Ohio Reveals Top Insurance Fraud, Enforcements for 2010

Ohio Lieutenant Governor and Department of Insurance Director Mary Taylor has announced the agency’s top insurance fraud and enforcement cases of 2010.The DOI opened more than 160 consumer insurance fraud cases last year, referring 80 for prosecution, and handled more than 1,200 agent misconduct cases, taking administrative action in 250.

The Ohio Department of Insurance’s top statewide fraud and enforcement cases for 2010 include:

Fraud

#5: Springfield/Clark County/$3,000/Health Insurance Documents Forged for Prescription Medication

Peggy Cupps of Springfield pled guilty to one count of insurance fraud and one count of forgery for submitting false and forged documents to her healthcare insurer to obtain prescription medication. In June, Cupps was ordered to serve two years of community control and pay $3,000 in restitution.

#4: Dayton/Montgomery County/$15,000/Arsonist Tries to Fool Insurance Company, Gets Five-Year Sentence

In June, James Hodges, Dayton, was ordered to serve five years in prison for one count of arson and one count of insurance fraud. An investigation that revealed Hodges intentionally set fire to his home in order to receive $15,000 in insurance proceeds.

#3: Warren/Trumbull County/$38,000/Former Agent Caught Submitting False Claims to Insurance Company

Former insurance agent Dawn Hakeem of Warren was sentenced in August to five years of community control for submitting numerous false claims to an insurance company. She pled guilty to one count of insurance fraud and one count of grand theft. She was also ordered to pay $38,000 in restitution.

#2: Lima/Allen County/$100,000/Unlicensed Bail Bond Agent Steals $100,000 from Family

A DOI investigation revealed Darryl Ables, an Indiana bail bond agent, misled an Ohio family in Lima to believe he was able to post bonds in Ohio and stole $100,000 from them. In September, he was sentenced to four years in prison and four years of community control on one count of theft by deception. Ables also was ordered to make restitution to the victims.

#1: Perrysburg/Wood County/$900,000/Doctor and Accomplice Bill Insurers $900,000 for Services Never Rendered

An investigation revealed that Dr. Stacey Royal of Perrysburg billed insurance carriers in excess of $900,000 for inflated services or services that she, and the Royal Treatment Urgent Care, never provided. The investigation also confirmed Royal received more than $100,000 in payments as the result of her fraudulent billing practices. Royal was sentenced in October to a five-year probation sentence, ordered to pay nearly $235,000 in restitution to the insurance companies, and fined $10,000. In November, accomplice Christopher Davis was sentenced to six months in jail and one year of probation for his role in Royal’s scheme. He was ordered to pay more than $133,000 in restitution and $18,000 in investigatory costs.

Enforcement

#5: Circleville/Pickaway County/Falsifying Life Insurance Applications Nets Agent Three Years

In January 2010, Marcus Magill of Circleville agreed to permanently surrender his insurance license after a DOI investigation revealed he submitted several bogus coverage applications to Western and Southern Life Insurance Co. to receive advanced commissions from the insurer. Magill later pled guilty to one count of forgery and was sentenced in September to three years of community control and ordered to pay a $500 fine.

#4: Cleveland/Cuyahoga County/$542,000/Agent Son Makes 71 Unauthorized Withdrawals from Mother’s Annuity Totaling Nearly $542,000

In June, Stuart Liberman of Cleveland agreed to permanently surrender his insurance license after it was revealed that he took 71 unauthorized withdrawals, totaling $541,944 from his mother’s annuity with Pacific Life Insurance Company. The withdrawals were taken without his mother’s permission and Liberman used the funds for his personal use.

#3: Medina/Medina County/$685,000/Fugitive Agent’s $685,000 Annuities Heist from Nine Clients Lands Seven-Year Prison Sentence

A DOI investigation found that Damon Bryan of Medina took $685,000 in unauthorized loans from annuity policies belonging to nine of his clients. He was indicted in August 2009 then fled to Mexico. Bryan was apprehended by U.S. Marshalls and extradited from Arizona to Ohio in January 2010. In May 2010, he pled guilty to nine counts of felony theft, including theft from the elderly. Bryan was sentenced to seven years in prison and five years of probation.

#2: Cuyahoga Falls/Summit County/$1.5 Million/Company Fails to Pay $1.5 Million in Healthcare Claims

In November, Professional Benefits Administrators of Cuyahoga Falls, Ohio, agreed to permanently surrender its third party administrator insurance license. Benefits Administrators routinely collected funds from employer groups that were supposed to be used for the payment of health claims. The third party administrator comingled the funds collected from employers and then failed to pay more than $1.5 million dollars in health claims.

#1: Cleveland/Cuyahoga County/$9 Million/Agent Confuses Elderly Woman and Attempts to Fleece Insurance Company $9 Million in STOLI Scam

The department revoked the agent license of Alex Kozonashvili of Cleveland in March after an investigation revealed he participated in a Stranger Originated Life Insurance (STOLI) transaction, which are illegal in Ohio. In August 2008, Kozonashvili submitted an application for $9 million in life coverage to Prudential Insurance on behalf of a 74-year-old woman from Cleveland. Kozonashvili allegedly paid the consumer $8,000 for allowing him to take a life insurance policy out on her life. In addition to misrepresenting where the consumer lived, Kozonashvili stated the consumer had more than $12 million in assets. She actually lived on a fixed income of less than $1,000 per month.

Source: Ohio Department of Insurance

Topics Carriers Fraud Agencies Ohio