Annual Report of

The New JerseyOffice of theInsurance FraudProsecutorfor Calendar Year 2006

Submitted March 1, 2007 (Pursuant to N.J.S.A. 17:33A-24d)

Prepared by:OFFICE OF THE ATTORNEY GENERALDepartment of Law & Public Safety

DIVISION OF CRIMINAL JUSTICEOFFICE OF THE INSURANCE FRAUD PROSECUTORP.O. Box 094 • Trenton, NJ • 08625-0094609.896.8888 • www.njinsurancefraud.org

Stuart Rabner, Attorney GeneralGreta Gooden Brown, Insurance Fraud Prosecutor

Annual Report StaffEditorGreta Gooden BrownInsurance Fraud ProsecutorCo-EditorJohn J. SmithFirst Assistant Insurance Fraud ProsecutorCo-Editor/Copy EditorJoan EnrightAdministrative AnalystFeature WritersFrank P. Brennan, Esq.John ButchkoSpecial Assistant

John GradyDeputy Attorney General, DOLWilliam HoymanDeputy Attorney GeneralJohn KennedyAssistant Attorney General

Lewis KorngutSupervising Deputy Attorney GeneralJohn KrayniakAssistant Attorney GeneralScott PattersonSupervising Deputy Attorney General

Ray ShafferAdministrative LiaisonJohn J. SmithAssistant Attorney GeneralSherry L. WilsonDeputy Attorney General

ContributorsMichelle ApgarSupervising Civil Investigator

Paula CarterSupervising AnalystNorma EvansSupervising Deputy Attorney GeneralJennifer FradelDeputy Attorney General, DOL

Charles JanousekSpecial AssistantPat MillerAdministrative AssistantPhotographersCarlton Cooper, Civil InvestigatorSusan Cedar, Administrative AssistantProductionPaul Kraml, Art DirectorEnrique Pinas, Graphic DesignerSina Adl, Graphic DesignerAdministrative and Technical SupportSusan Cedar, Administrative AssistantCynthia Ronan, Administrative AssistantGina Lemanowicz, Civil Investigator

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Table of Contents

About the Cover

The cover of the 2006 Annual Report of the Office of the Insurance FraudProsecutor (OIFP) features “Dancing Susan.”

Susan represents that category of insurance fraud cheat who claims that she isdisabled and unable to perform the duties of her occupation or of her daily life, butstill is able to “live it up” on the money obtained from phony insurance disabilityclaims. Cases prosecuted by OIFP demonstrate that insurance cheats who submitphony disability claims include licensed professionals such as doctors, lawyers,podiatrists, State employees, as well as persons from many other walks of life.

Phony disability insurance claims can take the form of false submissions toworkers’ compensation insurance plans, to Social Security disability, and to otherinsurance companies to replace lost wages, lost income from a professional businessor practice, or to pay off loans and other debts that the claimant claims he can nolonger pay because he is purportedly “disabled.” If a person elects to engage inphony disability insurance fraud, he or she can be criminally prosecuted and sent tojail. A person can also be sued for a civil insurance fraud violation and ordered topay civil penalties and restitution. If the person is a professional licensee, he or shemay also suffer loss of his or her professional license.

A description of these cases can be found on page 12 of the 2006 AnnualReport, and on pages 92 to 93, 110, 113, and 115.

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Table ofContents

Message from the Insurance Fraud Prosecutor:“Where Do We Go From Here?”.................... 4

OIFP Table of Organization ......................... 88

OIFP Year in Review: OIFP Maintains SteadyGains in Criminal and Civil Sanctions ........... 1010

2006 Licensing Sanctions Imposedon Insurance Professionals by DOBI ......... 2121

2006 Sanctions Imposed on LicensedProfessionals by Professional Boards ........ 2121

OIFP Criminal Investigationsand Prosecutions Statistics ..................... 22222222

OIFP Civil Investigationsand Litigation Statistics ......................... 22222222

OIFP Criminal and Civil MonetarySanctions and Restitution Summary2001-2006 ........................................ 23232323

OIFP Criminal ChargesSummary 2001-2006 ........................... 23232323

Criminal Cases Investigated in 2006by Fraud or Provider Type ...................... 2424

OIFP and County Prosecutors’ OfficesTotal Defendants Sentencedto Jail 2002-2006 ............................... 25252525

New Jersey Observes First AnnualInsurance Fraud Awareness Month .......... 2626

OIFP Funds County Prosecutors’Insurance Fraud Fighting Efforts .............. 3030

County Prosecutors’ Offices Case Notes ... 32323232

OIFP Budget for FY2006 ...................... 3838

OIFP Expenditure Report for FY2006 ....... 3939

OIFP Scores Supreme Court Victory .............. 4040

The Growing Problem of Rate Evasion .......... 4444

NJ Insurance Industry’s Perspective onAmbulatory Surgical Centers ...................... 48484848

NJ Legislature Takes Aim at Fraud andAbuse in the Medicaid Program .................. 5252

Closing the Loopholes on Insurance Fraud:OIFP’s 2006 Recommendation for LegislativeReform... Extending Immunity for AntiFraudInformation Sharing .................................. 5858

Insurance Fraud Prosecutor Case Notes ......... 6666

Case Index ......................................... 6868

OIFP Criminal Case Notes .................... 7070

Putting the Brakes onUnscrupulous Insurance Licensees ........... 9999

Protecting the Elderly Population ........... 6106

OIFP Civil Case Notes ....................... 88108108

DOL Civil Litigation Case Notes ........... 2112

Professional Licensing Proceedings ........ 44114114

OIFP/Government/Industry Contacts .......... 6116

County Prosecutor Contacts ...................... 7117

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A Message from the Insurance Fraud Prosecutor

4

A Message from the Insurance Fraud Prosecutor

In 2006, OIFP prosecuted individuals and entities for committing auto, medical, dis-ability, property, and Medicaid fraud in hundreds of cases, some of which bear highlight-ing. For example, OIFP dismantled several large-scale auto theft rings, some of whichoperated out of car dealerships and solicited, among other things, owner initiated falseauto theft claims or “give ups.” These cases also involved the illegal duplication of igni-tion keys through fraudulent locksmithing, the involvement of employees working atthe car dealerships, and the fencing of stolen cars across the country on the internetthrough eBay. OIFP’s prosecution recovered over 150 stolen high-end vehicles from thetri-state area valued at over $3 million.

OIFP also prosecuted a racketeering case involving two lawyers, their law firm, sev-eral “runners,” and approximately 28 phony claimants, all of whom were allegedly en-gaged in a scheme to submit phony automobile accident insurance claims in excess of$5 million, as part of a corrupt personal injury legal practice. Additionally, the owner ofa body shop, two police officers, and seven others were indicted for allegedly stagingaccidents to obtain over $100,000 in fraudulent auto damage claims, and a licensed chi-ropractor was convicted by OIFP, along with seven others, for staging accidents in orderto submit phony Personal Injury Protection (PIP) claims to five insurance carriers forover 300 bogus chiropractic treatments.

In a sophisticated life insurance fraud scheme, OIFP prosecuted a woman who pledguilty to falsifying nine life insurance claims valued at over $1 million by providing falsedeath certificates purporting to establish her own death and posing as her daughter, whowas the designated beneficiary on the policies, in order to collect the proceeds. She col-lected over $700,000 on the false claims before her scheme was detected by the defraudedcarriers. An insurance agent was also charged by OIFP and pled guilty in 2006 to falsifyinginsurance policy applications in order to collect a quarter of a million dollars in up-frontlife insurance sales commissions. In another life insurance scam, OIFP charged an indi-vidual for falsifying a life insurance application in order to obtain $1 million in life insur-ance benefits on the life of his brother who had perished in the September 11 attack onthe World Trade Center.

OIFP also convicted a Board Certified plastic surgeon who defrauded four insurancecompanies out of approximately $1 million by claiming that he was totally disabled andunable to practice plastic surgery when, in fact, he performed dozens of surgical proce-dures. On the eve of trial, the surgeon entered a guilty plea and was sentenced to prisonfor three years. Following an 11-week-long jury trial, OIFP obtained a conviction of abusinessman who had been indicted in connection with his submission of fraudulentinsurance claims totaling almost $400,000 arising out of an arson fire at his commercialproperty. The defendant was convicted of conspiracy, attempted theft by deception, andwitness tampering. The jury found that the defendant had, among other things, padded hiscontents claim by alleging that articles inside his premises had been damaged by the firewhen, in fact, no such articles had been in the premises at the time of the fire. The defen-dant was sentenced to 11 years in state prison and is appealing his conviction.

In another OIFP trial victory, a Camden police officer was convicted for conspiracy,official misconduct, bribery, and Criminal Use of Runners for his role in selling policeaccident reports to a retired Camden police officer so that “runners” could illegally solicitindividuals listed in the reports for treatment at a chiropractic facility with which he wasaffiliated. He was sentenced to four years in state prison. In yet another 2006 trial victory,the manager of a pharmacy, the pharmacy technician, and the pharmacy itself were con-victed for billing the Medicaid program for prescription medications that were never dis-pensed and providing illegal kickbacks to Medicaid beneficiaries. The kickback scheme tar-geted HIV/AIDS patients and induced them to sell their AIDS medications back to thepharmacy. The individual defendants were sentenced to five years and six and one-halfyears in state prison, respectively.

6

In vouching for OIFP’s sustained

success, the most recent report of

the Coalition Against Insurance

Fraud, a Washington based public

policy and advocacy organization

for consumer groups and profes-

sionals in the public and private

sectors, once again ranks OIFP as

a national leader in fighting

insurance fraud.

Equally noteworthy are OIFP’s 2006 accomplishments in its civil enforcement efforts.OIFP scored a monumental victory in a New Jersey Supreme Court decision that reversedthe lower courts and held that the burden of proof in civil insurance fraud actions is thepreponderance of the evidence standard, rather than the higher clear and convincing stan-dard urged by our adversaries. In 2006, OIFP also imposed civil fines on a doctor and hisoffice manager in the amount of $4.5 million for, among other things, operating an unli-censed MRI facility for approximately ten years. In another case, OIFP fined an MRI facil-ity $1 million for operating without a license for two years.

In vouching for OIFP’s sustained success, the most recent report of the CoalitionAgainst Insurance Fraud, a Washington based public policy and advocacy organizationfor consumer groups and professionals in the public and private sectors, once again ranksOIFP as a national leader in fighting insurance fraud. According to the Coalition report,out of 47 state fraud bureaus, OIFP ranked fourth in the number of fraud convictions,second in the amount of restitution, and first in the number of civil sanctions. TheCoalition’s report also revealed that while OIFP received the fifth largest number of refer-rals, OIFP opened more cases than any other state.

These results represent the culmination of OIFP’s successful partnerships with theinsurance industry and County Prosecutors’ Offices throughout the State. This 2006 An-nual Report, like the seven reports that preceded it, gives testament to the close coopera-tion and collaboration which form the bedrock of OIFP’s partnerships. Our collectiveeight years of experience teaches that to answer the question “where do we go fromhere,” we must acknowledge that fraud schemes are far more complex and sophisticatedthan they have been in the past. Fraud fighters must now target licensed medical serviceproviders who manipulate federal and State regulations, as well as diagnostic and proce-dure codes, in ever more sophisticated ways in order to exploit and defraud our insurancesystem. Simultaneously, fraud fighters must also target more clever and deviousfraudsters from every profession and walk of life, including both career criminals andopportunistic swindlers.

Whereas in the past, we have had the luxury of focusing on single incident theft cases,OIFP and its partners must now focus our shrinking resources on complex organizedtheft schemes that systematically and repeatedly loot large sums of insurance dollars.These are the types of cases that will have the greatest impact in combating insurancefraud in New Jersey, will aid in eliminating fraud costs from the insurance marketplace,and will restore tax dollars to our government sponsored health programs. However, bychoosing to follow this path, we must also adopt new benchmarks for success. Indeed,focusing on “impact” cases means foregoing the numerical measures of success that wehave come to expect.

Therefore, OIFP, with the help of our allies, will build on our eight-year record ofsuccess, including the exceptional results obtained in 2006, to target the most complexand highest impact cases which threaten the insurance industry and the insurance purchas-ing public in New Jersey. While this focus may result in fewer overall cases being pros-ecuted in the future, the quality of the prosecutions which are brought, as measured bythe impact those prosecutions have on deterring the most egregious insurance fraudcheats, will inure to the benefit of New Jersey citizens and businesses and will serve totake OIFP and its partners to the next level. I am honored to be a part of this effort andI am grateful for the continued support of our allies in the insurance industry, law en-forcement, and other government agencies as we set our sights onward and upward.

Respectfully submitted,

Greta Gooden BrownNew Jersey Insurance Fraud Prosecutor

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OIFP, with the help of our allies, will

build on our eight-year record of

success, including the exceptional

results obtained in 2006, to target the

most complex and highest impact

cases which threaten the insurance

industry and the insurance purchas-

ing public in New Jersey.

9

The Year in Review: OIFP Maintains Steady Gains in Criminal and Civil Sanctions

First Assistant ProsecutorJohn J. Smith reviews prosecution recommendations.

are initially borne by health care insurers andHMOs, they are ultimately passed on to thehealth care consumer in the forms ofincreased premiums and deductibles, andmay also result in a reduction in the numberof eligible insureds and a narrowing of thescope of coverage provided under healthinsurance policies.

Health care claims fraud can becommitted by health care practitioners,such as doctors, chiropractors, and dentists;by those providing health care relatedservices, such as invalid transportation andmedical billing businesses; or by patientsthemselves. Health care claims fraud iscommitted when a business or individualmakes a misrepresentation in the course ofsubmitting a claim for benefits under ahealth insurance policy. N.J.S.A. 2C:21-4.2.A patient may commit health care claimsfraud, for example, by submitting a claimfor treatment expenses for feigned injuries,or by submitting altered medical receiptsfor reimbursement of legitimate claims. Aphysician may commit health care claimsfraud by knowingly submitting a bill forservices that were either unnecessary or notrendered at all. Several examples of healthcare claims fraud cases prosecuted by OIFPare reported in OIFP’s criminal case notes.

OIFP’s Health and Life Section alsoprosecutes disability and life insurance

fraud. Disability fraud occurs when anindividual misrepresents the disablingcondition or the employment status of theindividual in order to obtain benefitsunder a disability insurance policy. Thedisability policies involved in these cases aresometimes purchased by licensed profes-sionals and provide substantial disabilitybenefits. Life insurance fraud can take theform of misrepresentations submitted inconnection with a claim for the proceeds ofa life insurance policy. These types of casesmay or may not include the actual death ofthe insured. Actual case examples of bothtypes of fraud are included in OIFP’scriminal case notes.

Auto SectionHealth care claims fraud in New Jersey

frequently overlaps with automobileinsurance claims fraud because automo-bile insurance policies in New Jerseyprovide medical benefits for those injuredin vehicular accidents as part of PersonalInjury Protection (PIP) coverage. Since theextent of medical treatment is usuallyconsidered in evaluating the seriousnessof a claimant’s injuries, unscrupulousclaimants have an incentive to seek moretreatment than necessary to enhance theirprospects for an inflated monetaryinsurance settlement. Likewise, unscrupu-lous providers have incentive to provide

those treatments. Cases involving medicalservice providers committing PIPinsurance fraud are routinely assigned tothe Auto Section.

Uninjured occupants of vehiclesinvolved in collisions are sometimescontacted by “runners” and encouraged topursue claims for purported “soft tissue”injuries, such as back sprains, also knownas “whiplash.” Such soft tissue injuries arefrequently claimed because they often arenot verifiable by the use of commondiagnostic visualization techniques such asx-rays and Magnetic Resonance Imaging(MRI). Instead, proof that a claimant hassustained soft tissue injuries is usuallydependent upon subjective factors, suchas “limitation of motion” and theclaimant’s subjective complaints, whichcan be easily fabricated by unscrupulousclaimants seeking to exploit the system.These are among the most difficult andcomplex cases investigated and prosecutedby OIFP’s Auto Section.

“Runners” typically receive an illegal feeor commission for recruiting potentialclaimants and referring them to unscrupu-lous medical providers and/or attorneyswho, in turn, benefit by providingunnecessary medical services or pursuingunwarranted claims for monetary damages.See N.J.S.A 2C:21-22.1. Some “runners”resort to planning and staging autoaccidents to insure a steady flow of phonyinjury claimants. Staged accidents typicallyinvolve one of several common scenarios,such as the passing of an unsuspectingmotorist and abruptly stopping, therebycausing a “rear ender” in which theinnocent driver appears to be at fault.Another common scenario involvesencouraging an unsuspecting motorist toproceed through a stop sign, or from aparking space, and quickly accelerating tocause a crash, again making it appear thatthe unsuspecting motorist is at fault.

In other cases, a “runner” or conspira-tor may claim to have been in an accidentwhere there was no collision at all, such aswhere a previously damaged vehicle isplaced at a public location and it is falselyreported that the vehicle and its occupantswere the victims of a crash with a phantom

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The Year in Review: OIFP Maintains Steady Gains in Criminal and Civil Sanctions

(NJSIA), the Insurance Industry Liaisonhas also been instrumental in organizingand promoting the two-day AnnualNJSIA Conference, which has served overthe years to offer valuable training andnetworking opportunities for insurancefraud professionals from both the publicand private sectors. The Annual NJSIAConference is the most highly attendedconference of its kind in the United Statesand provides some of the most valuableeducational and training opportunitiesavailable today for insurance fraudprofessionals.

The OIFP Insurance Industry Liaisonalso played a prominent role in theplanning and organization of the AnnualInsurance Fraud Summit sponsoredjointly by NJSIA and the InsuranceCouncil of New Jersey (ICNJ). At theOctober 5, 2006, Summit, executives fromthe insurance industry, as well as seniorlevel staff from the Attorney General’sOffice, DOBI, and OIFP, presented over200 attendees with information aboutOIFP’s cases, programs, and initiatives, aswell as new fraud trends and schemes.

In addition, during 2006, OIFP’sInsurance Industry Liaison hosted orparticipated in numerous meetings withvarious industry and trade groupsdedicated to combating insurance fraud.These meetings included ongoingworking group meetings with industryprofessionals focusing on areas of sharedconcern, such as workers’ compensationpremium insurance fraud.

The Insurance Industry Liaison isalso responsible for referring and trackinginsurance fraud related matters involvingbusinesses and individuals licensed byDOBI. The Insurance Industry Liaisonserves as OIFP’s primary contact personfor DOBI. In this capacity, the InsuranceIndustry Liaison served as a key memberin the periodic meetings of the DOBI/OIFP Interface Group. Those meetingswere attended by representatives ofDOBI’s Enforcement Division, whichoversees the tracking and coordinationof case dispositions involving licensedproducers, public adjusters, and realestate agents.

Professional andOccupational Boards

Committing civil or criminal insurancefraud can result in professional licensesuspension, revocation, or other disciplin-ary actions. Coordination is necessary toensure that professional licensing boardswithin the Division of Consumer Affairs,Department of Law and Public Safety, arealerted promptly when a licensee is thesubject of an OIFP investigation.Responsibility for coordinating OIFP’sactivities with those of the professionaland occupational boards is assigned toOIFP’s Professional Boards Liaison who,prior to joining OIFP in 1998, served asan Executive Director of the New JerseyState Medical Board. Procedures imple-mented by the Professional BoardsLiaison provide for prompt notificationto the professional licensing boards byOIFP when licensees are the subject ofOIFP investigations. These proceduresalso provide for reciprocal notification ofOIFP by the professional licensing boardsso that OIFP can initiate a civil or criminalinvestigation, as warranted.

The specific duties of the ProfessionalBoards Liaison involve, among otherthings, the maintenance of a comprehen-sive database of insurance fraud com-plaints involving professional licensees,including information as to the nature ofsuch allegations, the source of the referral,and the status of the matter within theDivision of Consumer Affairs’ Enforce-ment Bureau and OIFP. To provide forthe periodic review and discussion oflicensees under suspicion for insurancefraud, the Professional Boards Liaisonalso established and chairs the Liaison andContinuing Communications Group. Thegroup is comprised of intermediate andupper level OIFP supervisory investiga-tive and legal staff and representatives ofthe Division of Consumer Affairs’Enforcement Bureau. The group meetsbi-monthly to track the status andprogress of active cases of professionallicensees under investigation by eitheragency. Maintaining the database andconvening the monthly meetings facilitatethe ongoing exchange of informationnecessary for the detection and investiga-

deal with the challenges presented by thesubtleties and complexities of insurancefraud. To address the need for insurancefraud training in the local law enforce-ment community, and to enlist theparticipation of local law enforcementagencies in the battle against insurancefraud, the OIFP Law EnforcementLiaison has coordinated periodic fraudtraining programs for law enforcementpersonnel throughout the State.

In 2006, the Law EnforcementLiaison also conducted periodic regionalcoordination meetings of municipal,county, and federal law enforcementofficials. These meetings afford theattendees the opportunity to meetcounterparts in other participatingagencies, to establish ongoing channelsof communication with one another,and to share information and resources,as appropriate. OIFP’s regional coordina-tion meetings have also featured speakerson insurance fraud related topics, such asorganized insurance crime rings, sophis-ticated identity theft scams, and forensicinvestigative techniques.

Insurance IndustrySuccess in the battle against insurance

fraud also hinges upon a cooperative andmutually supportive partnership betweenlaw enforcement and the private insur-ance industry. OIFP’s Insurance IndustryLiaison is primarily responsible formaintaining OIFP’s close workingrelationship with private industry. Inaddition, the Insurance Industry Liaisonis assigned to coordinate OIFP activitieswith the Department of Banking andInsurance (DOBI), the New JerseyMotor Vehicle Commission (MVC), andvarious industry trade groups. TheInsurance Industry Liaison’s activitieshave been instrumental in ensuring thecontinuing progress of anti-fraudprograms statewide.

As the primary point of contact, theInsurance Industry Liaison routinelyprovides advice, guidance, and technicalassistance to members of the insuranceindustry. As a charter member of the NewJersey Special Investigators Association

20

The Year in Review: OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts

Atlantic County Prosecutor’s OfficeState v. Miguel PachecoMiguel Pacheco was arrested on July 20,

2006, and charged with manufacturingand sale of false government documents.At the time of his arrest, a search warrantwas executed resulting in the seizure ofequipment allegedly utilized in themanufacture of counterfeit documents.On December 21, 2006, Pacheco pledguilty to an indictment that charged himwith sale of false government documents.

