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March 2005 State: Florida Area of Interest: Man Gets 3-Year Sentence for Selling Fake Insurance Cards A man who sold fake motor vehicle insurance cards to nearly 200 South Florida drivers has been sentenced to three years in prison, and more than a dozen of his customers are now facing charges that they knowingly presented the false insurance cards. Howard M. McKinon, 58, of 481 W. 30th St., pleaded guilty to nine counts of marketing a false or fraudulent motor vehicle insurance card and one count of organized scheme to defraud. The charges stem from an investigation by the Department of Financial Services, Division of Insurance Fraud. The Palm Beach County State Attorney’s Office prosecuted the charges. The sentence was handed down on Monday. It is a third-degree felony to create, market or present a false or fraudulent motor vehicle insurance card, punishable by up to five years in prison on each count. Source: State of Florida
I was pleased to hear today that the New York Attorney General and the New York Department of Insurance were able to create a fund for returning overcharges to clients of Marsh McLennan. However, I find it highly questionable whether $850 million is a sufficient amount of restitution when it has been alleged that Marsh McLennan may have overcharged its clients billions of dollars. In light of the allegations that have been made by the New York Attorney General’s Office, it is also very disappointing to learn that the New York authorities have let Marsh McLennan off the hook by not taking any disciplinary action against the company itself. My office is still in the middle of a major investigation into the practices of Marsh McLennan and its affiliated companies. It should be noted that the settlement with the New York authorities will in no way alter Georgia’s ongoing investigation and in no way affects any disciplinary action against Marsh McLennan that may or may not be warranted. In summary, we believe that the $850 million settlement with the New York authorities is a very good first step in making clients of Marsh McLennan whole. Source: State of Georgia
Area of Interest: Pennsylvania Insurance Department Reaches $85 Million Settlement Against the Directors and Officers of Former Reliance Insurance Company Pennsylvania Insurance Commissioner Diane Koken, in her role as statutory liquidator for Reliance Insurance Company, announced today that the Department has finalized the negotiation of an $85 million settlement with the former directors and officers of the Reliance Insurance Group. Of the $85 million settlement, $34 million will benefit the creditors of Reliance parent companies, Reliance Group Holdings Inc. and Reliance Financial Services Corporation. The remaining settlement proceeds of more than $51 million are being reserved for the benefit of Reliance’s policyholders. This $51 million, when combined with the $45 million previously recovered from Reliance’s parent companies, results in a recovery of nearly $100 million for Reliance’s policyholders from litigation brought by the Department. In addition to a substantial monetary recovery, the settlement provides non-economic benefits, which were negotiated by the Department for the benefit of Pennsylvania policyholders and to deter future misconduct by insurance company executives. These include agreements from defendants Saul P. Steinberg and Robert M. Steinberg not to serve as officers or directors, or to hold a controlling interest in any insurance company domiciled, licensed or conducting insurance business in the Commonwealth of Pennsylvania for the next 15 years. Other defendants have also confirmed that they do not have a controlling interest in any insurance company domiciled, licensed or carrying on insurance business in the Commonwealth of Pennsylvania. Source: State of Pennsylvania
Area of Interest: Jacksonsville Man Indicted In Employee Leasing Scam Florida’s Chief Financial Officer Tom Gallagher and United States Attorney Paul I. Perez announced today a 23-count indictment against the former owner and operator of a now-defunct professional employee organization that left thousands of workers in several states without workers compensation coverage despite collecting millions in premiums. Tom King, 41, of Jacksonville, allegedly collected $5.8 million in worker’s compensation coverage for illegal, fraudulent and unauthorized coverage. The indictment is the result of a lengthy investigation by the Department of Financial Services, Division of Insurance Fraud, and the Federal Bureau of Investigation. Assistant U.S. Attorney Mark B. Devereaux is prosecuting the charges. If convicted on all 23 counts, King faces up to 160 years in prison and a fine of $5.7 million. The indictment charges that Miralink, formerly headquartered in Jacksonville, represented to clients that the employees were covered by Regency Insurance of the West Indies, Ltd., located in Capistrano Beach, Calif. It is alleged that Regency was not authorized to sell insurance in Florida, that the coverage they sold was fraudulent, and that Miralink knew there was no real coverage. Source: State of Florida
