers and to file Personal Injury Protection (PIP) insurance claims. The defendants would allegedly receive a portion of any insurance settlement or payment. The indictment also alleged that the defendants negotiated and paid the undercover police officer several hundred dollars for a genuine E. Orange Police Department automobile accident report. And, it is alleged that Sharrieff solicited the undercover police officer to create a fictitious automobile accident report detailing a non-existent hit and run automobile accident that purportedly occurred on March 11, 1999 in which four persons who were passengers in Sharrieff’s car, including Ziegler, sustained injuries. As the result of the fictitious accident and fraudulent police report, the Colonial Penn Insurance Company paid Sharrieff more than $1,563 for “damage” to the automobile. The indictment is pending in court.

The investigation was coordinated by the Division of Criminal Justice – Office of Insurance Fraud Prosecutor which investigates and prosecutes civil and criminal insurance fraud cases. Supervising State Investigator Edward Buttimore, State Investigator Kristen Marcus, Civil Investigator James Rizio and Deputy Attorneys General Steven Farman and Andrew Fried were assigned to the investigation. DAG Farman represented the Division of Criminal Justice – Office of Insurance Fraud Prosecutor at the guilty plea hearing.

“These cases illustrate the serious potential for fraudulent insurance claims that runners pose to the insurance industry. In this case it is alleged that a runner would pay police officers for a genuine accident report so persons who might not otherwise file an insurance claim could be coerced to submit claims. Additionally, it is alleged that the runner then paid a police officer to create a totally fictitious accident report solely to support false insurance claims. This type of action seriously undermines the ability of insurance companies to provide service to legitimate customers,” said Insurance Fraud Prosecutor Brown.