The Insurance Fraud Unit, with theassistance of the Hammonton PoliceDepartment, NJ Motor Vehicle Commis-sion Security Investigation Unit, USDepartment of Labor, and the FBI,conducted a six-month undercoverinvestigation, which resulted in the purchaseof alleged counterfeit documents, includingvehicle registrations, vehicle insuranceidentification cards, and Social Security cards.Pacheco will be sentenced in 2007.

State v. Blanca BuriticaOn June 2, 2006, Blanca Buritica was

sentenced to three years probation followingher guilty plea to an indictment that chargedher with knowingly exhibiting a documentthat falsely purported to be issued by agovernment agency and possession of afalse government document.

The Atlantic County Prosecutor’s OfficeInsurance Fraud Unit initiated an investiga-tion after receiving information that apatient of a local doctor had been receivingmedical insurance benefits for several yearsunder an assumed name. The investigationrevealed that Buritica was in the UnitedStates illegally. While here, she obtained afictitious Social Security card and eventuallyobtained a New Jersey identification cardunder her assumed name. Buritica thenused the counterfeit documents to obtainemployment in an Atlantic City casinowhere she then received health insurancebenefits through a union that covers casinoworkers.

Between March 2001 and September2005, Blanca Buritica, using an assumedname and counterfeit identification,allegedly submitted 28 claims for medical

treatment through Horizon Healthcaretotaling in excess of $1,000. Additionally,Buritica allegedly filled 24 prescriptionsthrough the Enbrel Enrollment Program.

Bergen County Prosecutor’s OfficeState v. Catherine Xerri, et al.On May 12, 2006, Catherine Xerri was

sentenced to four years state prison forconspiracy to commit Insurance Fraudand eight years state prison for attemptedmurder. Xerri purchased a 2004 DodgeRam and fraudulently reported on amotor vehicle insurance application thatshe was the primary operator of thevehicle and that it would be parked at herresidence in Westwood.

Franklin Baez, who allegedly utilizedthe vehicle for his construction business,was allegedly the sole driver of the vehicleand kept it parked at his residence inHackensack. Xerri failed to disclose thisinformation on her insurance application.It is alleged that Baez’ driving privilegeswere suspended at the time, resulting inhis ineligibility to obtain a motor vehicleinsurance policy in his name. As a resultof this investigation, Baez was chargedwith Insurance Fraud and conspiracy tocommit Insurance Fraud.

Subsequent to this investigation, Xerriand Baez were arrested and charged withattempted murder. Baez remains in countyjail pending disposition of the matters.

State v. Thomas Iwanicki, et al.On October 20, 2006, Thomas Iwanicki

was arrested and charged with InsuranceFraud. Iwanicki filed a report with theHoboken Police Department claiming thathis 2001 Mercedes-Benz SL500 had beenstolen in Hoboken. He also filed a claim inexcess of $25,000 with Allstate InsuranceCompany for the loss of the vehicle.Subsequently, the vehicle was discoveredpartially burned in Englewood. A forensicexamination conducted on behalf of theinsurance company concluded that the carhad not been stolen and that the fire wascaused by a flammable liquid poured onthe interior surfaces of the car.

Following his arrest, Iwanicki implicatedAdam Nelag as the individual who wasutilizing the vehicle during the time when ithad been burned. On October 20, 2006, awarrant was issued for Nelag’s arrest. Nelagwas extradited from Florida and charged withInsurance Fraud. The matter is pending.

Burlington CountyProsecutor’s Office

State v. Colleen SaccaColleen Sacca, a former nurse, pled guilty

to Health Care Claims Fraud and wassentenced on September 22, 2006, to threeyears probation, conditioned upon serving364 days in county jail at the conclusion ofprobation. Sacca allegedly presented afraudulent prescription for hydrocodone ata pharmacy in Cinnaminson Township,which was then submitted to her prescrip-tion insurance plan.

State v. William SchobertIn a cooperative investigation with

Medford Township, William Schobert wasarrested on July 11, 2006, and charged withHealth Care Claims Fraud, theft by deception,and forgery. The State alleges that, betweenMarch 2002 and March 2004, Schobert, apharmacist employed at a Medford pharmacy,falsely created prescriptions in his name andin the names of others, printed receipts forthe fraudulent prescriptions, subsequentlydeleted the records from the store’s com-puter, and then allegedly submitted thereceipts as claims for reimbursement from hisinsurance company for over $80,000. Thematter is pending Grand Jury.

State v. Patrick PetersonPatrick Peterson pled guilty to an

indictment charging him with simulatinga motor vehicle insurance identificationcard. On October 20, 2006, he wassentenced to 12 months state prison.

State v. Shirley Gismondi, et al.On December 1, 2006, Lori Martellacci,

Gina Naticcione, and Richard Naticcionewere each sentenced to two years probationfollowing their guilty pleas to charges ofconspiracy to commit theft by deception. Inaddition, they were each ordered to pay a$1,000 criminal fine and joint and several

County Prosecutors’ Offices Case Notes

32

restitution in the amount of $1,911 to theBurlington Township Fire Department. OnSeptember 29, 2006, Eric Schleinkofer wassentenced to three years state prison andordered to pay restitution to the BurlingtonTownship Fire Department in the amountof $1,911. Schleinkofer previously pledguilty to charges of conspiracy to commitarson. On the same date, the courtsentenced Shirley Gismondi to two yearsprobation. Gismondi previously pled guiltyto conspiracy to commit theft by deception.

Lori Martellacci, with the assistance of GinaNaticcione and Richard Naticcione, arrangedto “give up” her vehicle when she foundherself unable to make the car payments.Richard Naticcione contacted EricSchleinkofer, who agreed to “get rid” of thecar for $200. Richard Naticcione gave the keysto Schleinkofer. Subsequently, Schleinkoferand his girlfriend, Shirley Gismondi, pickedup the vehicle at a local mall and set it on firein Burlington Township.

Camden County Prosecutor’s OfficeState v. Bryan SharpFollowing a three-week jury trial, Bryan

Sharp was convicted of arson forinsurance on December 20, 2006. Sharp,Chief of the Camden County Fire Police,set fire to his house in order to benefitfrom the proceeds of a false insuranceclaim. An investigation by the FireMarshal determined the fire to be arson.High Point Insurance Company paidSharp $200,000 on the fraudulent claim.Sentencing is scheduled for early 2007.

State v. Catherine Fee, et al.Catherine Fee, a licensed pharmacist,

pled guilty to an Accusation charging herwith conspiracy to distribute CDS byforging doctors’ signatures on prescrip-tion phone-in logs. The incidentsoccurred without the doctors’ knowledge.On February 10, 2006, Fee was sentencedto three years probation, ordered to pay$1,229 in restitution to CVS Pharmacy,and surrendered her pharmacist’s licensefor three years. Eckerd Pharmacy wasrepaid $1,250 in a separate agreement.

Brian Weimer was also charged for hisalleged role in picking up the fraudulentlyobtained prescriptions. Weimer iscurrently a fugitive; a bench warrant hasbeen issued for his arrest.

State v. Robert ChisholmOn October 23, 2006, Robert Chisholm

was sentenced to five years and 72 days instate prison. Chisholm previously pledguilty to an indictment that charged himwith forgery, criminal attempt to obtainCDS by fraud, theft of property, and HealthCare Claims Fraud. Chisholm stole a blankprescription pad from his treating physician,and, on various occasions, entered apharmacy and submitted fraudulentprescriptions for Xanax. Chisholm usuallypaid for the prescriptions with cash,however, in one incident, he used hisMedicaid plan as payment. Pharmacyemployees became suspicious and notifiedlaw enforcement when they noticed that theprescription amounts had been altered.

Essex County Prosecutor’s OfficeState v. Keith RobertsKeith Roberts pled guilty to Insurance

Fraud on February 27, 2006. On April 21,2006, he was sentenced to three years in stateprison. Roberts had reported his vehiclestolen from Vineland, but could not explainto investigators how his transponderequipped 2001 Mitsubishi Galant arrived inNewark, to be burned, without one of thekeys that he surrendered after the fire.

State v. Carlos TorresOn September 25, 2006, Carlos Torres pled

guilty to Insurance Fraud and theft bydeception for arranging to have his 2003Chevy Trailblazer disposed of in Newark.Torres was sentenced to two years probation.

State v. Vincent DeVitoVincent DeVito was indicted on March

6, 2006, and charged with InsuranceFraud and arson. DeVito allegedlyarranged to have his 1996 Mercedes-BenzG320 burned in Belleville. The matter ispending trial.

Warren County Detective Clement Mezzanotte prepares an investigation report.

33

The Year in Review: OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts

Gloucester County Prosecutor’s OfficeState v. Dana BalbianIn September 2006, Dana Balbian entered

the Pretrial Intervention (PTI)1 Program afterpleading guilty to an Accusation charging herwith obtaining CDS by fraud and Health CareClaims Fraud. Balbian, a pharmacy employee,allegedly received and filled 28 fraudulentprescriptions. She alleged the prescriptionswere in the names of two individuals whowere her friends. Four of the 28 fraudulentprescriptions were submitted to Horizon ofNew Jersey for payment.

State v. Wendell E. FrazierOn September 14, 2006, Wendell E.

Frazier was sentenced to three yearsprobation. Frazier previously pled guiltyto an Accusation charging him withattempting to commit Insurance Fraud.Frazier reported to the Glassboro PoliceDepartment that he had been carjacked.Frazier later admitted that he filed a falsepolice report and made false statements tothe insurance company on his claim.

Hudson County Prosecutor’s OfficeHudson County InitiativeIn 2004, the Hudson County

Prosecutor’s Office Insurance Fraud Unitbecame aware of abuses that existed in thecommuter “Dollar” van business operatingwithin Hudson County, in which theinsurance premium money was beingdiverted and fictitious insurance identifica-tion cards were being provided to indepen-dent owner operators by franchised carriermanagement. As part of a proactiveresponse to this type of illegal activity, theNew Jersey Motor Vehicle Commercial BusInspection Unit, various Municipal PoliceDepartments, and the Port Authority PoliceDepartment were contacted. Arrangementswere made to conduct eight joint safetyinspections of these vehicles, three during2005 and five during 2006, in variousHudson County locations utilizing theUninsured Motorists IdentificationDirectory (UMID) issued each year by OIFP.

As a result of these joint operations,the NJMV Commercial Bus Unit’s, as wellas the various Municipal Police Depart-ments’, ability to recognize valid insurance

cards has increased and fictitious insuranceidentification cards are more readilydetected. In addition, various Investiga-tors have made direct contacts with theinsurance companies involved and haveobtained up-to-date information on thevehicles that are currently insured. As anadded benefit, the NJMV Inspectorsutilize the information in the UMID intheir daily inspections throughout theState of New Jersey. As a result of theabove initiative, the owners of J & TTransit and Sphinx Transportation havebeen successfully prosecuted.

State v. Mike MurtanaMike Murtana, the owner of Sphinx

Transportation, pled guilty to anindictment that charged him withInsurance Fraud. On September 15,2006, he was sentenced to four yearsprobation and ordered to pay restitutionin the amount of $67,850. SphinxTransportation was targeted in a HudsonCounty initiative designed to address thediversion of auto insurance premiummoney and uninsured motorists.

State v. Ernest Baptista, et al.On October 19, 2006, Ernest Baptista

pled guilty to Insurance Fraud for hispart in the arson of a 2005 ChevroletEquinox. Baptista, in his position ascredit manager at the dealership wherethe vehicle had been purchased, had alsoarranged for its disposal when thebuyers, Sandra Hernandez and OscarMendoza, allegedly could not make themonthly payments on the vehicle.Hernandez and Mendoza, as cooperatingwitnesses, also pled guilty to InsuranceFraud in this matter and are to be

admitted into the PTI Program. As partof the plea agreement, the defendantsagreed to pay restitution in the amountof $27,500, with Baptista responsible for$15,000 of that sum.

Hunterdon County Prosecutor’s OfficeState v. Bruce Keller, et al.Bruce and Irlene Keller were indicted

and charged with aggravated arson, arson,attempted theft by deception, andconspiracy. On June 20, 2006, following atwo-and-a-half week jury trial, they wereconvicted on all charges. The Kellers arepending sentencing in this matter.

The charges arose from circumstancessurrounding a residential fire at a homethe Kellers owned in HunterdonCounty. Months prior to the fire, theyhad purchased a residence in Virginia.However, Bruce and Irlene Keller werein New Jersey and staying at theHunterdon County home at the time ofthe fire. Both escaped from the burningresidence uninjured.

Bruce and Irlene Keller subsequentlysubmitted a claim to Chubb InsuranceCompany claiming approximately $2.5million in losses from both theresidence and the contents of theresidence. An investigation conductedby the New Jersey State Police Arson/Bomb Unit determined the fire to bearson, for which the Kellers werecharged. The investigation also revealedthe absence of furnishings and clothingat the fire scene, as well as othercircumstantial evidence. It was allegedthat the Kellers had moved the majorityof their belongings to their Virginia

1. Pretrial Intervention (PTI) is a diversionary program created by statute and court rule. TheLegislature established that it is the public policy of the State to divert certain defendants from thecriminal justice system when, among other factors, diversion will serve to remove cases from thecriminal court in order to focus resources on more serious matters or more dangerous defendants, orPTI supervision will suffice to deter that particular defendant from future criminality. N.J.S.A. 2C:43-12a.A defendant is admitted to PTI upon the recommendation of the PTI program director and the consent ofthe prosecutor. The program director and the prosecutor are required to consider, and base theirdecisions on, the defendant’s amenability to correction, responsiveness to rehabilitation, and the natureof the offense. Id. at -12b,e; PTI Guideline 3. If a defendant is admitted to PTI, the criminal prosecution issuspended while the defendant undergoes the supervision or rehabilitation required by the PTI programstaff. The judge may order restitution as part of the PTI program. If the defendant successfully completesthe program, the criminal charge is dismissed. If the defendant fails to complete the program, thecriminal prosecution resumes. N.J.S.A. 2C:43-13; R. 3:28.

34

residence prior to the fire, and, there-fore, fabricated the loss of contentsinsurance claim.

Mercer County Prosecutor’s OfficeState v. Justin CroweJustin Crowe was indicted and charged

with presenting a fictitious insuranceidentification card to a police officer. Hewas admitted into the PTI Program onDecember 2, 2006.

State v. Sherayla HillSherayla Hill was indicted and charged

with tampering with public records (atemporary registration tag) and uttering afraudulent insurance identification card forallegedly presenting a fake insuranceidentification card to a New Jersey StateTrooper. She was admitted into the PTIProgram on February 16, 2006.

State v. Jennifer RadiganJennifer Radigan pled guilty to filing a

false police report and attempted theft forfalsely reporting her car stolen. Radiganwas sentenced to five years probation onJanuary 9, 2006.

State v. Calvin RigginsOn May 26, 2006, Calvin Riggins pled

guilty to an indictment charging him withtampering with public records afterpresenting a fraudulent insuranceidentification card to a police officer. Hewas given a probationary sentence.

State v. Sonia StylesOn August 7, 2006, Sonia Styles pled

guilty to an indictment charging her witheluding and theft by receiving stolenproperty. On September 29, 2006, she wassentenced to seven years state prison with athree-year period of parole ineligibility.Styles was eluding police while driving a carthat had been stolen from South Carolinaas part of a sophisticated auto theft ringthat stole from auto dealerships in andaround the South Carolina area. The modusoperandi employed by the thieves was to testdrive a car and switch keys after the testdrive; then the thieves would drive the caroff the lot (utilizing the stolen key) afterthe dealership closed for the night.

State v. Kenneth SwickKenneth Swick pled guilty to uttering a

fraudulent government document anduttering a fraudulent insurance identifica-tion card. He was sentenced to probationon April 21, 2006. Swick presented aPennsylvania drivers license, to avoid usinghis suspended New Jersey drivers license,and a fraudulent insurance card to a policeofficer during a motor vehicle stop.

Morris County Prosecutor’s OfficeState v. Delmiro DacunaOn January 11, 2006, Delmiro Dacuna

was charged with Insurance Fraudresulting from his alleged inclusion offalse information on his company’sapplication for workers’ compensationinsurance. Dacuna was admitted into thePTI Program and fined $500.

State v. Kimberly (Stark) McCauley, et al.David McCauley pled guilty to Health

Care Claims Fraud, and, on October 6,2006, he was sentenced to four concurrentfive-year state prison terms. On June 16,

2006, Kimberly Stark (formerly McCauley),having previously pled guilty to theft bydeception, was sentenced to three yearsprobation and ordered to pay restitutionin the amount of $8,895 to five insurancecompanies. In March 2006, KimberlyStark McCauley executed a $5,000 civilConsent Order.

David McCauley and his former wifeKimberly (Stark) McCauley were indictedand charged with numerous crimes arisingout of their engagement in a pattern ofconduct that involved the submission offalse or inflated claims to various healthinsurance companies. David McCauleyoperated a licensed substance abusetreatment center for adolescents. KimberlyMcCauley conducted her chiropracticpractice at a location that was adjacent toher husband’s rehabilitation center.David McCauley sent more than 30 ofhis patients to his wife for chiropracticservices that were either not necessary ornot performed. Kimberly McCauleysubsequently agreed to cooperate withthe investigation.

Detective Douglas Porter, Secretary Tracy Zandarski, and Assistant Prosecutor Rachelle Jonesreview a Sussex County insurance fraud case.

35

The Year in Review: OIFP Funds County Prosecutors’ Insurance Fraud Fighting Efforts

State v. Tina Hadjissa, et al.On September 6, 2006, Tina Hadjissa

and Tampe Hadjissa, a married couple,were indicted and charged with conspiracyto commit Insurance Fraud, InsuranceFraud, and theft. The Hadjissas allegedlysubmitted fraudulent information inconnection with their application forMedicaid and public assistance andallegedly received money and benefits towhich they were not entitled. Bothdefendants were admitted into the PTIProgram in November 2006, conditionedupon making full restitution in theamount of $7,000.

State v. Rony Hernandez, et al.On October 11, 2006, Rony Hernandez,

his wife, Ligia Canelas, and his brother,Denis Hernandez, were indicted andcharged with receiving stolen property(namely, cars and motorcycles), operating a“chop shop,” fencing, altering motorvehicle identification numbers, and othercrimes. Rony Hernandez and DenisHernandez were also charged with leading astolen car ring. The matter is pending trial.

Ocean County Prosecutor’s OfficeState v. Brian StoutOn September 28, 2006, Brian Stout was

sentenced to three years state prison afterpleading guilty to Health Care ClaimsFraud, forgery, obtaining a controlleddangerous substance by fraud, and theft.Stout obtained stolen prescription blanksand proceeded to have a series of prescrip-tions filled for OxyContin, using his healthcare benefits. An alert pharmacist checkedon a prescription submitted by Stout andfound that it had not been authorized.Pharmacy records indicated that there hadbeen ten additional prescriptions that hadbeen filled by Stout.

State v. Carolyn TherrienOn June 19, 2006, Carolyn Therrien

was sentenced to three years probationafter pleading guilty to Insurance Fraud.Therrien reported to a store manager thatshe slipped and fell on an icy parking lotat a local supermarket. Subsequently,Therrien filed an insurance claim with theTravelers Property and Casualty Insur-

ance Company seeking compensation forinjuries sustained in the alleged fall.Video surveillance of the parking lotrecorded Therrien’s actions at the time ofthe claimed incident. The video demon-strated that the claimed “slip and fall”did not occur.

Passaic County Prosecutor’s OfficeState v. Isabel Tavares a/k/a IsabelRodriguezOn June 30, 2006, Isabel Tavares, a/k/a

Isabel Rodriguez, was sentenced to five yearsprobation after pleading guilty to theft bydeception. Tavares was also ordered to payover $50,000 in restitution. Tavares submit-ted a fraudulent workers’ compensation claimto Chubb Insurance. Tavares failed to discloseseveral prior and subsequent injuries forwhich she also submitted claims. Further-more, she used false personal identifiersincluding a false Social Security number anddate of birth, in an effort to conceal thoseadditional claims from Chubb.

State v. Tamara IssacOn April 24, 2006, Tamara Issac was

admitted into the PTI Program for aperiod of three years and was ordered topay $3,000 in fines. Issac allegedly claimedthat her vehicle was struck from behind byanother vehicle. A subsequent investiga-tion by AAA Mid-Atlantic InsuranceGroup and the Insurance Fraud Unitrevealed that Issac had actually backed upinto the opposing vehicle.

State v. Felipe Zapata, et al.On February 9, 2006, Felipe Zapata was

arrested and charged with Health Care ClaimsFraud. It is alleged that Felipe and his brother,Manuel Zapata, were “jump in” passengersin a motor vehicle accident. Felipe and ManuelZapata allegedly claimed to be injured in theaccident and were allegedly transported fromthe scene via ambulance. Subsequently, theyallegedly began treatment with a localchiropractor and claims for such treatmentwere submitted to Palisades InsuranceCompany. The State alleges that neither Felipenor Manuel Zapata were passengers in thevehicle at the time of the accident. A warranthas been issued for Manuel Zapata’s arrest.

State v. Adalberto MatiasOn October 17, 2006, Adalberto Matias

was indicted and charged with attemptedtheft by deception. Matias allegedly filed afraudulent motor vehicle theft claim withClarendon National Insurance Companystating that he had last driven his car andparked it on March 11, 2003, when, in fact,the vehicle was recovered burned inConnecticut on March 10, 2003. Thematter is pending trial.

State v. Yuri GuillenAn Accusation was filed charging Yuri

Guillen with attempted theft bydeception. On November 17, 2006,Guillen was admitted into the PTIProgram for a period of three years.Guillen allegedly submitted a fraudulentauto theft claim to First TrentonIndemnity Company. A joint investiga-tion by the Insurance Fraud Unit andPaterson Fire Department determinedthat the alleged theft and subsequentburning of Guillen’s 2004 DodgeCaravan were fraudulent.

Salem County Prosecutor’s OfficeState v. Debora KarpinskiOn April 3, 2006, Debora Karpinski

pled guilty to an Accusation charging herwith Insurance Fraud and was ordered topay restitution in the amount of $36,000.Between May 2004 and July 2005,Karpinski fraudulently obtained prescrip-tion blanks from her previous employer, adoctor, and submitted the prescriptionsthrough Aetna Insurance Company.