Area of Interest: Nine New York Contractors Face $98,400 in OSHA Fines for Safety Hazards at Three Brooklyn Construction Sites Nine area contractors face a total of $98,400 in fines for 56 alleged serious and repeat violations of workplace safety standards at three Brooklyn construction projects: the Marcy Homes and Marcus Garvey Homes residential construction projects and the TPT Rehab project. The U.S. Occupational Safety and Health Administration (OSHA) fined the employers after inspections begun Nov. 29, 2004 in response to employee complaints of unsafe working conditions. Great American Construction Corp., Mt. Vernon, the general contractor for the three projects, was fined $25,350 for lack of fall protection and fall protection training; unsecured floor hole covers; uncleared debris; ladder and stairway hazards; various electrical hazards; improper storage of compressed gas cylinders; and failing to perform an engineering survey and to inspect the jobsite. S&L Magic Construction Corp., Glendale, was fined $33,600 for failing to train employees. Source: Occupational Health and Safety Administration
Area of Interest: “Operation Pay Me” Nets Two Southland Chiropractors and Law Office Administrator for Insurance Fraud On February 16,2005 Downey law office administrator, Rebecca M. Perez, 54, of Riverside, and two Downey chiropractors, Dr. Raymond T. Oca, 34, of Cypress, and Dr. Paul J. Lopez, 43, of Huntington Beach, surrendered themselves to the Los Angeles County Superior Court after being charged with more than 40 counts of Illegal referrals, insurance fraud, workers’ compensation insurance fraud, disability insurance fraud and attempted grand theft. The L.A. County District Attorney’s Workers’ Compensation Fraud Division is prosecuting the case. If convicted on all counts, Perez could face a maximum of five years in state prison. Likewise, Oca and Lopez each could face a maximum of three years in state prison. The case began in January 2002 when employees of Preferred Personnel reported to CDI that their Downey office was approached by Perez with a dubious proposal. Allegedly, Perez offered to pay Preferred Personnel staff $500-$600 for each workers’ compensation case referred to various chiropractors on a list supplied by Perez. Later that month, Perez offered the same deal to an undercover CDI investigator introduced to Perez as a Preferred Personnel employee who handled all workers’ compensation claims. Perez also provided the investigator with $500 “up front” for a future referral. Additionally, Perez told the investigator that she handled bodily Injury cases involving auto accidents and would pay $1,000 for each person the supposed employee referred to her. Over the next six months, CDI investigators posing as claimants were referred to Oca and Lopez, who then treated non-existent injuries. The chiropractors were allegedly aware that the “claimants” were concurrently working and receiving treatments. Furthermore, Oca and Lopez placed the undercover investigators on temporary total disability, even assisting with completing a state Employment Development Department “Claim for Disability Insurance Benefits” application. Had the undercover investigators been real claimants, this fraud would have been approximately $10,000. Source: State of California
Area of Interest: OSHA Forms Partnership With Pepperidge Farm, Inc.'s Downingtown Plant to Protect Workers from Ergonomic Injuries Workers involved in the bakery industry will be safer thanks to a new partnership announced today by the U.S. Labor Department's Occupational Safety and Health Administration (OSHA) and Pepperidge Farm at its Downingtown, Pa. plant. The primary goal of the three-year partnership is to further the cooperative relationship between OSHA and Pepperidge Farm to help reduce work-related injuries and illnesses associated with ergonomic risk factors. Other goals include: improving the ergonomic safety performance at Pepperidge Farm, Inc.'s Downingtown plant by four percent per year; fostering outreach and communication within the safety profession; and promoting a national dialogue addressing musculoskeletal injuries and illnesses. Source: Occupational Safety and Health Administration
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