N.J. Fraud Prosecutor Issues 2003 Annual Report: Fraud Prosecutions Up 50 Percent

New Jersey Attorney General Peter Harvey, Director of Division of Criminal Justice Vaughn McKoy and Insurance Fraud Prosecutor Greta Gooden Brown presented the 2003 Annual Report of the New Jersey Office of the Insurance Fraud Prosecutor (OIFP) to Governor James E. McGreevey on Monday and the Legislature that shows a 50 percent increase over the previous year in the number of people charged with insurance fraud.

The report highlights the prosecutions, investigations and other activities the Office of Insurance Fraud has undertaken in 2003. In addition to the 50 percent increase in the number of those charged with insurance fraud, the office saw a 32 percent increase in the number of those convicted. Also, the Insurance Fraud Prosecutor’s criminal and civil cases resulted in the ordering of those committing insurance fraud to pay almost $16 million in restitution, criminal fines and civil penalties.

“This report, once again, demonstrates that we have achieved unprecedented levels of success in our efforts to detect, investigate, and take action against those who commit insurance fraud in our state,” said Governor McGreevey. “In New Jersey, we’re sending a powerful message to those who would engage in insurance fraud: Do it here, and you’ll be the one who pays.”

“This year’s Annual Report from the Insurance Fraud Prosecutor once again underscores that New Jersey’s insurance fraud reforms have had a real and measurable impact on those who attempt to commit insurance fraud in our State,” Harvey said. “This report clearly reflects that, by taking direct aim at those who try to bilk our insurance system, the Attorney General’s Office, the Division of Criminal Justice and the Office of the Insurance Fraud Prosecutor have achieved impressive results which have served as a model for other fraud fighting agencies throughout the United States.”

Harvey noted that the report reflects the successful results of several initiatives undertaken in 2003 to help contain automobile insurance rates, including:

the enactment of legislation which expanded the types of criminal conduct that trigger the automatic revocation or suspension of the licenses of health care professionals and others who commit insurance fraud;

the promulgation of regulations requiring insurers to produce counterfeit-proof automobile insurance identification cards in New Jersey;

the implementation of rules by the Department of Banking and Insurance penalizing dishonest drivers who lie on their insurance applications; and

the enactment of one of the toughest insurance fraud laws in the entire nation, which gave New Jersey’s fraud prosecutors unprecedented legal tools to prosecute and punish insurance criminals.

“I applaud the fortitude of the attorneys and investigators in the Office of the Insurance Fraud Prosecutor, who have made New Jersey a national leader in fraud prosecutions,” said McKoy. “We will continue our unwavering commitment to combating insurance fraud in all its forms.”

“As we complete our fifth full year of operation as New Jersey’s designated lead agency in the State’s war on insurance fraud, we are pleased with our record, our progress and our success. In 2003, we prosecuted more criminal cases than any other year in OIFP’s history. This should send a loud and clear message to those who would dare to commit insurance fraud in New Jersey,” said Brown. “We are also pleased to report that the New Jersey Office of the Insurance Fraud Prosecutor is now looked to by other states as a national leader in fighting every type of insurance fraud.”

Brown reported that the Office of the Insurance Fraud Prosecutor charged 337 defendants in 2003, compared with 225 the year before. Additionally, the Office of the Insurance Fraud Prosecutor convicted 204 defendants of insurance fraud related crimes in 2003, compared to 154 the year before. In total, 46 defendants convicted by OIFP were sentenced to 115 years in jail. In addition, OIFP obtained a total of 924 civil sanctions, consisting of consent orders, settlements and judgments, resulting in the imposition of almost $5 million in civil insurance fraud penalties under the Insurance Fraud Prevention Act.

The Annual Report also charts the progress of OIFP’s programs required under the Automobile Insurance Cost Reduction Act (AICRA) to support and coordinate the anti-fraud efforts of the insurance industry and law enforcement and other public agencies.

Those programs include the sponsoring of joint working groups with the insurance industry, the establishment of liaison and continuing communications with numerous governmental agencies within and outside of New Jersey, and the training and funding of insurance fraud professionals within County Prosecutors’ Offices throughout the State. In 2003, 19 of New Jersey’s 21 County Prosecutors received $3 million in financial assistance administered by OIFP, which enabled those offices to establish, maintain or expand insurance fraud units.

The Annual Report is posted on OIFP’s Web site at www.NJInsurancefraud.org