State v. Liza HernOn August 23, 2006, Liza Hern, a

nurse, was indicted and charged withInsurance Fraud. On four separateoccasions, Hern allegedly submittedfraudulent prescriptions to a pharmacy toobtain 120 tablets of Oxycodone andthen submitted claims for the illegallyobtained drugs to Express Scripts, whichpaid $452 for the fraudulent prescriptions.The matter is pending trial

36

State v. Arnetia KiddOn July 19, 2006, Arnetia Kidd was

indicted on charges of Insurance Fraud.Kidd allegedly failed to report anadditional driver on her auto insurancepolicy. As a result, Allstate InsuranceCompany was allegedly defraudedapproximately $900 in premiumpayments. The matter is pending trial.

State v. Thias ThompsonOn August 2, 2006, Thias Thompson

was indicted and charged with InsuranceFraud. Thompson allegedly failed to reportan additional driver on her auto insurancepolicy. As a result, Allstate InsuranceCompany was allegedly defraudedapproximately $1,300 in premiumpayments. The matter is pending trial.

Somerset County Prosecutor’s OfficeState v. Johnny ShiOn May 4, 2006, Johnny Shi was

arrested and charged with theft bydeception. Shi, who was a salesman at hisbrother’s communications store, allegedlyfraudulently filed approximately 30insurance claims on cellular telephonesthat he had allegedly recently sold tocustomers. As a result of those claims,Shi allegedly received new replacementcellular telephones by mail, which heallegedly either kept for himself or resoldas inventory at another store located inNew York. The Green Brook PoliceDepartment and Insurance Fraud Unitwere assisted by fraud investigators fromCingular Wireless and Asurion Insuranceduring this investigation.

State v. Anthony DoyleOn September 1, 2006, Anthony “Tad”

Doyle was arrested and charged withInsurance Fraud. Doyle, a public adjuster,was hired by a Somerset couple to evaluatedamage to their counter top resulting froma small kitchen fire in their home and to filea claim with New Jersey ManufacturersInsurance Company on their behalf. Doyleallegedly filed an inflated claim forapproximately $15,600 in damages.However, the State alleges that an investiga-tion by the insurance company revealed thefire caused approximately $700 in damages

to the claimants’ home. Doyle’s allegedmisleading statements were allegedlyintended to induce the insurance companyinto paying a grossly exaggerated claim.The case is pending trial.

Sussex County Prosecutor’s OfficeState v. Clayton ErvenOn December 6, 2006, Clayton

Erven was sentenced to one yearprobation, ten days in the SLAPprogram, and ordered to pay criminalfines after pleading guilty to exhibitingan altered or simulated motor vehicleinsurance identification card. Ervenproduced an expired insurance cardfrom Selective Insurance Companyduring a motor vehicle stop. Thefollowing day he stopped at theSheriff ’s Department and produced analtered insurance card to get his carreleased from the impound yard.

Union County Prosecutor’s OfficeState v. Terrance J. BarfieldOn August 25, 2006, Terrance J.

Barfield was sentenced to three years stateprison after previously pleading guilty toInsurance Fraud. Barfield assisted indismantling a car knowing it would bereported stolen for insurance purposes.The owner of the car ultimately made afraudulent claim to Rutgers CasualtyInsurance Company.

State v. Andre Manning, et al.On August 3, 2006, Andre Manning

was sentenced to probation, condi-tioned upon serving 270 days in countyjail, on charges of Insurance Fraud.Manning allegedly arranged to have hisgirlfriend’s car disassembled at a “chopshop,” knowing she would report itstolen to Clarendon Insurance Com-pany. Manning allegedly admitted toparticipating in the destruction of twoadditional cars, knowing that theywould be reported stolen for insurancepurposes. The two insurance companiesinvolved were High Point andProformance Insurance. Manning’sgirlfriend, Josezetta Hill, was admittedinto the PTI Program.

State v. Ruthie WalkerOn September 14, 2006, Ruthie Walker

was charged with Insurance Fraud forallegedly falsely reporting to New JerseyManufacturers Insurance Company thather car had been stolen in New Jerseyseveral weeks after it actually had beenparked in an airport parking garage inDetroit, Michigan.

State v. Reveca VigierReveca Vigier was charged with

simulating a motor vehicle insuranceidentification card. On May 5, 2006, shewas accepted into the PTI Program. Vigierallegedly presented a fraudulent LibertyMutual insurance identification card to anElizabeth police officer prior to leavingthe scene of an accident.

State v. Marco TranchoOn August 2, 2006, Marco Trancho was

accepted into the PTI Program. Tranchowas charged with Insurance Fraud forallegedly inflating the value of theaccessories in his stolen car claim submit-ted to Allstate Insurance Company.

Warren County Prosecutor’s OfficeState v. Georgeann PludowskiOn October 16, 2006, Georgeann

Pludowski pled guilty to conspiracy andtheft by failure to make required disposi-tion of property received in connectionwith allegedly converting the proceeds ofan estate, which included a $30,000 lifeinsurance benefit, for her and herhusband’s personal use. She was admittedinto the PTI Program and ordered to pay$36,865 in restitution.

State v. Steven Lee WilsonOn September 22, 2006, Steven Lee

Wilson pled guilty to falsifying ortampering with public records and failureto register as a contractor. He wassentenced to 18 months probation, andordered to pay $2,000 in restitution and$280 in criminal fines. Wilson, trading asStevcon Renovations, allegedly presentedan altered Certificate of Liability Insuranceto a homeowner who had hired him toperform home renovations.

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The Year in Review: OIFP’s Budget for Fiscal Year 2006

In accordance with N.J.S.A. 17:33A-30,OIFP operations are funded through anassessment on the insurance industry. Itshould be noted that although the MedicaidFraud Section is a part of OIFP, moniesderived from the assessment on theinsurance industry do not fund the MedicaidFraud Section. Rather, the Medicaid FraudSection is funded by a federal grant thatprovides 75% federal funding and requiresthe State to provide a 25% State match fromDirect State Services (DSS) funds.

OIFP operating costs consist ofexpenses incurred directly by OFIP staff, aswell as expenses for services, facilities, andequipment shared jointly with theDivision of Criminal Justice (DCJ) andthe Department of Law and Public Safety,but benefitting OIFP staff and OIFPoperations. By sharing these commonservices with DCJ and the Department ofLaw and Public Safety, OIFP is able to takeadvantage of economies of scale andthereby reduce its overall operating budget.

In order to ensure that there istransparency, accountability, and fiscalintegrity in all expenditures of industrymonies, the Insurance Fraud Prosecutorhas implemented a Cost Allocation Planwhich precisely identifies all supportservices provided by DCJ to OIFP anddocuments a fair methodology forassessing costs associated with thoseexpenses. A summary of the CostAllocation Plan and quarterly expensereports are posted on OIFP’s Web site sothat the insurance industry, as well as thegeneral public, will have continuous accessto OIFP’s fiscal reports.

In accordance with the 2005 State AuditorReport, it is appropriate for DCJ personnelwho provide various support services toOIFP to be paid out of OIFP funds. See

State Auditor Report for the Department of Lawand Public Safety, Division of Criminal Justice,Office of the Insurance Fraud Prosecutor, issuedJuly 15, 2005. Such services includeadministrative, legal, and investigativesupport. The Annual Cost Allocation Plandetails the following four levels of supportprovided by DCJ to OIFP: AdministrativeSupport, Professional Support, IntermittentSupport, and Non-Salary Costs.■ Administrative Support

Due to the nature of administrativework in such areas as HumanResources, Fiscal and Budget,Facilities, and IT Services, it is difficultto differentiate between those servicesprovided to OIFP and those servicesprovided to other sections withinDCJ. The Cost Allocation Planprovides that administrative salarycosts are to be allocated based on aratio of the number of OIFP staff tothe number of DCJ staff. At thebeginning of each fiscal year (July 1),this percentage is determined andapplied to the salaries and fringebenefits costs of those sectionsclassified as providing administrativesupport to OIFP for that fiscal year.

■ Professional SupportDCJ provides a number of servicesthat are needed to allow the criminalcomponent of OIFP to betterinvestigate and prosecute insurancefraud. Evidence Storage, State GrandJury, and Records and IdentificationSections, among others, allow OIFPto use resources already in place ratherthan create its own separate resourceproviders. In order for OIFP to payfor its fair share of those sharedcriminal resources, at the beginning ofeach fiscal year, the Cost AllocationPlan details a formula to determinethe percentage size of the criminalcomponent of OIFP to that of DCJ.This percentage is then used for theupcoming fiscal year to pay thecorresponding portion of staffsalaries and fringe benefits costs forstaff assigned to DCJ sections underthis classification.

■ Intermittent SupportDCJ also provides a host of resources toOIFP on an as-needed basis. Extramanpower for search warrants, forensiccomputer analysis, handwriting analysis,and the installation of electronicsurveillance equipment are a fewexamples of investigative supportprovided by DCJ to OIFP. In addition,OIFP relies on designated DCJ legal staffto handle its appeals, ethics inquiries, andforfeiture actions, among other legaltasks. Since these resources are usedintermittently, DCJ has developed a newdivision-wide timekeeping system toenable OIFP to precisely track theamount of time spent by DCJ employ-ees on OIFP activities. At the end of eachfiscal quarter, time spent by non-OIFPstaff on OIFP matters is calculated andOIFP reimburses DCJ for those costs.The new timekeeping system also worksin reverse, tracking the number of hoursworked by OIFP staff on non-OIFPassignments. Given tight budgetrestrictions in the State and the increasingdemands on statewide law enforcement, itis sometimes necessary for OIFP staff toprovide support in implementingstatewide DCJ initiatives. However, thisdoes not mean that the insurance industryshould pay for these non-insurance fraudrelated activities. The new tracking systemallows both OIFP and DCJ to determinethe number of hours worked by therespective staff members and reconcile themanpower costs on a quarterly basis.

■ Non-Salary CostsIn order for OIFP to accomplish itsmission, it must have facilities andequipment available for its use. Itemsthat are used solely by OIFP arepurchased and maintained by OIFP.Items, such as buildings, computernetworks, and phone systems, thatOIFP shares with other sections withinDCJ, are paid based on the percentageuse of those resources by OIFP staff.The percentage size of OIFP ascompared to DCJ is determined at thebeginning of each fiscal year and thatpercentage is applied to those costs asthey are incurred through the fiscal year.

OIFP’s Budget for Fiscal Year 2006 by Ray Shaffer

Ray Shaffer is the OIFP Administrative Liaisonand assists the Insurance Fraud Prosecutor inthe day-to-day administrative management ofOIFP by working closely with the Division ofCriminal Justice’s Administrative Bureau. He

had been part of the DCJ Administrative Bureaufor 27 years before coming to OIFP in 2005.

38

Personnel (Salaries and Fringe Benefits) $21,800,327.35OIFP Staff Salaries and Fringe Benefits11111 $19,887,273.26DCJ Support Staff Salaries and Fringe Benefits22222 $1,913,054.09

Outside and Professional Services $4,894,587.83County Prosecutor Reimbursement Program33333 $2,905,699.84DOL Professional Support44444 $1,600,000.00Expert Witness and Other Professional Services $146,152.30Transcription and Other Expenses $242,735.69

Training, Trial and Investigative Travel Expenses5 $20,904.71

Vehicles and Vehicle Maintenance $703,460.68Fuel and Oil for OIFP Undercover Vehicles $79,734.80Undercover Vehicle Lease and Maintenance $122,821.52State’s Central Motor Pool Vehicle Lease, Maintenance & Fuel66666 $500,904.36

Office Supplies, Services, Equipment and Maintenance $984,399.68Household and Janitorial Supplies $10,413.55Maintenance of Equipment $42,665.63Office Equipment Purchases $80,172.30Other Supplies $198.34Printing and Office $90,039.35Postage $31,113.76Telephone $215,881.99Database Licensing Purchases and Maintenance $178,432.51State Mainframe Charges $36,924.14IT and Telephone Equipment Purchases and Maintenance $298,558.11

Building Rent and Maintenance7 -$1,121.88Maintenance - Building $141.12Rent - Buildings $1,263.00

TT l or a i s otal OIFP Expenditures for F c Yi iscal Y a 20ear 2006 $28,402,558.37Less Prior Year Repayment of Non-OIFP Hours --$475,059.58

TT f FP d res r otal Net OIFP Expenditures for F is Y iscal Y 2 ear 2006 7 2 4$ .$27,927,498.79

11111 Includes Attorney, Investigator, Professional and Clerical staff working directly for OIFP.22222 Cost of Shared Administrative and Criminal Support provided by DCJ per the FY2006 Cost Allocation Plan.33333 Funds provided to County Prosecutors’ Offices as reimbursement for activities undertaken by those offices

in connection with investigating and prosecuting insurance fraud. See N.J.S.A. 17:33A-28.44444 Civil Attorney Staff and Services provided by the Division of Law to litigate OIFP civil cases under

the NJ Insurance Fraud Prevention Act. See N.J.S.A. 17:33A-1, et seq.55555 Includes witness transportation to and from trial.66666 Vehicle lease, fuel and maintenance for vehicles used by OIFP Investigators and Prosecutors

to do field work and attend court appearances.77777 Includes rental of undercover facilities but does not include cost of building rent for OIFP’s

three regional offices which are billed separately by Treasury. Fiscal Year = July 1 through June 30

OIFP Expenditure Report for Fiscal Year 2006

39

NJ Insurance Industry’s Perspective on Ambulatory Surgical Centers

the patient for proper anesthesiarecovery before discharge.

In order to qualify for the “safeharbor,” the ASC must meet severalrequirements. The ASC must be aMedicare certified ASC and must haveoperating and recovery room spacededicated exclusively to the ASC. Thepatients referred to the ASC by aninvestor must be fully informed of thatinvestment. Furthermore, the invest-ment terms cannot be related to theexpected volume of referrals. In addi-tion, the ASC and other investors cannotloan funds or guarantee a loan to anyinvestor. Also, at least one-third of thephysician owner’s medical income for thelast 12 months must be from ASCprocedures. Finally, any ancillary servicesmay not be separately billed.

Under the regulations, the ASCmust fall within one of the followingfour categories:

a. Surgeon-owned ASC;b. Single-specialty ASCc. Multi-specialty ASC;d. Hospital/physician-owned ASC.

There are very specific regulations for eachof these categories. The most commonand most troublesome for PIP carriers isthe multi-specialty ASC. For multi-specialty ASCs, all investors must eitherbe physicians in a position to referpatients to the entity and performprocedures on those patients, or investorsnot employed by the ASC. In addition, atleast one-third of the proceduresperformed by physician investors in theprevious 12 months must have beenperformed at an owned ASC.

Where the Fraud BeginsThe New Jersey Board of Medical

Examiners (BME) recognizes the federal“safe harbor” for physician owners inNew Jersey and has taken additional stepsto regulate ASCs. However, the ASC itselfis regulated by the Department of Healthand Senior Services (DHSS) rather thanthe BME. Therefore, under the currentsystem, DHSS regulates the facility whilethe BME regulates the practitioners.

Under this regulatory scheme, severalpotential issues may develop. These issuesmay be divided into different complianceparameters. The first is who is required tohave a license, and how does onedetermine whether the individual or theentity is improperly operating without alicense? DHSS licenses ASCs under theHealth Care Facilities Planning Act,N.J.S.A. 26:2H-1, et seq. However, thislicensure requirement does not apply to asurgeon’s private practice.

A private surgical practice is defined atN.J.A.C. 8:43A-1.3 which states that to beexempt from DHSS licensure require-ments, a surgical practice must be“established by a physician or physicianprofessional association surgical practicesolely for his/her/their private medicalpractice.” N.J.A.C. 8:43A-1.3. Also, aprivate practice must have only onededicated operating room. If theoperating room is not used “solely” forthe practice of the owners, it is not asurgical practice, and it must be licensed.

This leads to the issue of chargingfacility fees for unlicensed ASCs operatingas a private surgical practice. If the surgicalpractice is not subject to the licensingjurisdiction of DHSS, then the BMEregulation limiting facility fees arguablyapplies. But, as will be seen later, thisregulation is ambiguous. Also, under thefederal “safe harbor” provisions, theprovider must be a Medicare registeredsurgeon. Since Medicare only allowscertain listed surgical procedures to beperformed at ASCs, the same shouldapply in the PIP context.

There are also several other issuesthat arise in this context. For example, thephysician must be privileged to perform“that surgery” or special procedure by ahospital, or, if not by a hospital, thendirectly by the BME. N.J.A.C. 13:35-4A.6(a). The BME regulations at N.J.A.C.13:35-4A.1, et seq. also impose require-ments on physicians who perform“surgery” or “special procedures” in an“office setting.” In that provision, eachterm is defined and “minor surgery” isspecifically excluded. Finally, there arealso extensive regulations that control

other factors, such as patient safety,written instructions, written surgicalpolicies, written quality assurance pro-grams, and existence and maintenanceof emergency equipment.

The potential for insurance fraud inASCs begins where the regulations end.At the present time, there are no regula-tions controlling the fees charged by theASC and the associated providers.Medicare fees essentially do not apply inthe PIP context. This determination wasmade by the Board based on its interpre-tation of the Medicare regulations and theBoard’s regulations.

One could argue that the fee issueshould be controlled by the Board’sregulation found at N.J.A.C. 13:35-6.17(h)(5) which reads:

A licensee who owns or practices inpremises used for the performance ofpersonal medical services including,but not limited to, ambulatory surgeryservices but not holding a Certificateof Need (License) from the StateDepartment of Health, shall notcharge, or permit or condone a chargeor “facility fee” separate from the feefor professional services. A facility feemay, however, be charged by a licenseewho is a registered Medicare providerof surgical services, who is billingpursuant to criteria for such feeestablished by rules of the UnitedStates Department of Health andHuman Services.

The common understanding ofthis provision is that no facility fee isallowed unless the facility and providerqualify under the federal “safe harbor”provisions. More importantly, one couldclearly argue that under this BMEregulation, the Medicare fee scheduleshould apply. However, there is also aBoard decision that is widely circulatedthat specifically speaks to the aboveunderlined language as follows:

The Committee advises that theemphasized phrase should beunderstood to mean that the facility/medical office is, in fact, staffed andequipped to meet Medicare standards.

50

New Jersey Legislature Takes Aim at Fraud and Abuse in the Medicaid Program

State government funds.3 The NJFCAencompasses claims made for anygovernment funded contract or program.Violators may be liable for three times theState’s damages, plus civil penalties of$5,000 to $10,000 per false claim, which isthe amount currently allowed under thefederal False Claims Act, plus anyadjustments for inflation.4

A civil action may be brought by theAttorney General or a private person forviolations of the NJFCA.

Civil Action by the Attorney GeneralThe Attorney General is charged with

investigating violations of the NJFCA. Ifthe Attorney General finds that aviolation of the NJFCA has occurred, theAttorney General may file a civil action.

Civil Action by Private Persons (qui tams)In order to recover stolen funds, the

qui tam or whistle blower provisions ofthe NJFCA allow private persons withevidence of fraud against State fundedcontracts and programs to sue on behalfof the person and the State. However, theaction must be brought in the name ofthe State of New Jersey. The person mustimmediately serve the complaint and awritten disclosure of substantially allmaterial evidence and information theperson possesses upon the AttorneyGeneral. The complaint will be sealed forup to 60 days and will not be served onthe defendant until service on thedefendant is ordered by the court.

The Attorney General may, for goodcause shown, request that the courtextend the time during which thecomplaint remains under seal. Theextension motions must be supported byaffidavits or other submissions in camera.Under A3428, the Attorney General islimited to three motions of no morethan a 90-day period for each extension, ineffect maxing out any extensions at 270days in total. However, the federal FalseClaims Act does not contain a time limiton extensions, but requires that goodcause be shown for an extension of theseal. Senate bills S360 and S1829 mirrorthe federal False Claims Act.

The time limit on extensions is animportant distinction between theAssembly and the Senate bills. Althoughthe proposed legislation allows for civilsuits, in reality, many of these cases filedunder seal will be referred to the criminaldivision of the Attorney General’s Office,the Division of Criminal Justice (DCJ),for criminal investigations. It is vitallyimportant for DCJ to have the flexibilityto conduct thorough investigations.Often times, such investigations are longterm investigations which may beadversely impacted by a time limit.

The person bringing the action mayvoluntarily dismiss the action, with (1) thewritten consent of the Attorney Generalexplaining why the Attorney Generalconsented, and (2) the approval of thecourt. If a person brings an action under

the NJFCA and the action is based uponthe facts underlying a pending AttorneyGeneral investigation, upon 30 dayswritten notice to the person bringing thelawsuit, the Attorney General may takeover the action on behalf of the State.

Once the Attorney General receives thecomplaint, the Attorney General has 60days, plus any extensions granted, to file apleading with the court indicating theAttorney General’s intention to eitherproceed with the action or decline toproceed with the action. If the AttorneyGeneral proceeds with the action, theAttorney General will have primaryresponsibility for prosecuting the action,but the person bringing the action willhave the right to continue as a party to theaction. If the Attorney General declines toproceed with the action, the seal will belifted and the person bringing the actionmay proceed with the action. After thecomplaint is unsealed and served on thedefendant, the defendant shall file ananswer to the complaint in accordancewith the rules of the court.

With notice to the person bringing theaction and an opportunity for that personto have a hearing, the Attorney Generalmay move to dismiss the action for goodcause shown. No other person mayintervene in the private person’s actionbrought under the NJFCA, except theState, and no other person may bring arelated action based on the facts underly-ing the pending NJFCA action.

54

3. More specifically, the proposed NJFCA provides that a person violates the NJFCA if he:

a. Knowingly presents or causes to be presented to an employee, officer or agent of the State, or to any contractor, grantee, or other recipient of State funds, afalse claim for payment or approval;

b. Knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the State;

c. Conspires to defraud the State by getting a false claim allowed or paid by the State;

d. Has possession, custody, or control of public property or money used or to be used by the State and knowingly delivers or causes to be delivered lessproperty than the amount for which the person receives a certificate or receipt;

e. Is authorized to make or deliver a document certifying receipt of property used or to be used by the State and knowingly makes or delivers a receipt that falsely representsthe property used or to be used;

f. Knowingly buys, or receives as a pledge of an obligation or debt, public property from any person who lawfully may not sell or pledge the property; or

g. Knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money orproperty to the State.

4. Under certain circumstances, where the defendant cooperates before he is aware of an existing investigation, the court may reduce the treble damages to notless than twice the amount of damages which the State sustains and may waive the civil penalty.

