Ohio Department of Insurance Director Lee Covington released a list of the Top 10 Insurance Fraud violations for 2000. During 2000, the Department opened 144 fraud cases.
At the Insurance Department, the Enforcement Division and the Fraud Division are responsible for investigating insurance crimes. The Enforcement Division investigates allegations of misconduct by agents and investigates applicants for agent licenses. The Fraud Division’s mission is to detect, prevent, investigate and assist in the prosecution of consumer/provider insurance fraud. The division investigates complaints of persons suspected of fraudulently attempting to obtain insurance or to receive a benefit from an insurance company.
Below is Covington’s Top 10 list of Ohio insurance fraud cases for 2000.
1. Doctor and associates plead guilty to $8 million scheme
Gregory K. Knoderer, D.C., et al, Dayton, Ohio (Montgomery County), between Aug. 21, 1996 and Feb. 26, 1998, made and used false writings and documents in connection with delivery of and payment for health care benefits, items, and services to increase reimbursement from various insurance carriers. Dr. Knoderer, along with associates, Robert Powers and his wife, Tracy, both doctors of chiropractic, as well as John P. Moore, III, MD, entered guilty pleas to bills of information in U.S. Federal Court, Western Division of the Southern District in Dayton. Estimated loss to insurers is approximately $8 million. Rob and Tracy Powers were sentenced to two years probation, 100 hours of community service, and ordered to pay a Special Victims of Crime fine of $100 and restitution of $32,000. Sentencing is still pending against Moore and Knoderer.
2. Couple busted for writing and cashing fraudulent checks, sentenced to prison
Aaron Lett, Cleveland, Ohio (Cuyahoga County) was hired by the Insurance Overload Systems as a temporary claims processor and would work for various insurance companies processing claims. While Mr. Lett was settling claims, he would write checks to a fictitious person (Albert K. Herbert) and send the checks via U.S. mail to a rented post office box. Mr. Lett also wrote fraudulent checks to other persons and companies and also to his wife, Tomeeka, who in turn would endorse the checks. Mr. and Mrs. Lett were found guilty in U.S. District Court. Mr. Lett was sentenced to fifteen months in federal prison and ordered to pay restitution of $291,053 and additionally will have five years of supervised release probation. Mrs. Lett was sentenced to three months in federal prison, and ordered to pay restitution of $263,588 and will also have five years of supervised release probation. Their total restitution is $554,641.
3. Agent steals from escrow account, sentenced to 2 years
Kris O. Cooley, Westerville, Ohio (Franklin County), failed to keep insurance funds separate from agency funds and defalcated form the escrow account in the amount of approximately $400,000. He was convicted on a third degree felony charge of theft. He was sentenced to two years in prison and ordered to pay restitution in the amount of $411,431. His license was revoked as well as the license for his Ohio Land Title Agency, Inc.
4. Marks collects more than $400,000 in total disability payments while continuing to work
Mitchell Marks, Chagrin Falls, Ohio (Cuyahoga County) was drawing total disability since 1995 and was found to have been working the entire time during his disability period. He received $423,773.24 in disability payments. He pled guilty to one count of mail fraud and one count of theft of government property. Mr. Marks has paid some restitution.
5. Agent indicted for stealing consumer checks
Agent Larry C. Braun, Marysville, Ohio (Union County), was indicted on one count of theft and four counts of forgery. Braun has been accused of forging and cashing consumer checks owed to Ward Insurance Agency, Meridian Insurance Company and Westfield Insurance Company, and keeping the money for his personal use. He is accused of stealing approximately $20,000. Braun surrendered his Ohio license to sell insurance in 1998.
6. Noonan convicted of theft from elderly, an insurance-related theft
Agent David E. Noonan, Lorain, Ohio (Lorain County), was convicted of theft by deception, a third-degree felony in Richland County. The theft of $5,000 was insurance related. He was sentenced to pay $500 and restitution and serve four years probation. Noonan was indicted on four charges of theft from an elderly person in Lorain County. The thefts, totaling more than $7,500, are insurance related. Noonan is scheduled for a jury trial. Noonan’s insurance license has been revoked.
7. Claimant steals and burns her own vehicle
Nicole Dillow, (Scioto County) was recently found guilty of insurance fraud in the Scioto County Common Pleas Court. Dillow filed a claim alleging her auto was stolen and burned. The Insurance Department investigation proved that she was involved in the theft and eventual burning of the vehicle. She was sentenced to five years community control, 70 days in the Scioto County Jail, fined $300 plus court cost and ordered to pay restitution of $6,767.35 and another $1,211.20 in investigation fees to her insurance company. Dillow’s conviction was also reported to the State Nursing Board.
8. Hastings convicted of insurance-related theft
Agent Michael J. Hastings, Strongsville, Ohio (Cuyahoga County), was convicted of aggravated Grand Theft, a third degree felony. The theft was title-insurance related. Hasting was sentenced to pay $363,882 in restitution and serve five years probation. Hastings’ insurance license was revoked.
9. Zureich has license revoked
Richard S. Zureich, Cleveland (Cuyahoga County), received insurance premium payments from approximately 200 individuals at an average payment of $500 per policy. Many of these payments were received from a mortgage company on behalf of an individual. Zureich failed to obtain insurance or return premium payments. He would then issue a declaration of insurance page from a bogus company named Spectrum Insurance Company showing insurance coverage had been placed on an individual’s property. The insurance company listed on the declarations page (Spectrum) did not exist as an insurance company and no coverage was provided for the property. After receiving a claim for $99,000 when a deceived insured’s house burnt, Zureich prepared and mailed a back-dated insurance application to try to obtain coverage. Zureich’s insurance license has been revoked. A criminal investigation is ongoing.
10. Ritchey misrepresents insurance policy to gain $50,000 for investment
Steven A. Ritchey, Baltimore, Ohio (Fairfield County), knowingly misrepresented the terms and benefits of an insurance policy to convince a couple to obtain a loan for $50,000 against their existing life insurance policy to invest in an alleged business opportunity. Ritchey failed to disclose the effects of obtaining a loan against an existing life insurance policy. Notice of hearing has been issued.
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