TDI Crackdown Nets Seven in Alleged Houston Homeowner Fraud Case

An investigation by the Texas Department of Insurance (TDI), the Federal
Bureau of Investigation (FBI) and the U.S. Postal Inspection Service resulted in the arrest of seven Houston homeowners in connection with an alleged insurance fraud scheme.

According to the TDI, the homeowners intentionally flooded their homes and
filed claims that cost insurance companies about $5 million. The arrests were made following a federal grand jury’s indictments of the suspects.

Those arrested were Johnny Duane Staples, Janell Staples, Don Edward
Mitchell, Billy Bob Staples, Teresa Staples, Ramnath Ramcharan and Daniel E.
Terry, all of the Houston area. The defendants face charges of money laundering, mail fraud, conspiracy and monetary transactions with criminally derived property. If found guilty, the defendants could face up to 20 years in prison and substantial fines. The defendants allegedly recruited other homeowners whose flooded homes cost insurance companies approximately $5 million in fraudulent claims. More arrests are expected.

TDI investigators began their investigation into the insurance fraud scheme
in Feb. 2001. The defendants reportedly purchased two-story homes with full insurance coverage. The defendants were alleged to have intentionally used water hoses or damaged existing water lines inside the house to flood the interior. The water lines would be repaired before an adjuster arrived. The defendants would attempt to obtain the full policy limits of the insurance coverage along with additional living expenses. Some homes were flooded more than once, but insured with other companies.

The defendants allegedly served as homeowners, independent sub-contractors,
vendors and service providers in filing claims, repairing the damage and selling the homes to each other to repeat the process. Homes in the greater Houston area, Bay City and Austin were used in the insurance fraud scheme.
Twelve TDI Fraud Unit investigators participated in this case, which has become TDI’s largest crackdown on fraudulent insurance claim filing.

Topics Fraud Flood Homeowners