New Jersey Legislature Takes Aim at Fraud and Abuse in the Medicaid Program

Financial Incentive to the StateIn the Deficit Reduction Act of 2005

(DRA), Congress gave the states a financialincentive to pass a state false claims act.Section 6031 of the DRA provides the statea 10% increase in the state share of anyrecovery. Medicaid is a state administeredhealth insurance program funded by boththe state and federal government. If, forexample, the state and federal governmenteach pay 50% of the cost of the program,under the DRA provision, the state wouldreceive 60% and the federal government40% of any recovery. The state would paythe relator, the person filing the suit onbehalf of the state, between 10% to 15% ofthe recovery, thus negating the differentialprovided by the financial incentive. The statewill benefit from the DRA provision if thelaw results in cases that would haveotherwise gone undetected. Nonetheless, ifthe Attorney General brings the suit onbehalf of the State, Section 6031 of theDRA does provide an increased recovery toour Medicaid program.

II. Medicaid ProgramIntegrity and Protection Act

The Medicaid Program Integrity andProtection Act (MPIPA) would centralizefraud recovery efforts by establishing anindependent Office of Medicaid InspectorGeneral (OMIG). The OMIG would beresponsible for preventing, detecting, andinvestigating fraud and abuse and coordi-

nating the anti-fraud efforts of all Medicaidfunded state agencies. These efforts arecurrently divided amongst various divisionsand sections in the Department of HumanServices (DHS) and the Department ofHealth and Senior Services (DHSS). Underthe MPIPA, these efforts would beconsolidated in the OMIG.

LocationAlthough the Office of the Medicaid

Inspector General will be located withinthe Department of Human Services(DHS), the office will be independent ofany supervision or control by DHS.5 Onceestablished, the OMIG will be the singleState office responsible for Medicaidprogram integrity. DHS will continue tooperate as the single State agency respon-sible for the general administration,setting of policies, and oversight of theMedicaid program.

Areas of ResponsibilityThe MPIPA sets forth various areas of

responsibility for the OMIG including:1. general functions, duties, powers,

and responsibilities;2. ensuring compliance with appli-

cable Medicaid standards andrequirements, identifying andreducing fraud and abuse, andimproving efficiency and effective-ness of Medicaid;

3. investigating allegations of Medicaidfraud and abuse and enforcingapplicable laws, rules, regulations,and standards; and 5. The MPIPA was partially vetoed by the

Governor and returned to the Legislature withrevisions, the most significant being the removalof the OMIG from DHS to the Office of theInspector General.

4. recovering improperly expendedMedicaid funds, imposing adminis-trative sanctions, damages orpenalties, negotiating settlements,and developing an effective thirdparty liability program.

ReportingUnder the Act, the Medicaid Inspector

General (Inspector General) shall report thefindings of audits, investigations, andreviews performed by the office and issuerecommendations for corrective or remedialaction to the Governor, the President ofthe Senate, the Speaker of the GeneralAssembly, and the entity at issue. TheInspector General shall also monitor theimplementation of those recommenda-tions. The Inspector General would berequired to provide periodic reports to theGovernor and to issue an annual report tothe Governor and to the Legislature.

Non-Lapsing Revolving FundThe MPIPA would establish a

“Medicaid Fraud Control Fund” as a non-lapsing revolving fund in the Departmentof Treasury. The fund shall be comprisedof an annual $3 million appropriationand monies recovered under the MPIPA.Funds from the Medicaid Fraud ControlFund must be used by the InspectorGeneral and the Medicaid Fraud ControlUnit for the exclusive purpose ofinvestigating and prosecuting Medicaidfraud claims.

John Krayniak, an Assistant AttorneyGeneral, is an 18-year veteran of the Divisionof Criminal Justice and has been the Chief of

OIFP’s Medicaid Fraud Control Unit for 13years. He previously served for eight years

as a Deputy District Attorney in the LosAngeles County District Attorney’s Office.

Sherry L. Wilson is a Deputy AttorneyGeneral in OIFP’s Medicaid Fraud Control

Unit. She previously represented the State ofNew Jersey in criminal appeals and has over

ten years of litigation experience.

56

Closing the Loopholes on Insurance Fraud

4. Ward v. Zelikovsy, 136 N.J. 516, 530 (1994).

5. DeAngelis, supra, 180 N.J. at 13.

6. Id. at 14; Ward, supra, 136 N.J. at 531.

7. DeAngelis, supra, 180 N.J. at 15.

8. Turf Lawnmower Repair v. Bergen Record Corp., 139 N.J. 392, 413 (1995), cert. den. 516 U.S. 1066(1996).

9. DeAngelis, supra, 180 N.J. at 13.

10. Patel v. Soriano, 369 N.J. Super. 192, 248 (App. Div.), certif. den. 182 N.J. 141 (2004).

11. Lamorte Burns & Co. v. Walters, 167 N.J. 285, 305-06 (2001) (internal citations omitted).

of fact are absolutely protected.4 Whethera false statement is one which couldconstitute defamation is a question of lawwhich is decided by the judge, not a jury.In making this determination, courtsconsider three factors. First, courtsconsider the fair and natural meaning ofthe statement. Generally, words thataccuse a person of committing a crime(except those in connection with litiga-tion) and words that subject a person tocontempt or disparage the person’sreputation are considered defamatory.5Second, courts consider whether thestatement is one of fact or opinion.Statements of pure opinion, as a matterof constitutional law, cannot constitutedefamation, while opinion statementsthat imply the existence of underlying“facts” which are false and defamatorymay be actionable.6 Third, the courtsconsider the listener’s reasonable interpre-tation of the statement in the context inwhich it was made to determine whetherthe statement was capable of a defama-tory meaning.7

With respect to the element of faultwhich the plaintiff must establish, NewJersey has imposed the “actual malice”standard when a statement is made by amember of the media and concerns eithera business which affects the public’s healthand safety or a business which is subjectto substantial government regulation.8To satisfy the actual malice standard, theplaintiff must establish by clear andconvincing evidence that the defendantpublished the statement knowing that itwas false, or with reckless disregard forwhether it was false.9 It appears to be anopen question whether the courts wouldrequire the plaintiff to show actual malicewhen a statement about such a businessis made by a private entity rather than bythe media. Also, while there are goodarguments that a health care provider’sbusiness both affects public health andsafety and is subject to substantialregulation, it might be more difficult toargue that other types of businesseswhich might be the subject of possiblydefamatory anti-fraud statements aresimilarly matters of public importance. Ifnot, then the mere negligence standard

might be all that is required of a plaintiff.Trade libel is similar to defamation.

Trade libel exists when a false statementcasts aspersions on one’s businessoperation, even if it does not defame anindividual’s character. Nonetheless, onestatement can form the basis for both tortclaims, and in the context of statementsconcerning potentially fraudulent conductin a commercial setting, that would likelybe the case. To prove trade libel, theplaintiff needs to prove that defendantmade a false statement derogatory toplaintiff ’s business, of a kind calculated tointerfere with his relations with others;that defendant communicated thestatement to a third party; that thestatement played a material and substan-tial part in leading others not to deal withthe plaintiff; that defendant knew thestatement was false or made it withreckless disregard for whether it was false;and that the statement caused plaintiffpecuniary damages. Damages are notpresumed in trade libel cases, as they can bein defamation cases involving statementsdeemed libelous as a matter of law.10

Finally, an action for tortious interfer-ence with existing contractual relations orwith reasonably anticipated businessrelations could be brought in response tothe sharing of information about potentialfraud among carriers who have or may havebusiness relations with the subject.

To prove its claim, plaintiff mustshow that it had a reasonable expecta-tion of economic advantage that waslost as a direct result of defendants’malicious interference, and that itsuffered losses thereby. Causation isdemonstrated where there is ‘proof

that if there had been no interferencethere was a reasonable probability thatthe victim of the interference wouldhave received the anticipated economicbenefit.’... Malice... means that harmwas inflicted intentionally and withoutjustification or excuse.... The conductmust be both ‘injurious and transgres-sive of generally accepted standards ofcommon morality or of law.’11

A hypothetical illustrates how thesetort claims, or other similar claims, mightbe applicable in the fraud informationsharing context. As a result of factsgathered in an investigation, a carriersuspects that a doctor may be committinghealth care claims fraud. In an effort tofurther the investigation, the carrier shareswith other carriers a summary version ofsome of the underlying facts and itsconclusion that the facts indicate that thedoctor may be committing claims fraud.This information sharing could well bebeneficial to all companies. The referringcarrier may be seeking information to helpconfirm or refute its suspicions. Forexample, the other carriers may haveclaims information which would helpestablish a pattern of suspect behavior.Or, the other carriers may have conductedinterviews with patients that would helpestablish or dispel the referring carrier’ssuspicions. The information sharing maybe beneficial to the other carriers as well, asthey would be alerted to the possibilitythat the doctor is submitting fraudulentclaims to them. As a result, those carrierswould begin to scrutinize claims fromthat doctor, and send them to theirSpecial Investigations Unit (SIU) ratherthan processing them for payment in thenormal course.

60

The doctor in question may thenexperience certain consequences as a resultof this information sharing, such as aninterruption or diminution of his or hercash flow, a delay in being approved as aprovider by a carrier, or other conse-quences. In addition, the increase in thenumber of claims being scrutinized byvarious SIUs would result in additionalpatients or other associates beingcontacted and interviewed about poten-tially fraudulent claims. In response, thedoctor may sue the referring carrier formaking the statements to the othercarriers, alleging that the statements werefalse and defamatory, constituted tradelibel, or tortiously interfered with existingor potential economic relations with hisassociates and his patients. This list is notmeant to be exhaustive, and the doctor’slawyers may well pursue additional legaltheories. But it is sufficient to illustratethe risks which have caused some carriersto refrain from sharing information aboutpotentially fraudulent conduct directlywith other carriers.12

Because such information sharingserves the public good by furthering thefight against insurance fraud, the lawprovides, in various places, immunitiesfrom civil liability for statements made inthe course of reporting fraud to govern-ment agencies or sharing informationabout potential fraud with other industryactors. Nonetheless, as discussed below,each of these immunities has its ownlimitations which must be kept in mind.

Existing Immunity ProvisionsThe free flow of information and the

expression of opinions, even harsh andcritical ones, play crucial roles in advancingimportant societal interests. Balancing thevalue of free communication with theneed for the State to provide redress to itscitizens whose reputations have beenfalsely tarnished, the New Jersey SupremeCourt has recognized both an absoluteprivilege and a qualified privilege indefamation-related actions.

Although defamatory, a statement willnot be actionable if it is subject to anabsolute or qualified privilege. Astatement made in the course ofjudicial, [quasi-judicial,] administrative,or legislative proceedings is absolutelyprivileged and wholly immune fromliability.13

The absolute privilege applies to anycommunication made in judicial, quasi-judicial, or administrative proceedings, bylitigants or other authorized participants,to achieve the objects of the litigation,and that have some connection or logicalrelation to the action.14 The absoluteprivilege is not limited to statementsmade in the courtroom or during theactual administrative proceeding itself. Itextends to all statements or communica-tions which have some connection orlogical relation to the proceeding.Whether the privilege applies is a questionof law to be decided by the judge.15

The requirement that the statementhas some connection or logical relation toa judicial, quasi-judicial, or administrativeproceeding has particular relevance in thecontext of anti-fraud information sharing.

12. See e.g., Yourman v. People’s Security Life Ins. Co., 992 F. Supp. 696 (D.N.J. 1998) (plaintiff sued insurer for defamation wheninsurer wrote to the Department of Banking and Insurance (DOBI) responding to plaintiff’s complaint. The letter recounted the facts ofplaintiff’s application for coverage, and expressed the opinion that the facts could support an insurance fraud referral); Feit v. Horizon BlueCross Blue Shield of New Jersey, 385 N.J. Super. 470 (App. Div. 2006) (plaintiff sued for defamation, malicious prosecution, and tortiousinterference with economic relations when insurer terminated plaintiff’s participating provider agreement and reported the termination to theBoard of Medical Examiners); Binkewitz v. Allstate Ins. Co., 222 N.J. Super. 501 (App. Div.), certif. den. 113 N.J. 378 (1988) (plaintiff suedfor defamation and tortious interference over statement insurer made in rejecting plaintiff as an adjuster for a fire loss claim).

13. Erickson v. Marsh & McLennan Co., 117 N.J. 539, 563 (1990) (citing Rainier’s Dairies v. Raritan Valley Farms, 19 N.J. 552, 558 (1955)).

14. Hawkins v. Harris, 141 N.J. 207, 216 (1995).

15. Ibid.

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Closing the Loopholes on Insurance Fraud

In Hawkins v. Harris,16 the SupremeCourt ruled that the absolute privilege canapply to allegedly defamatory statementsmade by an insurance company’s investi-gators investigating the circumstances of amotor vehicle accident which is inlitigation, provided the other require-ments of the privilege are met. How-ever, the court ruled that it was unclearwhether the investigators’ statements towitnesses, alleging that the claimant wasan unfaithful spouse, bore any logicalrelation to the litigation. The SupremeCourt remanded the matter to the trialcourt to decide that issue.17

In Devlin v. Greiner,18 a husbandhired a private investigator to follow hiswife. The investigator gave the husband areport saying the wife regularly met withanother man in compromising circum-stances. Two months later, the husbandsued for divorce. The wife sued theinvestigator for defamation. The courtruled that there was a factual questionwhether an investigative report issued twomonths before litigation commenced wassufficiently connected to a judicial proceed-ing to be absolutely privileged. The courttherefore denied a motion to dismiss, andstated the immunity claim could berevisited following discovery.19 Therefore,the absolute privilege would not apply toanti-fraud information sharing amongcarriers when that information sharing isnot sufficiently connected to an existing orreasonably contemplated judicial, quasi-judicial, or administrative proceeding.Even when the privilege does apply,insurance carriers may need to undertakediscovery efforts and incur litigationexpenses to demonstrate the applicabilityof the privilege in cases where theconnection is not obvious.

When the absolute privilege doesapply, it bars all civil liability theories withthe sole exception of malicious prosecu-tion.20 The Supreme Court has reasonedthat “[i]f the policy, which in defamationactions affords an absolute privilege orimmunity to statements made in judicialor quasi-judicial proceedings, is really tomean anything then we must not permitits circumvention by affording an almost

equally unrestricted action under adifferent label.”21 The Court, however,ruled that the privilege does not bar amalicious prosecution action because theexacting pleading and proof requirementsfor that type of action provide adequateprotection to the interest in free access tothe courts and administrative agencies,while allowing redress to the innocentdefendant subjected to a lawsuit which isitself wrongful.22

Even if a defamatory statement is notprotected by the absolute privilege, it maybe protected by the qualified privilege.The New Jersey Supreme Court hasdefined the qualified privilege as follows:

A communication ‘made bona fideupon any subject matter in which theparty communicating has an interest,or in reference to which he has a duty,is privileged if made to a person havinga corresponding interest or duty,although it contains criminatory matterwhich, without this privilege, would beslanderous and actionable[.]’23

The qualified privilege provides lessprotection than the absolute privilegebecause the qualified privilege can beovercome if the plaintiff can prove byclear and convincing evidence that thespeaker knew the defamatory statementwas false or acted in reckless disregard of itsfalsity.24 If the qualified privilege applies, itprotects against all tort theories with theexception of malicious prosecution.25

It would seem clear that statementsmade in a good faith effort to share

information about potential fraudschemes would be protected by thequalified privilege even if the statementsturn out to be false. All insurance carriersshare an interest in detecting and prevent-ing insurance fraud. Indeed, auto andhealth carriers are required by law toimplement State-approved fraud detec-tion plans and to maintain full-time SIUsto investigate possible fraud.26 State-ments made between fraud investigatorsfor the purpose of sharing or solicitinginformation relevant to a potential fraudwould be appropriate communicationsmade to further the legitimate interests ofall concerned. Therefore, such good faithstatements would be privileged from tortsuits. Nonetheless, plaintiffs can seek todefeat the privilege by showing that thestatement was made with knowledge thatit was false or in reckless disregard to itsfalsity. While the plaintiff bears a heavyburden of proof on this issue, still, carrierswould be required to incur litigationexpenses in responding to such a claim.

The Insurance Fraud PreventionAct and the Motor Vehicle Theftand Motor Vehicle InsuranceFraud Reporting Immunity Act

The Insurance Fraud Prevention Actprovides:

No person shall be subject to civilliability for libel, violation of privacyor otherwise by virtue of the filing ofreports or furnishing of otherinformation, in good faith andwithout malice, required by this

62

16. 141 N.J. 207 (1995).

17. Id. at 219, 222.

18. 147 N.J. Super. 446 (Law Div. 1977).

19. Id. at 460. The court did state that if the absolute immunity did not apply, the qualified privilege,discussed next, would apply. Ibid.

20. Peterson v. Ballard, 292 N.J. Super. 575, 582 (App. Div.), certif. denied 147 N.J. 260 (1996); Rubertonv. Gabage, 280 N.J. Super. 125, 134 (App. Div.), certif. denied 142 N.J. 451 (1995).

21. Ranier’s Dairies, supra, 19 N.J. at 564.

22. Ibid.

23. Marsh & McLennan Co., supra, 117 N.J. at 563 (internal citation omitted).

24. Id. at 565.

25. Binkewitz v. Allstate Ins. Co., supra, 222 N.J. Super. at 516.

section or required by [OIFP] as aresult of the authority conferred uponit by law.27

Thus, carriers enjoy an absoluteimmunity from civil liability under anytheory for good faith statements made toOIFP in the course of a referral or inresponse to any requirement by OIFP.Similarly, under the Motor Vehicle Theftand Motor Vehicle Insurance FraudReporting Immunity Act,28 insurers, theiragents and employees are absolutelyimmune from “any civil liability in a causeof action of any kind” for releasinginformation about automobile theft orautomobile insurance fraud to a govern-ment agency.29 Nonetheless, thesestatutory immunities do not on their faceextend to information sharing from onecarrier directly to another.

The InsuranceInformation Practices Act

The Insurance Information PracticesAct30 regulates insurance companies’collection, use, and disclosure of informa-tion in connection with life, health,disability, and property-casualty insurance.The act authorizes insurers to shareinformation about individual, naturalpersons for anti-fraud purposes withother insurers and with insurance supportorganizations. It provides:

An insurance institution, agent orinsurance-support organization[31]shall not disclose any personal orprivileged information about anindividual collected or received in

connection with an insurance transac-tion unless the disclosure is:....

c. To an insurance institution, agent,insurance-support organization orself-insurer, if the informationdisclosed is limited to that which isreasonably necessary:

(1) To detect or prevent criminalactivity, fraud, material misrepresentationor material nondisclosure inconnection with insurancetransactions[.]32

Information disclosure is also permittedto a law enforcement or other govern-ment agency to prevent or prosecute anillegal act; in response to an administrativeor judicial subpoena or order; or asotherwise permitted by law.33

Under the act, immunity from civilcauses of action arising from disclosuresmade in accordance with the act isprovided thusly:

No cause of action in the nature ofdefamation, invasion of privacy ornegligence shall arise against any personfor disclosing personal or privilegedinformation in accordance with this act,nor shall such a cause of action ariseagainst any person for furnishingpersonal or privileged information toan insurance institution, agent orinsurance-support organization; exceptthis section shall provide no immunityfor disclosing or furnishing falseinformation with malice or willfulintent to injure any person.34

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26. N.J.S.A. 17:33A-15; N.J.A.C. 11:16-6.4.

27. N.J.S.A. 17:33A-9b.

28. N.J.S.A. 17:23-8 et seq.

29. N.J.S.A. 17:23-15.

30. N.J.S.A. 17:23A-1, et seq.

31. “Insurance-support organization” is defined as an entity which regularlycollects information about natural persons to provide to carriers for the purposeof detecting or preventing fraud, misrepresentation, or nondisclosure. N.J.S.A.17:23A-2m.

32. N.J.S.A. 17:23A-13c.

33. N.J.S.A. 17:23A-13f, g, h.

34. N.J.S.A. 17:23A-21.

Closing the Loopholes on Insurance Fraud

The most significant limitations on thisexisting statutory immunity concern thecauses of action which are precluded, andthe definitions of the statutory terms“individual,” “personal information,” and“privileged information.” The immunityprecludes actions “in the nature of ”defamation, invasion of privacy, ornegligence. This wording raises the questionof whether some causes of action are notprecluded because they are not in the natureof defamation, invasion of privacy, ornegligence. It could certainly be argued,following Binkewitz v. Allstate Ins. Co. andsimilar cases discussed above, that if theimmunity is to serve its purpose, it mustbar all theories of recovery except maliciousprosecution. But, on the other hand, courtsdo not lightly extend absolute privileges.35

This section of the statute has not beencited in a reported court decision, and so itsapplicability to theories arguably differentfrom defamation, invasion of privacy, andnegligence remains an open question.

The act applies to carriers writinginsurance that is “primarily for personal,family or household needs rather thanbusiness or professional needs[.]”36 Itregulates the disclosure of informationabout an “individual,” which is defined tomean a natural person who is an insured,an applicant, or a claimant.37 At least on itsface, it is questionable whether the statuteprovides immunity for sharing informa-tion about persons who are not them-selves insureds, applicants, or claimants,such as medical providers asserting rightsas assignees of the insured.

The statute provides immunity forsharing “personal information” and“privileged information.” “Personalinformation” is defined as informationfrom which judgments can be made aboutan individual’s character or characteristics.38

That definition seems to contemplateunderwriting information, and thereforewould be relevant in application fraudcases. “Privileged information” is definedas information which relates to a claim forbenefits or to civil or criminal proceedingsinvolving an individual, and which wasgathered in connection with or in reason-

able anticipation of such a claim forbenefits or civil or criminal proceedings.39

These definitions, and the wording ofSection 13’s authorization to discloseinformation “about an individual” donot expressly authorize an insurancecompany to share information aboutcorporate entities suspected of commit-ting fraud. Nonetheless, the act doesprovide immunity for sharing anti-fraudinformation about individuals. Thus,while not perfect, the existing law providesan immunity which carriers can use to shareanti-fraud information about individualsamong themselves, until a more compre-hensive provision is adopted.

National Insurance Crime BureauUnder N.J.S.A. 17:23-19a and its

implementing regulations, every insurertransacting automobile insurance mustreport thefts of motor vehicles or theirmajor components and losses involvingmotor vehicle salvage to the NationalInsurance Crime Bureau (NICB).40 Theinsurer, NICB, and law enforcement areauthorized to cooperate and exchangeinformation. The statute also provides:

An insurer, a law enforcement agency,or the [NICB], or their agents oremployees, shall not be subject to civilliability in a cause of action of anykind for conducting an investigationor providing or receiving any informa-tion which is required to be reportedunder subsection a. of this section.41

While providing broad immunity forinformation shared in cooperation withNICB, this immunity provision does notaddress information sharing directly betweencarriers without NICB’s involvement.

