Fraud News: Fake Auto Claims, Arson and Allstate Files RICO Suit

Henrietta Silva and her son, Peter, were sentenced recently in the San Diego Superior Court after submitting multiple fraudulent auto insurance claims.

Henrietta was sentenced to serve 270 days in jail stayed on the condition that she complete five days public work service, three years formal probation, and to pay $15,434 restitution to two victim insurers. Her son, Peter, was sentenced to serve 365 days in jail and three years formal probation.

The California Department of Insurance launched an investigation after receiving a referral from an insurance company after the Silvas submitted several auto insurance claims for identical damages.

Henrietta Silva surrendered in July 2016 and department detectives arrested Peter Silva later that month. Both pleaded guilty to one felony count of insurance fraud on November 9, 2016. This case was prosecuted by the San Diego County District Attorney’s Office.

Allstate Insurance Company is seeking to recover $1.1 million from a New York area medical doctor and his professional corporation in its third alleged insurance fraud lawsuit of 2017. The complaint, filed under the Racketeer Influenced and Corrupt Organizations Act (RICO) and principles of common law, alleges that the defendants engaged in a scheme in which fraudulent and misleading bills were submitted to Allstate for services and testing that were of no diagnostic value and were not rendered as billed. The case was filed in the Federal Eastern District of NY, docket number 17-CV-01599.

Among the allegations included in Allstate’s complaint are that Dr. Benjamin M. Chang, M.D., through Liberty Physical Medicine & Rehabilitation, P.C., submitted fraudulent and misleading invoices and medical records for electrodiagnostic testing to Allstate for reimbursement under New York State’s No-fault law. Since 2003, Allstate has filed 75 fraud lawsuits in New York State seeking more than $310 million in damages.

According to the Insurance Information Institute, No-Fault fraud is costing New Yorkers millions of dollars year-after-year. “In essence, honest hard working New Yorkers are paying a “fraud tax,” said Jaclyn Darrohn, Allstate New York spokesperson. “We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first.”

Allstate is joined by other insurers and many New York State leaders in its pursuit for comprehensive reform of the No-Fault system. “The No-Fault system is being exploited and responsible citizens are the victims,” Darrohn said. “Without the support of lawmakers, incidents of fraud will continue to increase. We need to work together this legislative session to fix the broken No-Fault system.”

A Florida man was charged with arson, insurance fraud and grand theft after he was accused of devising a plan to have his 2016 Toyota Camry stolen and destroyed so that he could collect an insurance payout, according to a recent announcement by Chief Financial Officer Jeff Atwater.

Michael Abrams concocted an an elaborate act of fraud, said CFO Atwater.

In early December 2016, Orange County Fire Rescue (OCFR) responded to a fire scene involving a vehicle that had reportedly been stolen in the state of New York. When OCFR requested the assistance of the Florida State Fire Marshal’s Office to determine the cause and origin of the fire, investigators began to unravel Abrams’ story.

During interviews with investigators, Abrams admitted to paying an unknown male $300 to take and destroy his car. After reporting it stolen, Abrams filed an insurance claim totaling $10,000. The plan to destroy the car by setting it on fire; however, was interrupted when the fire department was called to the scene of the crime.

Upon confessing to an active role in the burning of his car and the filing of an unlawful insurance claim, Michael Abrams was arrested and charged with several felonies. Abrams was booked into the Orange County Jail, bail was set at $50,000, and he faces 20 years in prison if convicted.