Examples of Insurance Fraud Investigations FY2008 ..THE OTHER SIDE OF THE STORY ! .A Great unknown expense for the Insurance Company`s ? How many options do you think the insurance companies have in getting their money back that is lost by fraud in the Billions yearly !
The following examples of insurance fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Former Auto Body Shop Owner Sentenced to 108 Months in Prison for Auto Insurance and Bank Fraud Schemes
On August 4, 2008, in Trenton, N.J., John V. Cotona, aka John Bruno, owner of a defunct Red Bank auto body shop, was sentenced to 108 months in prison for his leadership role of a million-dollar automobile insurance fraud, bank fraud and money laundering scheme. He was also ordered to pay $1.275 million in restitution and to serve five years of supervised release upon the completion of his prison term. On January 10, 2008, Cotona pleaded guilty to charges of conspiracy to commit mail fraud, conspiracy to launder money and bank fraud. At his plea hearing, Cotona stated that between January 2001 and June 2005, he operated Perfect Touch Auto Body in Red Bank. During this time period, Cotona conspired and agreed with others to submit false automobile property damage claims to various insurance companies. Cotona admitted that the false insurance claims included information that the subject vehicles suffered damage resulting from fictitious accidents. Cotona further admitted that, in addition to making claims for purported repairs, many of the cars involved in the fictitious accidents were actually owned by him and titled in the names of other people or various shell companies that he controlled. Cotona also admitted that he agreed to launder the proceeds of the scheme through bank accounts of the shell companies, which he controlled. In addition, Cotona admitted that from May through June 2005, he defrauded Commerce Bank of approximately $154,950 by depositing bad checks into accounts he controlled and then withdrawing the proceeds of the checks before the checks were returned for insufficient funds.
Three Texas Residents Sentenced in Insurance Fraud Scheme
On May 16, 2008, in Houston, Texas, three people were sentenced for their roles in a large insurance fraud scheme. Angela Armstrong was sentenced to 60 months imprisonment for conspiracy to commit mail fraud and mail fraud and 97 months for engaging in monetary transactions in criminally derived property. She was also ordered to pay $2.3 million in restitution. Debbie Rampiarie Ramcharan was convicted on the same charges and sentenced to 46 months imprisonment and ordered to pay $1.3 million in restitution. Daniel Hunger pleaded guilty to conspiracy to commit mail fraud and conspiracy to engage in monetary transactions in property derived from specified unlawful activity. She was sentenced to 12 months and one day in prison and ordered to pay $1.4 million in restitution. Armstrong, Ramcharan and Hunger filed false insurance claims for water damage to their property. They intentionally flooded properties with a water hose and allowed the water to stand for days. As a result, mold and mildew formed on the structure, which led to an increase in the amount of the claim. In addition, furniture and other household items were moved from a warehouse into the flooded property to embellish the contents claimed under the policy. A third claim under the policy was made for additional living expenses requiring the insurance company to pay for the insured’s living expenses while the intentionally flooded house was being repaired. In addition, Armstrong acted as an independent contractor in various other fraudulent claims and recruited family members to submit claims as well. Hunger also recruited others to file fraudulent claims and then worked as a construction contractor to rehabilitate some of the intentionally flooded properties.
Financial Planner Sentenced for Conspiracy in Offshore Insurance Tax Scam
On May 2, 2008, in Cincinnati, Ohio, Bruce M. Cohen was sentenced to 37 months in prison, followed by three years of supervised release, to perform 1,000 hours of community service, and ordered to pay a special assessment of $400. In May 2007, Cohen, of Louisville, Ky., pleaded guilty in a criminal case brought against the ex-owners and former in-house counsel of Buddy’s Carpets and their insurance agents. According to court documents, Cohen operated an insurance agency in Louisville called The Cohen Agency, as well as a marketing and consulting company called Creative Solutions Group. From 1996 to 2004, Cohen conspired with the principles, associates and clients of an insurance company in the U.S. Virgin Islands, called Caduceus Life and Security Trust, to sell sham “Loss of Income” insurance policies to U.S. taxpayers to aid them in committing tax evasion and other crimes. He and