Proposed Amendment to the Insur-ance Fraud Prevention Act

As discussed above, New Jerseycommon law and statutory law currentlyprovide a patchwork of immunityprovisions shielding some but not allanti-fraud information sharing frompotential civil lawsuits. Perhaps as a resultof the gaps in protection from potentially

64

expensive civil litigation, some carriershave been reluctant to share anti-fraudinformation directly with other carriers.Therefore, the immunity provision in theInsurance Fraud Prevention Act shouldbe amended to eliminate the gaps inprotection.

The Insurance Fraud Prevention Actcurrently provides immunity from civilliability in N.J.S.A. 17:33A-9b. Thatsection was adopted as part of theoriginal Insurance Fraud Prevention Actin 1983 and has not been updated since.42

It was based on the National Associationof Insurance Commissioners’ (NAIC)Insurance Fraud Prevention Model Act asit existed at that time. Nonetheless, theNAIC Insurance Fraud Prevention ModelAct has been updated several times sincethen. In particular, in 1995, the NAICmodel act was amended to specificallyprovide immunity for exchanges ofinformation between insurers.43 Theimmunity section of the NAIC InsuranceFraud Prevention Model Act currentlyreads as follows:

A. There shall be no civil liabilityimposed on and no cause of actionshall arise from a person’s furnishinginformation concerning suspected,anticipated or completed fraudulentinsurance acts, if the information isprovided to or received from:

(1) The commissioner or thecommissioner’s employees, agentsor representatives;(2) Federal, state, or local lawenforcement or regulatory officialsor their employees, agents orrepresentatives;(3) A person involved in theprevention and detection offraudulent insurance acts or thatperson’s agents, employees orrepresentatives; or(4) The NAIC or its employees,agents or representatives.

B. Subsection A of this section shallnot apply to statements made withactual malice. In an action brought

65

against a person for filing a report orfurnishing other informationconcerning a fraudulent insurance act,the party bringing the action shallplead specifically any allegation thatSubsection A of this section does notapply because the person filing thereport or furnishing the informationdid so with actual malice.C. This section does not abrogate ormodify common law or statutoryprivileges or immunities enjoyed by aperson described in Subsection A ofthis section.44

The immunity provision in NewJersey’s IFPA has not been updated toaddress the shortcomings in the existingversion which the National Associationof Insurance Commissioners hasidentified over the past 23 years. As aresult, the State’s announced public policyto “confront aggressively the problem ofinsurance fraud”45 suffers when anti-fraudinformation sharing is restricted. TheLegislature should update the immunityprovision in the IFPA to incorporate therecommendations of the NAIC and, inthat way, encourage the free yet respon-sible flow of information directly betweenand among persons engaged in thedetection and prevention of fraud.Accordingly, OIFP proposes that N.J.S.A.17:33A-9 be amended to read as follows:

35. See Devlin v. Greiner, supra, 147 N.J. Super. at 456.

36. N.J.S.A. 17:23A-1, -2n (defining “insurance transaction”).

37. N.J.S.A. 17:23A-2j, -13.

38. N.J.S.A. 17:23A-2t.

39. N.J.S.A. 17:23A-2w.

40. N.J.S.A. 17:23-19; N.J.A.C. 11:16-2.1, et seq.

41. N.J.S.A. 17:23-19d.

42. L. 1983, c. 320, sec. 9.

43. 1995-1 NAIC Proceedings 50, 89-90. The model act was also amended at that time to require theplaintiff to plead with specificity any allegations that a false statement was made with actual malice, whichis necessary to overcome the immunity. This was done so that the use of notice pleading would notdeprive persons reporting fraud of the benefit of immunity by forcing them to engage in discovery to refutean allegation of actual malice. Ibid.

44. NAIC Insurance Fraud Prevention Model Act at sec. 7.

45. N.J.S.A. 17:33A-2.

a. [no change.]b. There shall be no civil liabilityimposed on and no cause of actionshall arise from a person’s furnishinginformation concerning suspected,anticipated or completed fraudulentinsurance acts, if the information isprovided to or received from:

(1) The Office of the InsuranceFraud Prosecutor, the commissioner ortheir employees, agents orrepresentatives;(2) Federal, state, or local lawenforcement or regulatory officialsor their employees, agents orrepresentatives;(3) A person involved in theprevention and detection offraudulent insurance acts or thatperson’s agents, employees orrepresentatives; or(4) The National Association ofInsurance Commissioners, theNational Insurance Crime Bureau,an insurance support organizationas defined in N.J.S.A. 17:23A-2, ortheir employees, agents orrepresentatives.

c. Subsection b. of this section shallnot apply to statements made withactual malice. In an action broughtagainst a person for filing a report orfurnishing other informationconcerning a fraudulent insurance act,the party bringing the action shallplead specifically any allegation thatsubsection b. of this section does notapply because the person filing thereport or furnishing the informationdid so with actual malice.d. This section does not abrogate ormodify common law or statutoryprivileges or immunities enjoyed by aperson described in subsection b. ofthis section.e. [ existing subsection c. redesignatedas subsection e.]

John Kennedy is an Assistant AttorneyGeneral serving as a Special Assistant tothe Insurance Fraud Prosecutor,concentrating on civil matters involvinglicensed medical providers. Previously, hewas Section Chief in OIFP’s criminaldivision for three years, overseeing allcriminal prosecutions except Medicaidcases. He has been with the Division ofCriminal Justice since 1987.

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AUTO INSURANCE FRAUDCriminal Use of “Runners”State v. Irwin B. Seligsohn, et al.

Racketeering and conspiracy charges werefiled against two Essex County lawyers, theirlaw firm, and 28 other individuals as part ofan ongoing insurance fraud investigation tar-geting Health Care Claims Fraud and the ille-gal use of “runners.” The racketeering andconspiracy charges represent the first timethe Division of Criminal Justice - Office ofthe Insurance Fraud Prosecutor (OIFP) hasused New Jersey’s Racketeering Influenced &Corrupt Organization (RICO) statute toprosecute an attorney and a law firm forHealth Care Claims Fraud, Criminal Use ofRunners, and related insurance fraud crimes.

The 20-count superseding State GrandJury indictment charged Irwin B. Seligsohn,his Essex County law firm, five “runners,”and 23 phony accident claimants variouslywith criminal racketeering, conspiracy tocommit racketeering, auto insurance relatedHealth Care Claims Fraud, Criminal Use ofRunners, theft by deception, and tax fraud. was charged with con-spiracy and filing or preparing a false orfraudulent New Jersey tax return. The super-seding State Grand Jury indictment allegesthat the lawyers and their law firm engagedin a scheme of paying “runners” to solicitand obtain automobile accident clients forthe law firm in order to substantially increasethe amount of money obtained through in-surance claims, lawsuits, and related actions.

The indictment alleges that, between Oc-tober 30, 1993 and September 15, 2005,Irwin B. Seligsohn, andthe law firm of Goldberger, Seligsohn &Shinrod, P.A., 735 Northfield Avenue, WestOrange, Essex County, conspired with othersto pay “runners” to solicit other individualsto participate in staged automobile accidentsso that Personal Injury Protection (PIP) andother insurance claims could be submitted toinsurance companies. Additionally, the in-dictment alleges that the defendants improp-erly accounted for the payments made to the“runners” and, as a result, it is charged thatSeligsohn, and the law firm vio-lated various New Jersey tax statutes.

The indictment charges the “runners” withillegally receiving payments for acting as“runners” by soliciting clients, with violatingState income tax laws, and with assisting inthe submission of phony insurance claimsknowing that the accidents were staged and

that no one was injured. The other defen-dants named in the State Grand Jury indict-ment were alleged to be the purported insur-ance claimants. They were charged withHealth Care Claims Fraud for assisting in thesubmission of the phony insurance claims.

The indictment also seeks the forfeitureof an estimated $5 million in financial assetsobtained by the law firm of Goldberger,Seligsohn & Shinrod, P.A., as a result of thealleged illegal insurance fraud scheme. Theindictment seeks proceeds such as invest-ments, bank accounts, office equipment,real estate, and other assets obtained fromengaging in theft by deception, Health CareClaims Fraud, Criminal Use of Runners,and tax fraud.

Among the persons charged were:The Lawyers

■ Irwin B. Seligsohn, Esq., was charged withconspiracy to commit racketeering, rack-eteering, conspiracy to commit HealthCare Claims Fraud, theft by deception,conspiracy, Criminal Use of Runners, andfiling or preparing a false or fraudulentNew Jersey tax return;

■ The law firm of Goldberger, Seligsohn &Shinrod, P.A, was charged with conspiracyto commit racketeering, racketeering, con-spiracy, theft by deception, Criminal Useof Runners, Health Care Claims Fraud,and filing or preparing a false or fraudu-lent New Jersey tax return.The “Runners,” Claimants, and Others

■ Louis Campbell; Edward Campbell a/k/aEdward Campbell, Jr.; Edward Campbell,Sr., a/k/a Reverend Campbell; RichardWilliams; and Damon Brown werecharged with conspiracy to commit rack-eteering, racketeering, conspiracy, HealthCare Claims Fraud, theft by deception,and Criminal Use of Runners. EdwardCampbell was additionally charged withfailure to pay or turn over taxes.To date, 12 defendants have entered guilty

pleas in connection with this alleged illegalscheme. The remaining defendants’ cases arepending trial. Among the developments inthis case during 2006 were:

On September 19, 2006, Louis Campbellwas arrested by OIFP investigators andcharged with tampering with a witness and

informant. The case is pending.On September 8, 2006, Kasim Nash

pled guilty to conspiracy and Health CareClaims Fraud. Sentencing is pending.

On August 1, 2006, Sharon Blanding wasarrested on a bench warrant and bail was setat $10,000. On September 8, 2006, Blandingpled guilty to conspiracy and Health CareClaims Fraud. She will be sentenced in 2007.

On July 27, 2006, Damon Brown pledguilty to conspiracy to commit racketeeringand Health Care Claims Fraud. Brown ispending sentencing in 2007.

On June 30, 2006, Alonzo Goulbournepled guilty to Health Care Claims Fraud. OnAugust 1, 2006, the court sentenced him tothree years in state prison.

On May 5, 2006, Bobbie Campbell sur-rendered himself to the court and the judgeset bail at $35,000. Bobbie Campbell’s case ispending trial.

On April 19, 2006, Janelle Wilson, IeshaHarris, and Javiena McDonald pled guilty toconspiracy and Health Care Claims Fraud.On June 30, 2006, the court sentenced Wil-son, Harris, and McDonald to two years pro-bation, ordered them each to pay a $1,500civil insurance fraud fine and ordered themto perform 50 hours of community service.

On April 19, 2006, Pamela Rogers pledguilty to conspiracy and Health Care ClaimsFraud. On June 19, 2006, the court sen-tenced her to two years probation and or-dered her to pay a $1,500 civil insurancefraud fine.

On April 12, 2006, Patrice Woodson,Rhonda Evans, and Angelique Pickett pledguilty to conspiracy and Health Care ClaimsFraud. On June 30, 2006, the court sen-tenced Woodson and Pickett to two yearsprobation and ordered them each to pay a$1,500 civil insurance fraud fine and perform50 hours of community service. On July 12,2006, the court sentenced Evans to twoyears probation and ordered her to pay$2,000 in restitution and a $1,500 civil insur-ance fraud fine.

On February 6, 2006, OIFP investiga-tors arrested Edward Campbell, Sr., a/k/aReverend Campbell. The arrest was predi-cated on the fact that the court issued abench warrant on January 17, 2006, forCampbell’s failure to appear at a pre-arraign-ment conference on the racketeering indict-ment. Campbell was arrested at the office ofhis probation officer. Campbell had been

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Fraudulent PIP Insurance Claimsby Health Care ProvidersState v. Franca DiLisio, et al.

A State Grand Jury returned two indict-ments charging Dr. Franca DiLisio, a licensedchiropractic physician, and seven others withHealth Care Claims Fraud, Criminal Use ofRunners, theft, and attempted theft by de-ception. DiLisio was also charged with mis-conduct by a corporate official. All thecharges arise from allegations that the defen-dants staged accidents for the purpose ofsubmitting phony PIP insurance claims tofive insurance carriers, or that automobileinsurance companies were billed for boguschiropractic treatments.

The State alleged in the first indictmentthat, between May 1,1998 and October 4,2000, Franca DiLisio arranged staged acci-dents with the assistance of “runners”Gerard Blanc and Rolando Pierre. A “runner”is a person who is paid to procure patients orclients for licensed professional service pro-viders so that insurance claims can be submit-ted. The State alleged that the accidents werestaged so DiLisio could treat the occupants ofthe vehicles for injuries they never sustained,and then bill insurance carriers for PIP insur-ance claims. The defendants submitted claimsto Allstate Insurance Company, Selective In-surance Company, G.U.F.A.C. Insurance Com-pany, and Colonial Penn Insurance Companyfor chiropractic treatments on 302 separatedates when the “patients” had not even ap-peared for the treatments. The claims totaledapproximately $36,380, of which $3,435 waspaid by insurance carriers.

In the second indictment, the Statecharged Marie Amay, Mimose Pierre, and

with Health Care Claims Fraudand attempted theft by deception for actingas passengers in staged accidents and generat-ing phony medical treatment claims. DiLisioallegedly submitted 16 PIP insurance claimsfor these defendants to Allstate InsuranceCompany, Selective Insurance Company, Co-lonial Penn Insurance Company, Crawford

Insurance Company, and Ohio Casualty In-surance Company totaling $65,153. The in-surance companies did not pay any of the 16PIP claims and some of the cases are pend-ing in civil court and/or arbitration. MarieAmay and were previously ad-mitted into the Pretrial (PTI) Program1 andordered to each perform 50 hours of com-munity service. A bench warrant was issuedfor Pierre’s arrest. He is currently a fugitive.

On June 14, 2006, DiLisio pled guilty totheft. On July 27, 2006, the court sentencedher to two years probation and ordered herto pay $3,400 in restitution to Allstate Insur-ance Company. The criminal cases as to theremaining defendants are pending trial.State v. Eugene Williams a/k/a Carroll Williams

On August 21, 2006, an Essex CountyGrand Jury returned an indictment chargingEugene Williams, a/k/a Carroll Williams,with Health Care Claims Fraud and con-spiracy. According to the indictment, on Feb-ruary 10, 2000 and September 5, 2001, Will-iams conspired with others to commit healthcare claims fraud. The State alleged that Wil-liams, a chiropractic physician licensed in theState of New Jersey, practiced chiropracticmedicine at the LaGuardia Primary HealthCare Center in East Orange, and submittedhealth care insurance claims on behalf offour purported patients. The purported pa-tients were undercover Newark police offic-ers and undercover OIFP investigators. TheState alleged that Williams caused PIP billsto be submitted to Parkway Insurance Com-pany for chiropractic and other services notrendered to the purported patients in the ap-proximate amount of $21,481. Parkwaypaid approximately $19,494 of those PIPinsurance bills.

LaGuardia Primary Health Care Centerwas a chiropractic medical facility ownedand operated by Dr. LeClerc Addison.Addison previously was sentenced to fiveyears probation conditioned on serving 364days in county jail as part of OIFP’s investi-gation of PIP fraud.

Fraudulent Automobile “Give Up”and Theft ClaimsState v. Harry J. Torella

On January 6, 2006, the court admittedHarry J. Torella into the Pretrial Intervention(PTI) Program conditioned upon him paying$1,166 in restitution and paying a $5,000 civilinsurance fraud fine. Torella pled guilty to anAccusation charging him with InsuranceFraud. Torella allegedly knowingly reported tothe Island Heights Police Department andPrudential Insurance Company that someonestole his 1997 Chrysler Sebring, knowing thatthe car was not stolen. Torella allegedly re-ported the false theft so that he could file afraudulent auto theft insurance claim.State v. Sandra Rodriguez, et al.

On November 6, 2006, JonathanRodriguez pled guilty to arson. On Decem-ber 8, 2006, the court sentenced him to 120days in county jail and ordered him to pay a$5,000 civil insurance fraud fine. On January13, 2006, the court sentenced SandraRodriguez to one year probation and orderedher to pay a $5,000 civil insurance fraud fine.Sandra Rodriguez pled guilty to arson withpurpose to collect insurance proceeds.

A Cumberland County Grand Jury re-turned an indictment charging SandraRodriguez and her nephew, JonathanRodriguez, with conspiracy, aggravated ar-son, attempted theft by deception, tamperingwith public records or information, arson,and falsifying records. According to the in-dictment, Sandra Rodriguez and JonathanRodriguez allegedly conspired to dispose of a2002 Chevrolet Cavalier and submit a falseautomobile insurance theft claim.

The State alleged that Sandra Rodriguezfalsely reported to the Vineland Police De-partment that someone stole her ChevroletCavalier. She also allegedly reported the theftto Rutgers Casualty Insurance Company. TheState further alleged that JonathanRodriguez took the Chevrolet Cavalier fromSandra Rodriguez and set it on fire in Buena

1. Pretrial Intervention (PTI) is a diversionary program created by statute and court rule. The Legislature established that it is the public policy of the State todivert certain defendants from the criminal justice system when, among other factors, diversion will serve to remove cases from the criminal court in order tofocus resources on more serious matters or more dangerous defendants, or PTI supervision will suffice to deter that particular defendant from future criminal-ity. N.J.S.A. 2C:43-12a. A defendant is admitted to PTI upon the recommendation of the PTI program director and the consent of the prosecutor. The pro-gram director and the prosecutor are required to consider, and base their decisions on, the defendant’s amenability to correction, responsiveness to rehabilita-tion, and the nature of the offense. Id. at -12b,e; PTI Guideline 3. If a defendant is admitted to PTI, the criminal prosecution is suspended while the defendantundergoes the supervision or rehabilitation required by the PTI program staff. The judge may order restitution as part of the PTI program. If the defendant suc-cessfully completes the program, the criminal charge is dismissed. If the defendant fails to complete the program, the criminal prosecution resumes.N.J.S.A. 2C:43-13; R. 3:28.

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Vista Township so that a claim could be sentto Rutgers Casualty. Rutgers Casualty deniedthe automobile theft insurance claim and re-ferred the matter to OIFP for investigation.State v. Monique S. Everett, et al.

A Passaic County Grand Jury returned anindictment charging Monique S. Everett,Javin Ward, James Westfield, and RobertWayne Williams with conspiracy and theft bydeception. The State also charged Everettwith tampering with public records or infor-mation. According to the indictment,Westfield and Everett allegedly “gave up” a2000 Mitsubishi Mirage valued at $10,149 toWilliams and Ward. Westfield and Everettallegedly “gave up” the car to Williams sothat it could be concealed from law enforce-ment and they could submit a false insuranceclaim. Later, the car was allegedly reportedstolen to Encompass Insurance Company andthe phony auto theft claim was submitted.Williams was subsequently arrested in pos-session of the 2000 Mitsubishi Mirage by theMontville Police Department.

Everett previously pled guilty to conspiracyto commit theft by deception. The court ad-mitted her into the PTI Program conditionedupon her paying $1,018 in restitution to En-compass Insurance Company and performing75 hours of community service. Williams alsopled guilty to conspiracy. On February 28,2006, the court sentenced him to three yearsin state prison and ordered him to pay $1,018in restitution to Encompass Insurance Com-pany. On January 17, 2006, Javin Ward pledguilty to conspiracy. On May 9, 2006, thecourt sentenced him to probation for one yearand ordered him to pay $1,018 in restitution.On January 17, 2006, James Westfield alsopled guilty to conspiracy. On the same day, thecourt admitted him into the PTI Programconditioned upon him paying $1,143 in resti-tution and performing 75 hours of commu-nity service.State v. Manuel Molina

On March 9, 2006, the court sentencedManuel Molina to three years probation andordered him to pay a $5,000 civil insurancefraud fine. On January 25, 2006, Molina pledguilty to an Accusation charging him withInsurance Fraud. Molina admitted that hefalsely reported to the Newark Police De-partment and Allstate Insurance Companythat his 1997 Dodge Caravan had been sto-len in order to file a false insurance theftclaim. In fact, Molina knew that his DodgeCaravan had not been stolen.

State v. Maria Kernizan, et al.

On March 8, 2006, the court admittedMaria Kernizan into the PTI Program condi-tioned upon her performing 60 hours ofcommunity service and paying a $5,000 civilinsurance fraud fine. On February 22, 2006,the court admitted her son, LoubertBarthelemy, into the PTI Program condi-tioned upon him paying a $5,000 civil insur-ance fraud fine and performing 60 hours ofcommunity service. Kernizan andBarthelemy pled guilty on January 9, 2006,to conspiracy to commit theft by deception.

A Union County Grand Jury returned anindictment charging Kernizan and Barthelemywith conspiracy, attempted theft by decep-tion, and Insurance Fraud. According to theindictment, Kernizan and Barthelemy alleg-edly conspired to submit a phony automobiletheft claim to Clarendon National InsuranceCompany. The State alleged that Kernizansubmitted an Affidavit of Theft to ClarendonNational Insurance Company claiming thatshe last saw her 1993 Toyota 4-Runner inElizabeth on December 31, 2002. OIFP’s in-vestigation revealed that Kernizan andBarthelemy allegedly falsely reported to theNew York City Police Department that some-one stole the car on that date. Additional in-vestigation revealed that the New York De-partment of Sanitation tagged the vehicle as aderelict or abandoned vehicle in the Bronx onDecember 25, 2002, casting doubt onKernizan’s and Barthelemy’s alleged claim thatthe vehicle was last seen and stolen on or af-ter December 31, 2002. Clarendon Nationaldenied the claim and referred the matter toOIFP for investigation and prosecution.State v. Carlos Manuel Patela, et al.

On March 9, 2006, an Essex CountyGrand Jury returned an indictment charging

Carlos Manuel Patela and Rui Alberto Diaswith conspiracy to commit theft by decep-tion. According to the indictment, Patelaand Dias took possession of a 1985Chevrolet Corvette knowing that the ownerof the Corvette had reported the car stolento his insurance company.

The car was reported stolen to the insur-ance company in order that a phony automo-bile theft insurance claim could be filed bythe owner of the vehicle. Sentry InsuranceCompany paid the owner $7,083 as reim-bursement for the purportedly stolen car.The owner of the car was not charged in theindictment because he had previously beenprosecuted in Essex County for the phonyautomobile insurance theft claim.

On July 31, 2006, Dias pled guilty to con-spiracy. On October 16, 2006, the court sen-tenced him to three years probation and or-dered him to perform 100 hours of commu-nity service. On October 23, 2006, Patelapled guilty to conspiracy. On December 11,2006, the court sentenced him to two yearsprobation and ordered him to pay $7,083 inrestitution to Sentry Insurance Company.Patela was also ordered to perform 50 hoursof community service.State v. Steven Garcia

Following a probation violation, the courtterminated Steven Garcia’s probation andsentenced him on February 10, 2006, to fouryears in state prison. The court had sen-tenced Garcia to three years probation andordered him to pay a $1,000 criminal fine af-ter he pled guilty to attempted theft by de-ception. A Union County Grand Jury had re-turned an indictment that charged Garciawith attempted theft by deception, tamper-ing with public records or information, andfalse swearing. According to the indictment,Garcia allegedly submitted a fraudulent sto-len vehicle insurance claim to First TrentonIndemnity Company. Garcia allegedly re-ported that someone stole his 1999 Ford F-150 pickup truck. The truck was subse-quently recovered in a garage in Lebanon,Pennsylvania. An investigation revealed thatGarcia had been paying rent to keep thetruck in Pennsylvania. First Trenton, sus-pecting fraud, denied the claim and referredthe matter to OIFP for investigation.State v. Raymond Delgaudio

On May 26, 2006, the court admittedRaymond Delgaudio into the PTI Program.On March 27, 2006, Delgaudio pled guilty toan Accusation charging him with Insurance

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Fraud. Delgaudio allegedly admitted that hefiled a fraudulent stolen vehicle report withthe Demarest Police Department, claimingthat his 2002 Jeep Grand Cherokee had beenstolen out of his driveway. He subsequentlyallegedly submitted a fraudulent stolen ve-hicle claim to First Trenton Indemnity Com-pany, knowing that his vehicle had not beenstolen. First Trenton, suspecting fraud, de-nied the claim and referred the matter toOIFP for investigation.State v. Luisa Escobar-Echeverry, et al.

On May 10, 2006, the court admittedLuisa Escobar-Echeverry into the PTI Pro-gram and ordered her to pay a $3,000 civilinsurance fraud fine. Escobar-Echeverry pre-viously pled guilty to an Accusation chargingher with Insurance Fraud. On May 9, 2006,the court admitted Escobar-Echeverry’s boy-friend, Allex Angel, a/k/a Jans Londano,into the PTI Program and ordered him topay a $2,500 civil insurance fraud fine. Angelpreviously pled guilty to a separate Accusa-tion charging him with conspiracy. The Statealleged that Escobar-Echeverry falsely re-ported her 2003 Toyota stolen to the UnionCity Police Department and that she had ar-ranged with Angel to dispose of the vehiclebecause she could no longer afford the carpayments and the insurance payments. Shealso allegedly submitted a phony vehicletheft claim to Allstate Insurance Company.On the same day the vehicle was reportedstolen, it was found on fire in Pennsylvania.Angel allegedly paid $400 to another personto dispose of the car.State v. Randi Fleischman

On November 29, 2006, the New JerseySupreme Court heard oral argument in thiscase. On May 11, 2006, the New Jersey Su-preme Court granted the State’s Petition forCertification on the issue of whether five ormore false statements made by a claimant ina single document submitted in support ofone insurance claim can constitute the mostserious form of the crime of Insurance Fraud,a second degree offense. The case is pendingdecision by the Supreme Court. Previously,the Appellate Division upheld the MiddlesexCounty trial court’s dismissal of the chargeof Insurance Fraud as to Randi Fleischmanon the basis that Fleischman’s alleged con-duct did not constitute second degree Insur-ance Fraud.

A Middlesex County Grand Jury returnedan indictment on March 22, 2005, that

charged Fleischman with Insurance Fraud,attempted theft by deception, tamperingwith public records or information, and falseswearing. According to the indictment, be-tween November 1, 2003 and February 19,2004, Fleischman allegedly submitted aphony auto insurance theft claim to LibertyMutual Insurance Company. The State al-leged that Fleischman advised Liberty Mu-tual and the Edison Police Department thatsomeone stole her 2000 Chrysler Sebringwhile she was shopping at the Menlo ParkMall on December 5, 2003. An investiga-tion revealed that the Bureau of Fire Inves-tigations of the New York City Fire De-partment discovered the car burning inBrooklyn on November 27, 2003, castingdoubt on Fleischman’s alleged claim thather car had been stolen. Fleischman alleg-edly submitted a phony auto insurance theftclaim for $12,932. Liberty Mutual deniedthe claim and referred the matter to OIFPfor investigation.

This indictment is among the first inwhich the new crime of Insurance Fraud,which became effective June 9, 2003, wasused to charge a person who submitted afalse automobile theft claim. The trial judgein Middlesex County dismissed the InsuranceFraud count on August 4, 2005, on theground that the State did not or could notoffer evidence of five or more acts of insur-ance fraud within the meaning of the statutein order to elevate the charge to a second de-gree Insurance Fraud offense. Thus, accord-ing to the trial judge, the count was notproperly charged as a second degree crime.On March 20, 2006, the State petitioned theSupreme Court to review the case.Organized Car Theft Rings

OIFP initiated several investigations intogangs of car thieves and others who en-gaged in a series of automobile insurancetheft claims and organized auto theft rings.These investigations originated from sepa-rate investigative sources developed byOIFP through analysis of investigative dataand intelligence information. Through addi-tional investigation, 33 criminal targetswere identified, which targets were com-mon to these otherwise apparently unre-lated theft conspiracies.

Through criminal conspiracies describedbelow, the targets would traffic in automo-bile “give ups” by automobile owners, orwould otherwise steal automobiles. These“given up” stolen cars as well as the actual

stolen cars would be re-tagged and sold forfar below market value. Many of the carswere sold through use of the internet oneBay to innocent purchasers located nation-wide after they were stolen and re-tagged.These innocent purchasers face the risk oflosing the cars they purchased.

An automobile “give up” claim, alsoknown as an owner-initiated phony insur-ance theft claim, occurs when the owner ofan automobile voluntarily “gives up” the carto another for disposal and then submits afalse automobile insurance theft claim as ifthe car had been stolen. The owner is paidfor the purported theft by his insurance com-pany and the car can be re-tagged and sold.

A car is re-tagged when the Vehicle Identi-fication Number (VIN) plates are removedfrom the car so that the VIN can be changedto a VIN that does not correspond to a sto-len car. In that way, the true identity of thecar and the fact that it had been reportedstolen can be concealed, and the car can besold to an innocent purchaser, or otherwisedisposed of.

Through investigation, which included co-ordination with law enforcement in Pennsyl-vania and New York, OIFP uncovered evi-dence that automobile owners had “givenup” their cars so that they could be falselyreported stolen to insurance companies andinsurance claims could be submitted, as wellas evidence that members of a gang stolecars from a large auto mall (auto dealer-ship), as well as from other car dealershipsand locations. OIFP’s investigation in-volved an extensive covert infiltration ofthe several conspiracies, employment ofelectronic surveillance and physical surveil-lance, as well as the execution of searchand arrest warrants. Working in an under-cover capacity, OIFP investigators pur-chased 35 cars from several of the defen-dants. These recovered cars have a total ap-proximate value of $1.5 million. Thesecriminal initiatives are described below:Operation Steal-A-Deal/Sansone Motors

In total, 12 cars valued at over $600,000were stolen from the Sansone Route 1 AutoMall located on Route 1, Avenel, New Jer-sey. These cars were allegedly stolen bySansone employees, including Esmerdo Penaand Aneudy “Elvis” Ruiz, by taking keysfrom the dealership and giving those keys tocar thieves so the automobiles could bedriven off the lot after hours and sold. Inaddition to Pena and Ruiz, several individu-

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als were charged in this investigation fortheir roles in “giving up” vehicles in order tofile phony auto insurance theft claims. Thefollowing developments occurred in this op-eration in 2006:

On August 11, 2006, Esmerdo Pena pledguilty to an Accusation charging him withleader of an auto theft trafficking network.Pena admitted that, between June 13, 2004and November 18, 2004, as an organizer orsupervisor of an automobile theft traffickingnetwork, he conspired with several others tosteal automobiles from an automobile dealer-ship and to accept automobiles that were“given up” by their owners so that phony au-tomobile insurance theft claims could besubmitted to automobile insurance carriers.During the time period in question, Penawas an employee of Sansone Route 1 AutoMall and assisted in the theft of cars fromhis employer. He also participated in auto-mobile “give ups” with persons who wantedto “give up” their car, in order to submit aphony insurance theft claim, and, in somecases, purchase a new car. Pena is scheduledto be sentenced early in 2007.

On September 1, 2006, the court sen-tenced Aneudy “Elvis” Ruiz to four years instate prison and ordered him to pay $10,500in restitution to OIFP and a $3,500 civil in-surance fraud fine. On June 29, 2006, Ruizpled guilty to an Accusation charging himwith receiving stolen property and con-spiracy. Ruiz admitted that, between Octo-ber 2004 and January 2006, he was involvedin a conspiracy with others to steal cars andaccept owner initiated “give up” vehicles sothat auto insurance claims could be submit-ted. Ruiz admitted that at the time in ques-tion, he was employed as a salesman at Lin-coln Mercury/Mazda of the Sansone Route1 Auto Mall. Ruiz admitted that he stole thespare ignition keys for automobiles to be soldat Sansone and used them to steal vehiclesfrom the auto dealership. Additionally, Ruizadmitted to being involved in three owner“give up” auto thefts whereby he took carsfrom their owners so the owners could re-port them stolen and submit phony insurancetheft claims. Ruiz admitted to selling sevencars stolen from the auto dealership for a to-tal of $18,000 and also admitted to sellingthe three “give up” cars for a total of$1,500. On April 10, 2006, OIFP investiga-tors arrested Ruiz and charged him with be-ing a leader of an auto theft trafficking net-work, conspiracy, receiving stolen property,and theft by unlawful taking. The judge setbail at $100,000.

On August 4, 2006, the court sentencedRuben More to three years probation andordered him to pay up to $25,000 in restitu-tion to Liberty Mutual Insurance Company,$700 in restitution to OIFP, and a $3,000civil insurance fraud fine. On June 15,2006, More pled guilty to an Accusationcharging him with conspiracy and InsuranceFraud. More admitted that he falsely re-ported to the Elizabeth Police Departmentand to Liberty Mutual that his 2002 Buickhad been stolen when, in fact, he knew thatit had not been stolen. More also admittedthat he conspired with Marisa Mercuri toconfirm Mercuri’s false claim that her 2003Nissan Xterra had been stolen in Hillside.Mercuri is More’s girlfriend.

On August 4, 2006, the court admittedJose Diaz into the PTI Program conditionedupon him paying up to $29,865 in restitutionto GEICO Insurance Company, $1,000 inrestitution to OIFP, a $3,000 civil insurancefraud fine, and performing 60 hours of com-munity service. On June 28, 2006, Diaz pledguilty to Insurance Fraud. Diaz allegedlyfraudulently reported his 2004 Acura TL sto-len to the Elizabeth Police Department andalso allegedly fraudulently reported the theftto GEICO.

On October 12, 2006, Grzegorz Miekinapled guilty to an Accusation charging himwith Insurance Fraud. Miekina admitted thathe fraudulently reported his 2002 InfinitiQX4 stolen to the Linden Police Depart-ment and also fraudulently reported the theftto Liberty Mutual Insurance Company. He isscheduled to be sentenced in 2007.

On October 11, 2006, the court admittedGregory Urena-Disla into the PTI Programconditioned upon him paying $450 in restitu-tion and a $3,000 civil insurance fraud fine.On June 29, 2006, Urena-Disla pled guilty toan Accusation charging him with InsuranceFraud. Urena-Disla allegedly fraudulently re-ported his 2002 Acura CL stolen to thePerth Amboy Police Department and also

allegedly fraudulently reported the theft toAuto One Insurance Company.

On August 25, 2006, the court admittedWilimi Ruiz-Duran into the PTI Programconditioned upon him paying a $3,000 civilinsurance fraud fine. The court also orderedhim to pay $12,763 in restitution toGEICO Insurance Company and $500 inrestitution to OIFP. On June 15, 2006,Ruiz-Duran pled guilty to an Accusationcharging him with Insurance Fraud. Ruiz-Duran allegedly fraudulently reported his2000 Honda Accord stolen to the PerthAmboy Police Department and also alleg-edly fraudulently reported the theft toGEICO Insurance Company.

On April 10, 2006, OIFP investigatorsarrested Jerinardo Fernandez and chargedhim with conspiracy to commit InsuranceFraud, Insurance Fraud, theft by deception,tampering with a witness, and terroristicthreats. He was released on $100,000 bail.On November 30, 2006, Fernandez pledguilty to an Accusation charging him withInsurance Fraud and tampering with wit-nesses and informants. Fernandez admittedthat he gave his 2002 Honda Civic toEsmerdo Pena so that he (Fernandez) couldreport the vehicle stolen and collect the in-surance money. Fernandez also admitted thathe reported the vehicle stolen to First Tren-ton Indemnity Company. Finally, Fernandezadmitted that once he was notified he was atarget of an investigation, he threatenedPena and his family. Fernandez is scheduledto be sentenced in 2007.Operation Big Stash

OIFP’s investigation revealed that mem-bers of an auto theft gang frequently met ata restaurant parking lot to discuss thefts ofother vehicles, exchange stolen cars so thatthey could be picked up, re-tagged, andsold, and otherwise plan car thefts. The fol-lowing developments occurred in this op-eration in 2006:

On October 4, 2006, Artur Czubek pledguilty to an Accusation charging him withleader of an auto trafficking network.Czubek is scheduled to be sentenced in early2007. Czubek admitted that, between No-vember 22, 2004 and October 22, 2005, hewas involved in a conspiracy with others toeither steal cars or accept owner-initiated“give up” vehicles so that auto insuranceclaims could be submitted. Czubek was in-volved with the theft and resale of 13 cars.Nine of the cars were stolen, including some

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from automobile dealerships. Four of thecars were owner “give ups.” OIFP under-cover investigators purchased nine stolencars from Czubek for a total of $26,000. Thenine stolen vehicles have a total value of ap-proximately $562,000. OIFP undercover in-vestigators bought four owner “give ups”from Czubek for a total of $4,300. Thesefour owner “give ups” have a total value ofapproximately $133,000. OIFP investigatorsarrested Artur Czubek and charged him withconspiracy to commit receiving stolen prop-erty, receiving stolen property, leader of anauto trafficking network, and conspiracy tocommit Insurance Fraud.

On July 26, 2006, a Union County GrandJury returned an indictment chargingKrzysztof Sprysak, a/k/a Krzysztof Rumor,a/k/a Andrzej Komar, with conspiracy, re-ceiving stolen property, and fencing. Accord-ing to the indictment, Sprysak, also knownas Rumor, conspired with others to know-ingly receive stolen property and fence stolencars. The State alleged that Sprysak possesseda stolen 2003 BMW 330I. It is alleged thathe sold the car to an OIFP undercover inves-tigator. Although a 2003 BMW 330I has anapproximate value of $38,000, it was allegedthat Sprysak agreed to sell the car for muchless. Sprysak failed to appear at his arraign-ment on September 11, 2006. The judge is-sued a bench warrant for his arrest.

On October 25, 2006, a MiddlesexCounty Grand Jury returned an indictmentcharging Artur Lapinski with conspiracy, re-ceiving stolen property, and fencing. Accord-ing to the indictment, Lapinski conspiredwith persons, who were not further identi-fied in the indictment, to commit receivingstolen property and trafficking in stolenproperty. Specifically, it is alleged thatLapinski knowingly possessed a stolen 2005BMW M3. It is further alleged that Lapinskisold the stolen BMW to another person whowas acting in an undercover role on behalfof OIFP. It is also alleged that the 2005BMW M3 had been stolen from an auto deal-ership in Warwick, Rhode Island. The indict-ment also charges Lapinski in a separate con-spiracy. In that conspiracy, it is alleged thatLapinski agreed with other persons, whowere not identified in the indictment, tocommit Insurance Fraud. At trial, the Stateintends to prove that Lapinski committedInsurance Fraud in that he agreed with an-other person to sell an Infiniti QX4 so thatthe owner of the Infiniti QX4 could falselyreport it stolen to the insurance company.

On July 14, 2006, the court sentencedMonika Fijalkowska to two years probationconditioned upon her performing 75 hoursof community service. The court also or-dered her to pay $4,000 in restitution toOIFP, $48,437 in restitution to Allstate In-surance Company, and a $6,000 civil insur-ance fraud fine. On May 31, 2006,Fijalkowska pled guilty to Insurance Fraud.Fijalkowska admitted that she submittedphony insurance claims for two separatephony automobile thefts.

With respect to the first theft, Fijalkowskareported her 2001 BMW X5 as having beenstolen to the New York City Police Depart-ment. She admitted that she then submitteda claim to Allstate Insurance Company falselyclaiming that her car had been stolen. As partof the claim, she alleged that a camera and aPanasonic Home Surround System were alsostolen with an additional value of approxi-mately $1,200. Allstate paid her claim in theapproximate amount of $11,861.

With respect to the second phony insur-ance claim, Fijalkowska admitted that shereported a 2003 Audi A4 as having been sto-len to the New York City Police Depart-ment. She submitted a phony automobiletheft claim to Allstate Insurance Companyalleging that her car had been stolen. Allstatepaid Fijalkowska approximately $25,772 insettlement of her auto insurance claim. Inboth cases, Fijalkowska admitted that she“gave up” her car to another person who wasnot further identified.

On August 30, 2006, the court admittedJanina Komsta into the PTI Program. OnMay 31, 2006, Komsta pled guilty to an Ac-cusation filed in Union County charging herwith conspiracy to commit InsuranceFraud. Komsta allegedly conspired withMonika Fijalkowska to report Fijalkowska’s2003 Audi A4 stolen to the New York CityPolice Department.

On September 27, 2006, the court ad-mitted Desiree Gan into the PTI Programconditioned upon her paying $16,119 in res-titution to Liberty Mutual Insurance Com-pany and a $3,000 civil insurance fraud fine,and performing 60 hours of community ser-vice. On August 18, 2006, Gan pled guilty toan Accusation charging her with InsuranceFraud. Gan allegedly falsely reported to theNew York City Police Department that her1999 Mercedes Benz ML430 had been sto-len. Gan also allegedly falsely submitted astolen vehicle claim to Liberty Mutual Insur-ance Company, knowing her vehicle had notbeen stolen.

OIFP investigators previously arrestedRodamir Drozdzil and charged him with re-ceiving stolen property, stolen licenseplates, and possession of burglary tools.OIFP investigators also previously arrestedDaniel Sokolski and charged him with re-ceiving stolen property, stolen licenseplates, and possession of burglary tools.Both cases remain pending.Operation Jellystone

On December 12, 2006, OIFP investiga-tors arrested Jose Torres and charged himwith leader of auto theft trafficking net-work, certain persons not to have weapons,unlawful possession of a weapon, and viola-tion of the regulatory provisions relating tofirearms. The case is pending Grand Jury.State v. Erica Lee Silverstein

On November 9, 2006, the court admittedErica Lee Silverstein into the PTI Program.Silverstein pled guilty to an Accusation charg-ing her with attempted theft by deception.Silverstein allegedly falsely reported her 2002Nissan Sentra stolen to the North BrunswickPolice Department and subsequently allegedlyfiled a false vehicle theft claim with LibertyMutual Insurance Company. It is also allegedthat Silverstein’s vehicle was not stolen butthat she had given the keys to another personto dispose of the car so that a false insuranceclaim could be submitted.State v. Kathleen Natale Hughes

On December 1, 2006, the court admittedKathleen Natale Hughes into the PTI Programconditioned upon her paying a $2,000 civil in-surance fraud fine and performing 50 hours ofcommunity service. On October 2, 2006,Hughes pled guilty to an Accusation chargingher with attempted theft by unlawful taking.Hughes allegedly falsely reported to LibertyMutual Insurance Company that her 2004Nissan Quest had been stolen in Camden.

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State v. Walter Francis, et al.

On September 8, 2006, the court admit-ted Walter Francis into the PTI Programconditioned upon him paying $6,896 in resti-tution to New Jersey CURE Insurance Com-pany and a $1,000 criminal fine. He had pre-viously paid a $3,000 civil insurance fraudfine. On July 11, 2006, Francis pled guilty toan Accusation charging him with conspiracyand theft by deception. Francis allegedlyfalsely reported to the Jersey City Police De-partment and New Jersey CURE that his1998 Chevrolet Cavalier had been stolen,when, he had allegedly given the vehicle toMichael Steele so that Steele could disposeof the car.

On September 15, 2006, the court sen-tenced Michael Steele to two years probationand ordered him to pay a $1,000 criminalfine as well as a $2,000 civil insurance fraudfine. On July 21, 2006, Steele pled guilty toan Accusation charging him with conspiracyand arson. Steele admitted that he took pos-session of Francis’ 1998 Chevrolet Cavalierand set it on fire so that Francis could falselyreport that the vehicle had been stolen.State v. Eduardo Pagan, Jr.

On August 17, 2006, a Somerset CountyGrand Jury returned an indictment chargingEduardo Pagan, Jr., with Insurance Fraud,falsifying records, and tampering with publicrecords or information. According to the in-dictment, Pagan falsely reported to theBelleville Police Department that his leased2001 Jaguar had been stolen. It is also allegedthat Pagan submitted a false vehicle theftclaim to Parkway Insurance Company, know-ing that the vehicle had not been stolen. Thecase is pending.State v. Deland Docsol

On December 11, 2006, Deland Docsolpled guilty to attempted theft by deception.On the same day, the court admitted himinto the PTI Program. An Essex CountyGrand Jury returned an indictment on Au-gust 8, 2006, charging Docsol with at-tempted theft by deception and tamperingwith public records or information. Accord-ing to the indictment, on November 16,2002, Docsol allegedly fraudulently re-ported to the Irvington Police Departmentthat his 1995 Mercedes Benz E420 hadbeen stolen on that day even though the ve-hicle had been in the possession of the At-lanta, Georgia, Police Department since No-vember 13, 2002. The State alleged thatDocsol submitted a fraudulent Affidavit of

Vehicle Theft to Prudential Property andCasualty Insurance Company, falsely statingthat he last saw the vehicle on November16, 2002. Prudential, suspecting fraud, de-nied the claim and referred the matter toOIFP for investigation.State v. Victor Shulou

On December 21, 2006, Victor Shuloupled guilty to an Accusation charging himwith Insurance Fraud. Shulou admitted thathe falsely reported that his car had been sto-len in New York City, knowing that it hadnot been stolen. He subsequently filed a falsestolen vehicle insurance claim with AllstateInsurance Company. Shulou will be sen-tenced in 2007.State v. Michael J. Jolas

On August 21, 2006, an Essex CountyGrand Jury returned an indictment chargingMichael J. Jolas with theft by deception. Ac-cording to the indictment, Jolas reported tothe Belleville Police Department that his2001 Kia Sephia had been stolen, knowingthat it had not been stolen. It is also allegedthat Jolas falsely submitted a vehicle theftinsurance claim to One Beacon Insurance/New Jersey Skylands Insurance Company.The insurance company paid $9,039 on theclaim.State v. Paulette Foti-McMullen, et al.

On October 11, 2006, Hank McMullenpled guilty to an Accusation charging himwith Insurance Fraud. He admitted that heand his wife, Paulette Foti-McMullen, falselyreported that her 2003 Ford Expedition wasstolen and filed a false stolen vehicle policereport with the Hamilton Township PoliceDepartment in support of the phony autoinsurance theft claim. Hank McMullen fur-ther admitted that he assisted his wife in fil-ing a false auto theft insurance claim withState Farm Insurance Company by conceal-ing the fact that the Ford Expedition was seton fire in New York so that the McMullenscould falsely claim the Expedition had beenstolen. Hank McMullen is scheduled to besentenced in early 2007. The McMullenswere also prosecuted by the Hamilton Town-ship Municipal Court and by law enforce-ment authorities in New York for conductrelated to this false insurance claim.State v. Mary Maldonado , et al.

On November 30, 2006, a SomersetCounty Grand Jury returned an indictmentcharging Mary Maldonado and her son, AlanMaldonado, Jr., with conspiracy, Insurance

Fraud, attempted theft by deception, tam-pering with public records, and false swear-ing. According to the indictment, MaryMaldonado fraudulently reported to the OldBridge Township Police Department that her2002 Acura RSX, which her son Alan hadbeen driving, had been stolen. The State fur-ther alleges that Mary Maldonado submitteda fraudulent stolen vehicle claim to AllstateInsurance Company, even though the vehiclehad not been stolen but had, in fact, beeninvolved in an accident. Allstate, suspectingfraud, denied the claim and referred the mat-ter to OIFP for investigation.State v. Cindy Cassagne-Centeno

On November 9, 2006, Cindy Cassagne-Centeno pled guilty to an Accusation charg-ing her with Insurance Fraud. Cassagne-Centeno admitted that she falsely reported tothe Jersey City Police Department and Selec-tive Insurance Company that her 2002Honda Accord was stolen from outside herresidence when, in fact, the vehicle had beenfound burning in New York City the day be-fore she reported she had last seen the car.Cassagne-Centeno is scheduled to be sen-tenced in 2007.State v. Juan Saldivar

On December 7, 2006, Juan Saldivar pledguilty to an Accusation charging him withInsurance Fraud. Saldivar admitted that hefalsely reported to Encompass InsuranceCompany that his Ford Expedition had beenstolen, even though he knew the person whohad the vehicle and that the vehicle had sub-sequently been returned to him. He is sched-uled to be sentenced in 2007.State v. Rosa Cuellar

On November 9, 2006, an Essex CountyGrand Jury returned an indictment chargingRosa Cuellar with Insurance Fraud, at-tempted theft by deception, and tamperingwith public records. According to the indict-ment, Cuellar falsely reported to Newark Po-lice Department and Progressive InsuranceCompany that her 2004 Hyundai had beenstolen, when she had allegedly given the ve-hicle to another person to dispose of so thatshe could file a false auto theft claim withher insurance company and receive the claimmoney for the vehicle. The case is pending.State v. Joseph Gavin

Joseph Gavin, who had an outstandingwarrant for his arrest, was arrested in Penn-sylvania by OIFP investigators on November2, 2006, and was transported to Cape May

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County. As part of the Paulo Dasilva-Cristelo investigation, a Cape May CountyGrand Jury had returned an indictment thatcharged Gavin with conspiracy and theft bydeception. According to the indictment,Gavin, who was also known as JosephAbadie, allegedly conspired with Dasilva-Cristelo to submit a phony automobile insur-ance claim to the Camden Fire Insurance As-sociation. The State also alleged in the in-dictment that Dasilva-Cristelo “gave up” his1999 Chevrolet pickup truck to Gavin sothat Dasilva-Cristelo could file a false stolenvehicle claim with the Camden Fire Insur-ance Association. Camden Fire Insurance As-sociation paid approximately $23,407 for thephony automobile insurance theft claim forDasilva-Cristelo. Gavin had been a fugitivewhen the indictment was returned.State v. Keith R. Turpin

On November 28, 2006, Keith R. Turpinpled guilty to an Accusation charging himwith Insurance Fraud. Turpin admitted thaton April 19, 2006, he falsely reported to theAsbury Park Police Department that his2004 Volkswagen had been stolen when, infact, it had not been stolen. He later submit-ted a vehicle theft insurance claim to RutgersCasualty Insurance Company, which paid$28,050 on the claim. Turpin is scheduled tobe sentenced in 2007.State v. Alexander Schaefer

On December 12, 2006, AlexanderSchaefer pled guilty to an Accusation charg-ing him with Insurance Fraud. Schaefer ad-mitted that he submitted a false insuranceclaim to State Farm Insurance Companyclaiming that his ten-day-old 2003 Yamahamotorcycle was stolen while parked inWayne, when, in fact, it was damaged whilehe was operating it. Schaefer’s scheme cameto light when it was discovered that he wascited for careless driving by the PequannockPolice Department while riding the motor-cycle that he previously reported as beingstolen in Wayne. State Farm deniedSchaefer’s claim and the matter was referredto OIFP for investigation. He is scheduled tobe sentenced in 2007.False AutomobileRelated Insurance ClaimsState v. Thomas Liu

On August 28, 2006, the court admittedThomas Liu into the PTI Program condi-tioned upon him paying a $1,500 civil insur-ance fraud fine. The court also ordered himto perform 75 hours of community service.A Monmouth County Grand Jury returned

an indictment on February 23, 2006, charg-ing Liu with conspiracy and attempted theftby deception. According to the indictment,Liu, the owner of Long Branch Service Cen-ter, allegedly provided phony repair receiptstotaling $2,532 to John Callery. Callery, whowas involved in an automobile accident, al-legedly used the phony repair receipts in or-der to inflate his insurance claim to LibertyMutual Insurance Company. Callery pledguilty to attempted theft by deception andwas admitted into the PTI Program.State v. Misty Megill

On January 26, 2006, OIFP investigatorsand members of the New Jersey State Policearrested Misty Megill and charged her withInsurance Fraud and tampering with publicrecords. The State alleges that Megill andperhaps others purchased used cars, oftensalvage cars. In registering the vehicles withthe Motor Vehicle Commission (MVC),Megill allegedly falsely indicated that the carswere covered with an auto insurance policywhen, in fact, they were not. The cars werethen allegedly sold or leased to others. Megillwas arraigned in Monmouth County and bailwas set at $170,000/10%. This matter ispending presentation to a Grand Jury. Theinvestigation is continuing and additional ar-rests and charges are anticipated.State v. Louis Rivadeneira

On December 15, 2006, the court sen-tenced Louis Rivadeneira to a one-year pro-bationary term and ordered him to pay$9,800 in restitution. On October 19, 2006,Rivadeneira had pled guilty to attemptedtheft by deception. A Hudson County GrandJury returned an indictment on May 2, 2006,charging Rivadeneira, who owned and oper-ated an automobile body repair businessknown as Louis & Sons Auto Body, withconspiracy and attempted theft by deception.According to the indictment, between May4, 2000 and August 15, 2003, Rivadeneirainflated automobile body repair claims sub-mitted to Allstate Insurance Company andUnited Services Automobile Association(USAA). The State alleged that Rivadeneirawas responsible for submitting several in-flated automobile repair claims by causingadditional damage to be inflicted on cars hewas to repair and by charging the insurancecompanies for repairs that were not neces-sary or were never made as billed.State v. Sylvia Morales

On July 11, 2006, the court admittedSylvia Morales into the PTI Program follow-

ing her May 24, 2006, guilty plea to Insur-ance Fraud. A Bergen County Grand Jury re-turned an indictment charging Morales withInsurance Fraud. According to the indict-ment, Morales allegedly submitted a fraudu-lent damage and theft of property claim toConsumer First Insurance Company for her2001 BMW. The indictment alleged that Mo-rales reported that she was the driver of thevehicle when it was damaged and that partshad been stolen when, in fact, her son, whohad a suspended drivers license and was notinsured to drive Morales’ vehicle, was thealleged driver of the vehicle when it wasdamaged and the parts were stolen.

State v. Robinson Rodriguez

On September 18, 2006, a Bergen CountyGrand Jury returned an indictment chargingRobinson Rodriguez with Insurance Fraudand attempted theft by deception. Accordingto the indictment, Rodriguez allegedly sub-mitted phony receipts totaling $2,500 to Lib-erty Mutual Insurance Company in support ofhis claim that four rims and tires were stolenfrom his 1999 Lincoln Navigator. The indict-ment alleges that the rims and tires were al-ready on the Navigator when Rodriguez pur-chased the vehicle despite Rodriguez’ claimthat he purchased the rims and tires sepa-rately. Rodriguez failed to appear at his ar-raignment on October 16, 2006, and thecourt issued a bench warrant for his arrest.State v. Jason Senf

In May 2006, the trial court stayed theprosecution of Jason Senf pending the out-come of the Supreme Court’s decision ad-dressing the application of the InsuranceFraud statute in State v. Randi Fleischman.The Appellate Division had reversed the trialcourt’s order admitting Senf into the MercerCounty PTI Program and returned the caseto the trial court for trial. Over the State’sobjection, on July 25, 2005, the trial courtstayed the prosecution and admitted Senfinto the PTI Program, conditioned upon himpaying a $5,000 civil insurance fraud fine and

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performing 100 hours of community service.The State objected to Senf ’s participation inthe PTI Program because he was chargedwith a serious second degree crime.

A Mercer County Grand Jury previouslyreturned an indictment that charged Senfwith Insurance Fraud and attempted theft bydeception. According to the indictment,Senf allegedly submitted a fraudulent insur-ance claim to Foremost Insurance Companyfor damage to his all-terrain vehicle (ATV).The State alleged that Senf falsely claimedthat he damaged his ATV on June 22, 2003,when he struck a tree and attempted tomake a collision claim for damages to hisATV. The State alleged that Senf ’s friend ac-tually damaged the ATV earlier on April18, 2003, when he struck a tree with theATV. At that time, however, the ATV wasnot covered with collision insurance byForemost Insurance Company. The State al-leged that after the ATV was damaged, Senfattempted to obtain insurance with collisioncoverage and concealed the fact that theATV had been damaged. Suspecting fraud,Foremost investigated Senf ’s June 22, 2003,claim and referred the matter to OIFP forfurther investigation and prosecution.

State v. Virginia B. Kinion , et al.

On April 13, 2006, Virginia B. Kinionpled guilty to Health Care Claims Fraud. Thecourt sentenced her on August 18, 2006, tothree years probation and ordered her to paya $10,000 civil insurance fraud fine. On

March 24, 2006, John Knight pled guilty tofalsifying records. The court sentenced himon August 18, 2006, to two years probationand ordered him to pay a $5,000 civil insur-ance fraud fine. A Passaic County Grand Juryreturned an indictment that charged VirginiaB. Kinion and her husband, John Knight,with conspiracy, Health Care Claims Fraud,and attempted theft by deception. The Statealso charged Kinion with theft by deception,tampering with public records or informa-tion, and falsifying records. The Statecharged Knight separately with falsifyingrecords and false swearing.

According to the indictment, Kinion andKnight allegedly submitted a false automo-bile insurance policy application and falsePIP claims to Clarendon National InsuranceCompany. The State alleged in the indict-ment that Kinion and Knight submitted anautomobile insurance policy application thatindicated they had no automobile insuranceand no automobile accidents for the 36months prior to the date of the application.The State alleged that Kinion and Knight hadbeen involved in an automobile accident justhours before they submitted the insurancepolicy application, and that they allegedly at-tempted to represent to the insurance com-pany that the automobile accident occurredafter it agreed to provide automobile insur-ance. The State further alleged that Kinionand Knight caused fraudulent PIP insuranceclaims for $9,917 and $13,231 to be submit-ted to Clarendon for the automobile acci-dent. Clarendon denied the claims and re-ferred the matter to OIFP for investigation.

State v. Jay Gorzkowski

On November 27, 2006, Jay Gorzkowskipled guilty to an Accusation charging himwith Insurance Fraud. Gorzkowski admittedthat he reported to the Elmwood Police De-partment that his 1999 Mercedes Benz hadbeen stolen. Gorzkowski admitted that hegrossly inflated the value of the vehiclewhen he submitted the stolen automobileinsurance claim to Consumer First InsuranceCompany in order to obtain a larger insur-ance payoff for the vehicle. Consumer First,suspecting fraud, denied the claim and re-ferred the matter to OIFP for investigation.Gorzkowski is scheduled to be sentenced inearly 2007.State v. Frances Bowie, et al.

On September 9, 2006, the court admit-ted Monique Bowie into the PTI Program

conditioned upon her paying $123 in restitu-tion to Amica Insurance Company and a$2,000 civil insurance fraud fine. On July 28,2006, the court sentenced Frances Bowie totwo years probation and ordered her to pay a$4,000 civil insurance fraud fine. On June12, 2006, Frances Bowie pled guilty to anAccusation charging her with Health CareClaims Fraud. Bowie’s daughter, MoniqueBowie, was charged in a separate Accusationwith attempted theft by deception. FrancesBowie admitted that, between May 13, 2002and May 28, 2003, she submitted a false au-tomobile insurance claim to an insurancecompany. Specifically, she admitted that shefalsely claimed to Amica Mutual InsuranceCompany that, following an automobile acci-dent, she was required to hire another personto perform “essential services” for her be-cause of the injuries she sustained in the au-tomobile accident. Frances Bowie admittedthat, in total, she submitted approximately$1,500 in phony essential services claims toAmica Mutual Insurance Company. Suspect-ing fraud, Amica denied both claims and re-ferred the matter to OIFP for investigation.State v. Nicholas A. DiMeglio

On October 4, 2006, a Union CountyGrand Jury returned an indictment chargingNicholas A. DiMeglio with theft by decep-tion, uttering forged writing, and falsifyingrecords. According to the indictment,DiMeglio allegedly submitted an altered in-voice in the amount of $8,745 in order tosupport the amount of damage he claimedhis 2002 Kawasaki motorcycle sustained in acollision with a truck. The State alleges thatDiMeglio submitted the altered invoice toRider Insurance Company to make it appearthat, prior to the accident, the insured mo-torcycle had had extensive repairs and reno-vations, even though the repairs and renova-tions had never been made. DiMeglio failedto appear at his arraignment on November13, 2006, and the court issued a bench war-rant for his arrest.State v. Judith E. Hoffman

On September 19, 2006, the court admit-ted Judith E. Hoffman into the PTI Programconditioned upon her performing 50 hoursof community service. Hoffman previouslypled guilty to an Accusation charging herwith Insurance Fraud. Hoffman allegedlywas involved in a motor vehicle accident. Atthe time of the accident, her automobile in-surance policy with Allstate Insurance Com-pany allegedly had been terminated for fail-ure to pay the premium. Hoffman allegedly

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reinstated the insurance policy with Allstatefollowing the accident and allegedly changedthe time on the police accident report so thatit reflected that she had insurance coverageat the time of the accident.State v. Alexis Figueroa

On August 15, 2006, a Hudson CountyGrand Jury returned an indictment chargingAlexis Figueroa with attempted theft by de-ception. According to the indictment,Figueroa allegedly obtained medical servicesfrom the Jersey City Medical Center, valuedin excess of $500, by falsely claiming to beinjured in an automobile accident in which ataxicab was allegedly struck by another ve-hicle. The State alleged that Figueroa wasnot in the taxicab when it was struck and,therefore, did not suffer injuries. The allegedmotive for Figueroa’s seeking treatment fromthe Jersey City Medical Center was to submita false PIP claim to Amica Mutual InsuranceCompany in an effort to obtain insuranceclaim money. The insurance company’s inves-tigation of the incident prevented Figueroafrom going forward with his alleged attemptto defraud Amica Mutual Insurance Com-pany. The case is pending trial.State v. Hanif Bethea, et al.

On August 24, 2006, an Essex CountyGrand Jury returned an indictment chargingHanif Bethea and Thomas Merritt with con-spiracy, Health Care Claims Fraud, attemptedtheft by deception, and tampering with pub-lic records. According to the indictment, be-tween May 16, 2001 and April 9, 2002,Bethea and Merritt conspired to commitHealth Care Claims Fraud and theft by de-ception by allegedly claiming that they hadbeen injured in an automobile accidentwhich purportedly occurred on May 16,2001, in Newark. The State alleges that theaccident did not occur and neither Betheanor Merritt were injured. The State also al-leges that Bethea and Merritt caused the EastOrange Chiropractic Association to bill Met-ropolitan Property and Casualty InsuranceCompany a total of approximately $9,861for diagnostic and chiropractic treatmentsrelated to the purported auto accident. EastOrange Chiropractic billed approximately$5,173 for treatments rendered to Betheaand $4,688 for treatments rendered toMerritt. Bethea failed to appear at his ar-raignment on October 2, 2006, and the courtissued a bench warrant for his arrest.

Additionally, two other claimants, WilliamEbron and Suzette Tanner, were also treatedfor alleged injuries arising from the pur-

ported accident in a total amount of ap-proximately $11,215. Ebron and Tanner pre-viously pled guilty and both were sentencedto four years probation, ordered to pay$14,690 in restitution and to each pay a$5,000 civil insurance fraud fine.State v. Evelia Toledo

On November 29, 2006, Evelia Toledopled guilty to an Accusation charging herwith Insurance Fraud. On the same day, shewas admitted into the PTI Program condi-tioned upon her performing 100 hours ofcommunity service. Toledo allegedly submit-ted an altered receipt for towing of her 1999Ford Crown Victoria to the Iservco Insur-ance Company, following an accident shewas involved in on the New Jersey Turnpike.State v. Town & Country Auto Body, et al.

On December 6, 2006, the court admittedTown & Country Auto Body and VincentIuffredo into the PTI Program conditionedupon them paying $6,757 in restitution toLiberty Mutual Insurance Company and pay-ing a $7,500 civil insurance fraud fine. Onthe same day, Town & Country Auto Bodylocated on East Main Street in Mendham,pled guilty to an Accusation charging it withtheft by deception. Town & Country’sowner/operator, Vincent Iuffredo, was alsocharged by way of an Accusation with theftby deception. The corporate defendant,Town & Country Auto Body, allegedly stoleinsurance company claims money from Lib-erty Mutual by inflating automobile damagerepair claims.State v. Noemi Romero, et al.

On November 17, 2006, a Mercer CountyGrand Jury returned an indictment chargingNoemi Romero, Argelia Romero, and MariaRomero with conspiracy, Health Care ClaimsFraud, attempted theft by deception, andtampering with public records. According tothe indictment, following an allegedly minorautomobile accident which occurred in WestOrange, Noemi Romero, the driver of oneof the vehicles involved in the purported ac-cident, conspired with Maria Romero andArgelia Romero to claim to the West OrangePolice Department that Maria and Argeliawere passengers in the car and were injured,when, in fact, they were not passengers inthe car at the time of the accident and werenot injured. The State alleges that followingthe claim of injuries, Noemi, Maria, andArgelia Romero submitted claims for medicaltreatment to New Jersey Manufacturers In-surance Company based on the automobile

insurance policy’s PIP coverage. The Statealleges that approximately $20,000 in PIPclaims were submitted as a result of the pur-ported accident.Insurance Claims Involving Identity FraudState v. Vianey Vincent

On December 18, 2006, Vianey Vincentpled guilty to Health Care Claims Fraud. Hewill be sentenced in 2007. A State GrandJury returned an indictment charging VianeyVincent, a/k/a Steven Vincent, a/k/aVincent Steven, a former State employee ofthe Irvington Branch of the Motor VehicleCommission, with Health Care Claims Fraud,theft of identity, and attempted theft by de-ception. The indictment alleged that, be-tween January 1, 1998 and August 31, 2002,Vincent used the fictitious identities ofSteven Vincent and Vincent Steven to ob-tain an automobile insurance policy, a homemortgage, an automobile loan, and othercredit card purchases with a value in excessof $75,000. The indictment also alleged thatVincent submitted false PIP insurance claimsto State Farm Insurance Company and at-tempted to collect uninsured motorist insur-ance benefits by claiming that “StevenVincent” was insured with State Farm andthat he (Vianey Vincent) was entitled to in-surance benefits as a member of “StevenVincent’s” household. OIFP investigators ar-rested Vincent pursuant to an arrest warrant.Vincent was released on $50,000 bail.State v. Solanji Severino Chavez

On September 22, 2006, the court sen-tenced Solanji Severino Chavez to a one-yearprobationary term and ordered her to per-form 25 hours of community service.Severino Chavez previously pled guilty to anAccusation charging her with uttering asimulated document. Severino Chavez ad-mitted that she possessed a fictitious NewJersey drivers license bearing the nameMarisol Garcia, knowing she was not MarisolGarcia.State v. Oscar Garcia Guillen a/k/a RafaelFeliciano

On July 12, 2006, a Union County GrandJury returned an indictment charging OscarGarcia Guillen with Insurance Fraud andtheft of identity. According to the indict-ment, Garcia Guillen allegedly stole the iden-tity of a Trenton man, using the man’s driv-ers license and personal information to ob-tain an auto insurance policy from FirstTrenton Indemnity Company. The State al-

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leges that later, following an automobile ac-cident in Hamilton, Garcia Guillen allegedlypresented police with a fraudulent insurancecard in the Trenton man’s name and submit-ted a claim in the man’s name for $3,127 toState Farm Insurance Company, the otherdriver’s insurance company. Garcia Guillenfailed to appear at his pre-arraignment con-ference on August 4, 2006. The judge issueda bench warrant for his arrest.State v. Alif James, et al.

On December 21, 2006, MichelleChappell pled guilty to conspiracy. She isscheduled to be sentenced in 2007. AHudson County Grand Jury returned an in-dictment on October 17, 2006, charging AlifJames and Michelle Chappell with con-spiracy, theft of identity, and theft by decep-tion. According to the indictment, James andChappell conspired to commit identity theftand theft of a car. James allegedly obtained a1998 Honda Accord from an auto dealershiputilizing the identity of another person,which James wrongfully obtained. The Statefurther alleged that Chappell co-signed cer-tain records in connection with the purchaseof the Honda knowing that James was usinga fictitious identity. The case as to James ispending trial.Insurance Fraud Committedby Police OfficersState v. Jerome F. Bollettieri, et al.

On August 11, 2006, following a six-daybench trial, the trial judge convicted JeromeF. Bollettieri of conspiracy, official miscon-duct, bribery, and Criminal Use of Runners.He will be sentenced in 2007. Bollettieri,who was the Lieutenant in charge of theCamden County Police Department’s Auto-mobile Accident Report Records Room atthe time he was charged in an indictmentpreviously returned by the State Grand Jury,was also charged, along with ThomasDiPatri, Charles Warrington, and Ettore C.Carchia with providing Camden Police autoaccident reports to DiPatri so they could, inturn, be provided to Warrington, a “runner,”to solicit patients for a chiropractic practiceknown as American Spinal. Specifically, theState Grand Jury indictment chargedBollettieri and DiPatri with conspiracy, offi-cial misconduct, bribery, and Criminal Useof Runners. Warrington was charged withconspiracy, bribery in official matters, andCriminal Use of Runners.

Previously, the court sentenced Carchia tothree years probation and ordered him to sur-

render his chiropractic license following hisguilty plea to an Accusation charging himwith Health Care Claims Fraud in connectionwith this investigation. In addition, followinga six-day bench trial, DiPatri was convictedof conspiracy, bribery, official misconduct,and Criminal Use of Runners. The court sen-tenced him to three years state prison.

Bollettieri’s trial was stayed pending an ap-peal to the State Supreme Court in whichBollettieri alleged that the State intended toimproperly use immunized testimony againsthim in his trial. The State Supreme Court re-turned Bollettieri’s case to the trial court fora Kastigar hearing; and on January 23, 2006,the trial judge ruled that Bollettieri’s priorstatement could, in fact, be admitted intoevidence against him at his trial.State v. Philip Major, et al.

The court meted out sentences or issuedarrest warrants in 2006 for two additionalpersons who were among 39 defendants, pri-marily from Essex County, who werecharged in four separate indictments withconspiracy to commit theft by deception andofficial misconduct relating to automobileinsurance PIP fraud. The defendants namedin the indictments were allegedly involved inautomobile accidents in police reports writ-ten by former East Orange Police OfficerPhilip Major between June 1995 and Octo-ber 1999. The indictments returned by aState Grand Jury alleged that the automobileaccident police reports were used to supportfraudulent automobile insurance PIP andbodily injury claims.

The following dispositions occurred in 2006: Cari Blanco and Nieves Carasco had failed

to appear at their arraignment and the courtissued a bench warrant for their arrests. BothBlanco and Carasco surrendered on June 13,2005, and each pled guilty to conspiracy tocommit official misconduct. The court sen-tenced them on February 24, 2006, to threeyears probation and ordered them each to pay a$1,500 civil insurance fraud fine. Blanco wasalso ordered to pay $3,895 in restitution toPrudential Insurance Company.

On September 15, 2006, the court sen-tenced former East Orange Police OfficerPhilip Major to 364 days in county jail. Ma-jor previously pled guilty to conspiracy andtwo counts of official misconduct. Majorpled guilty to writing 16 false police automo-bile accident reports so that approximately60 insurance claims could be submitted toinsurance companies for PIP, property dam-

age, and non-economic losses arising frombodily injuries purportedly sustained in auto-mobile accidents. Many of the people posingas alleged accident victims filed insuranceclaims for personal injuries.

At his guilty plea hearing, Major admittedthat he was a “runner” who accepted bribepayments from two chiropractors for thepurpose of providing information from po-lice accident reports to the chiropractorswho used the information to recruit patientsto submit insurance claims. A “runner” is aperson who, for money, recruits persons forlicensed medical professionals or lawyers sothey can submit insurance claims. Further-more, Major admitted he had a financial in-terest in a medical facility that specialized intreating persons with insurance claims, andalso admitted that he attempted to bribe an-other police officer for additional police ac-cident report information in order to recruitpatients to submit insurance claims.State v. Jeffrey Nemes

As part of a continuing investigation intoa series of arson fires in Mercer County andelsewhere, a State Grand Jury previously re-turned three separate indictments thatcharged Jeffrey Nemes, a former HamiltonTownship police officer, with bribes alleg-edly offered to local district fire chiefs,bribes allegedly offered to the ExecutiveVice President of the East Windsor PoliceAthletic League (PAL), and the alleged theftof insurance claim money in connectionwith a construction and home repair businesswhich was owned and operated by Nemes,known as Nemes Enterprises, Inc.

With respect to the third indictment in-volving the alleged theft of insurance claimmoney, on May 19, 2005, the Appellate Di-vision of the New Jersey Superior Court re-versed Nemes’ conviction for theft by failureto make proper disposition of property. TheAppellate Court returned the case to the trialcourt for a new trial. A jury had foundNemes guilty of theft by failure to makeproper disposition of property. Nemes, whileemployed as a Hamilton Township policeofficer, allegedly took insurance claimmoney in the approximate amount of$130,000 from both commercial and resi-dential property owners through Nemes En-terprises, Inc., for the purpose of makingrepairs but allegedly failed to complete re-pairs to the properties. The court sentencedNemes to seven years state prison and or-dered him to pay a total of $130,833 in res-titution. Nemes appealed his conviction

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which was reversed by the Appellate Divi-sion and remanded for a new trial. The caseis pending re-trial.

The trial on the charges that Nemes alleg-edly offered bribes to fire chiefs in andaround Hamilton Township, began on Au-gust 24, 2005. During the trial, the State al-leged that Nemes offered a bribe to the firechief of the Rusling Hose Fire Company. Asecond bribe was alleged to have occurredduring a conspiracy in which Nemes andMarc Rossi, the former owner of Rossi Ad-justment Services, a public insurance claimsadjusting business, agreed to offer a bribe tothe fire chief of the Enterprise Fire Com-pany in Hamilton Township. During the trial,the State alleged that bribes were offered tothe fire chiefs so that they would allow firesto burn longer in order to cause additionaldamage. The State alleged that Nemesowned and operated a construction andhome repair business during the period oftime the alleged bribes were paid and wasseeking additional construction work for hisbusiness. The trial ended in a mistrial.

On June 13, 2006, the Appellate Divisiondenied Nemes’ request to dismiss the indict-ment on the ground that double jeopardy at-tached as a result of the declaration of themistrial, and ordered the case returned to thetrial court for trial. The trial is scheduled forearly 2007. Likewise, the third indictmentalleging that Nemes allegedly offered bribesto the Vice President of the East WindsorPAL is pending trial.Receiving Stolen PropertyState v. Anthony Josephs, et al.

The court previously sentenced AnthonyJosephs to five years in state prison. Josephspled guilty to receiving stolen property.Josephs admitted that, between December2002 and January 2004, he knowingly pos-sessed a stolen 2004 Cadillac Escalade and,between August 2003 and October 2003, heknowingly possessed a stolen 2000 PorscheBoxster. Josephs also admitted that he par-ticipated in stealing other cars from automo-bile dealerships. Josephs and others wouldallegedly appear at dealerships, test drive ex-pensive cars, and switch the real ignition keyto the cars with a fake key so they could re-turn and use the real ignition key to steal thecars. The defendants stole cars from delarshipslocated in Oakhurst and Lawrence.

On October 20, 2006, the court sentencedSasha Andre Brown to a five-year probation-ary term. On January 19, 2006, Brown pled

guilty to an Accusation charging him withreceiving stolen property. Brown admittedthat he possessed a bag of approximately 24stolen automobile ignition keys used to stealexpensive new cars from dealers. Brown ad-mitted that he did so by using a similarscheme as Anthony Josephs.State v. Julio Cid-Peralta

On January 13, 2006, a Union CountyGrand Jury returned an indictment chargingJulio Cid-Peralta with receiving stolen prop-erty, alterations of motor vehicle trademarkidentifications, and obstructing administra-tion of law or other governmental function.According to the indictment, Cid-Peraltawas allegedly in possession of a stolen 1993Mazda RX7. The State alleged that the sto-len Mazda had an altered Vehicle Identifica-tion Number (VIN). The State also allegedthat when Cid-Peralta was stopped whiledriving the allegedly stolen car, he exited thevehicle and ran. Cid-Peralta failed to appearat his arraignment on March 6, 2006, and thecourt issued a bench warrant for his arrest.State v. Giovanni Muscia

On May 15, 2006, Giovanni Muscia pledguilty to theft by deception. He is scheduledto be sentenced in early 2007. A PassaicCounty Grand Jury returned an indictmentcharging Muscia with conspiracy and theft bydeception. According to the indictment,Muscia owned and operated Rocky’s AutoBody formerly located on Bloomfield Avenuein Paterson. Muscia allegedly received,stripped, and stored parts from automobilesthat had been reported stolen, including a1994 Mercedes Benz.Staged and Fictitious AccidentsState v. Anhuar Bandy, Elvin Castillo, et al.

Following a six-week jury trial, AnhuarBandy and Elvin Castillo were convicted ofracketeering, conspiracy, Health Care ClaimsFraud, and theft by deception. The Courtsentenced Bandy to 29 years state prison, or-dered him to pay a $100,000 criminal fineand restitution in the amounts of $3,483 toSentry Insurance Company, $14,106 toAllstate Insurance Company, and $472 toPrudential Insurance Company. The Courtsentenced Castillo to 13 years state prisonand ordered him to pay $27,800 in restitu-tion and a $50,000 criminal fine.

Anhuar Bandy and Elvin Castillo are twoof 28 persons named in ten separate 2002State Grand Jury indictments that chargeddefendants with racketeering, conspiracy,Health Care Claims Fraud, attempted theft,

theft by deception, use of a 17-year-old oryounger to commit a criminal offense, andpossession of a weapon without a permit.All of the charges stem from the defendants’alleged participation in phony automobileaccidents in and around Union County forwhich they submitted false insurance claims.

The State Grand Jury’s main indictmentcharged Bandy with racketeering and relatedcrimes. The State alleged Anhuar Bandyowned, controlled, or operated, as the chiefcorporate officer, six North Jersey chiroprac-tic clinics, and that Alejandro Ventura, ElvinCastillo, Raynaldo Cuevas, Cesar Caba, andVictor Almonte were associated with Bandy,or the clinics, as “runners” who fabricatedeight phony automobile accidents. The Statealleged that defendants used informationfrom the eight phony automobile accidentsto submit PIP insurance claims in excess of$331,000 to several insurance companies.Additionally, the State alleged in the indict-ment that defendants submitted insuranceclaims in excess of $2 million for more than90 other phony accidents, and that the acci-dents were constructed by obtaining cars,drivers and passengers, faking accidents, andthen sending the occupants of the cars totreat at Bandy’s chiropractic clinics so hecould submit the PIP insurance claims.

The State alleged that insurance claims forthese phony automobile accidents were sub-mitted to 16 other insurance carriers, includ-ing Bayside Casualty, Clarendon National,Continental Insurance, Farm Family Insur-ance Company, Liberty Mutual InsuranceCompany, Maryland Insurance Company, TheMoxon Company, National Continental Pro-gressive, National General Insurance Com-pany, NJ CURE, Ohio Casualty InsuranceCompany, Parkway Insurance, ProgressiveCasualty, Red Oak Insurance Company,United States Automobile Association (USAA),and New Jersey Manufacturers Insurance Com-pany. The State alleged that most of the claimmoney was paid to Bandy owned, operated,or controlled chiropractic clinics.

Pursuant to State v. Natale, a New JerseySupreme Court decision which mandated re-sentencing in certain cases, the Bandy casewas remanded to the trial court for re-sen-tencing. On August 7, 2006, Judge Triarsi ofUnion County held a re-sentencing hearingfor Bandy. Bandy appeared in court,publically admitted his guilt for the record,agreed to waive all further appeals of hisconviction, and agreed to pay $2 million incivil insurance fraud fines and restitution to

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insurance companies. Judge Triarsi re-sen-tenced Bandy to 17 years in state prison.

While in court, Bandy tendered $1 millionrepresenting a $170,000 civil insurance fraudfine, and $830,000 in partial payment of atotal of $1,830,000 in restitution to 21 in-surance companies identified as victims ofinsurance fraud during the OIFP investiga-tion. Bandy also provided the State with twomortgages on homes pledged to secure theremaining $1 million of restitution to bepaid to the 21 insurance companies over thenext five years.State v. Dannie Campbell, et al.

Dannie Campbell and ten other defen-dants were previously implicated in three in-dictments which charged them with con-spiracy, Health Care Claims Fraud, and at-tempted theft by deception. The State al-leged in the indictments that DannieCampbell masterminded fictitious automo-bile accidents in 1997 and 1998 that in-volved other co-conspirators so that the co-conspirators could treat for injuries purport-edly sustained in the phony accidents andsubmit PIP insurance claims to an insurancecompany. The fictitious accidents occurred inHillside and Newark.

Ramil Robinson, pled guilty to HealthCare Claims Fraud on June 30, 2006.Robinson failed to appear at his sentencingon August 21, 2006, resulting in the issuanceof a bench warrant for his arrest.

Campbell previously pled guilty to HealthCare Claims Fraud and was sentenced tothree years in state prison and ordered to paya $3,000 criminal fine. Nathaniel Jones,Duane Smith, Shaheed Johnson also previ-ously pled guilty to Health Care ClaimsFraud. Jones was sentenced to two yearsprobation and ordered to pay a $2,500 civilinsurance fraud fine, Smith was sentenced tothree years probation and ordered to pay a$2,500 civil insurance fraud fine, andJohnson was also sentenced to three yearsprobation and ordered to pay a $2,500 civilinsurance fraud fine. The charges as to theremaining defendants are pending trial.State v. Eric Boyer, et al.

State v. Shaquan McClaurin, et al.

State v. Louis McKenzie, et al.

State v. Tamika Sutton, et al.

The court sentenced three defendants in2006 who were previously named in fourState Grand Jury indictments charging con-spiracy, Health Care Claims Fraud, and at-

tempted theft by deception. The defendantsallegedly conspired with Eric Boyer, the al-leged mastermind of three staged accidentswhich purportedly occurred between Octo-ber 1998 and October 1999, and which re-sulted in the submission of multiple phonyPIP insurance claims to several insurancecompanies. Over $204,378 in fraudulentclaims were submitted to insurance compa-nies as a result of this alleged illicit scheme.

On January 27, 2006, the court sentencedAlnisca Franklin to a three-year probationaryterm with credit for 72 days served in countyjail. She was also ordered to perform 30hours of community service and pay a$3,000 civil insurance fraud fine. Franklinpled guilty to attempted theft by deception.

On March 20, 2006, Shonique Carneypled guilty to attempted theft by deception.The court sentenced her on May 12, 2006,to a two-year probationary term and or-dered her to perform 25 hours of commu-nity service.

On June 19, 2006, OIFP investigators ar-rested Ali Sawab, a/k/a Abdul Sawab, inPhiladelphia on a bench warrant. He waivedextradition and was incarcerated in the EssexCounty Jail. The judge set bail at $50,000. OnAugust 8, 2006, Sawab pled guilty to at-tempted theft by deception. On October 16,2006, the court sentenced him to a two-yearprobationary term with credit for 86 daysserved in county jail. The charges as to theremaining defendants are pending trial.State v. Iris Ojeda, et al.

On January 13, 2006, a State Grand Juryreturned an indictment charging Iris Ojeda,her daughter, Sacha Ojeda, and Felix Nieveswith conspiracy, Health Care Claims Fraud,and attempted theft by deception. Accordingto the indictment, between February 2, 2000and May 9, 2001, Iris Ojeda, Sacha Ojeda,and Nieves allegedly agreed to stage an auto-mobile accident for the purpose of submit-ting phony PIP and bodily injury insuranceclaims. The State further alleged that thethree staged an accident in Paterson andclaimed to have suffered bodily injuries as aresult of the accident. The State further al-leged that PIP applications were submittedto the Robert Plan/GSA Insurance Companyand the three began to treat for their pur-ported injuries. The Robert Plan paid outmore than $25,000 including $10,907 for in-juries purportedly sustained by Iris Ojeda,$5,006 for injuries purportedly sustained bySacha Ojeda, and $10,847 for injuries pur-portedly sustained by Nieves.

State v. Samantha Demetro, et al.

On January 27, 2006, Bobby Eley pledguilty to conspiracy. On March 27, 2006, thecourt admitted him into the PTI Programconditioned upon him paying a $2,500 civilinsurance fraud fine. On February 1, 2006,Steven “David” Thompson surrendered onan arrest warrant and was arraigned inBergen County Superior Court. On March27, 2006, Thompson pled guilty to con-spiracy. On May 5, 2006, the court admittedhim into the PTI Program and ordered himto pay $1,000 in restitution to State FarmInsurance Company and a $2,500 civil insur-ance fraud fine.

A State Grand Jury returned an indict-ment charging Samantha Demetro, BobbyEley, and Steven “David” Thompson withconspiracy. Demetro was also charged withtheft by deception. According to the indict-ment, Demetro, Eley, and Thompson alleg-edly conspired to submit automobile insur-ance property damage and bodily injury in-surance claims relating to nine automobileaccidents which purportedly occurred be-tween November 1998 through March 1999.The State alleged that all nine purported au-tomobile accidents allegedly occurred on thesame Route 21 exit ramp located in Passaic.The State also alleged that all nine automo-bile accidents involved the same cars, namelya 1995 Ford Crown Victoria and a 1983Porsche 928.

The State further alleged that insuranceclaims for these purported accidents weresubmitted to the following insurance compa-nies: American Family Mutual InsuranceCompany, CGU/United Security InsuranceCompany, Prudential Insurance Company,Pekin Insurance Company, Allstate InsuranceCompany, State Farm Insurance Company,Selective Insurance Company, and the St.Paul Fire and Marine Insurance Company.More than $63,000 was allegedly obtainedfrom the insurance companies for these al-leged automobile accidents representing bothproperty damage and bodily injury insuranceclaims. Approximately $4,711 in claims wereallegedly denied.State v. Abdullah “Wali” Islam, et al.

On February 6, 2006, Leon Harris, whowas arrested on a bench warrant, pled guiltyto theft by deception. On April 17, 2006,the court sentenced him to three years pro-bation with credit for 53 days served incounty jail. The Court issued a bench war-rant for the arrest of Glenn Johnson. He iscurrently a fugitive.

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A State Grand Jury returned an indict-ment charging Abdullah Islam, Leon Harris,Glenn Johnson, and Rodney Hammock withconspiracy, Health Care Claims Fraud, andattempted theft. According to the indict-ment, Islam allegedly masterminded a schemein which he and the other defendants falselyclaimed that an automobile accident had oc-curred on July 25, 1998, in Newark. The de-fendants allegedly claimed the accident in-volved a 1984 Ford Bronco and a 1994Hyundai. Defendants allegedly submittedPIP insurance claims for approximately$60,250 to GSA Insurance Company. GSAallegedly denied the claims because it sus-pected fraud and referred the matter toOIFP for investigation. Islam and Hammockpreviously pled guilty to attempted theft bydeception. The court sentenced Hammock totwo years probation, and Islam was sen-tenced to four years probation and orderedto pay a $200 criminal fine.State v. Creative Auto Body, et al.

On December 6, 2006, a State Grand Juryreturned a superseding indictment chargingseven individuals, as well as two police offic-ers. John A. Smith, who is currently a policeofficer with the Borough of Roselle, wascharged with conspiracy, official misconduct,and theft by deception. Samad Abdel, who iscurrently a police detective with the City ofPlainfield, was charged with conspiracy, offi-cial misconduct, attempted theft by decep-tion, and theft by deception. On December18, 2006, Abdel pled guilty to two counts ofofficial misconduct. He is scheduled to besentenced in 2007.

The seven other defendants were chargedas follows:■ Marco Rebelo, of Avenel, the owner and

operator of Creative Auto Body on 409East First Avenue in Roselle, was chargedwith conspiracy, misconduct by a corpo-rate official, and tampering with publicrecords or information;

■ Eli Vasquez, currently incarcerated atBayside State Prison, was charged withconspiracy, theft, and attempted theft bydeception;

■ Danny DaCosta, of Elizabeth, wascharged with conspiracy, theft, and at-tempted theft by deception;

■ Rogerio Neves, of Elizabeth, was chargedwith conspiracy, theft, and attemptedtheft by deception;

■ Rui Correia, of Elizabeth, was charged

with conspiracy, theft, and attemptedtheft by deception;

■ Charles T. Smith, of Willingboro, wascharged with theft and attempted theft bydeception; and

The indictment alleges that the defendantsreported seven staged or fictitious car acci-dents between March 2001 and March 2003and filed more than $117,800 in fraudulentautomobile insurance property damageclaims based on those phony accidents. Thedefendants, including the police officers, al-legedly provided false information for policeaccident reports from the Roselle andPlainfield Police Departments that wereused to substantiate the auto accident claims.Claims were allegedly filed with ProgressiveInsurance Company, Great American Insur-ance Company, Clarendon National Insur-ance Company, State Farm Insurance Com-pany and Liberty Mutual Insurance Com-pany. Approximately $94,200 was allegedlypaid by the insurance companies.

In connection with this OIFP investiga-tion, on December 1, 2006, the court admit-ted Scot L. Frasier into the PTI Programconditioned upon him paying $17,747 in res-titution and performing 60 hours of commu-nity service. On May 18, 2006, Frasier pledguilty to theft by deception. Frasier allegedlysubmitted two separate auto property dam-age insurance claims based on two accidentswhich never occurred.

In the first purported accident, Frasier al-legedly claimed that his 1997 Nissan Maximacollided with a Mercedes Benz driven by an-other driver in Plainfield. It is alleged thatthis accident never occurred. Liberty Mutualpaid approximately $4,911 to Frasier fordamage to his 1997 Nissan and Liberty Mu-tual paid approximately $25,000 for damageto the Mercedes Benz. The second accidentpurportedly occurred in Linden. Frasier al-legedly submitted a false insurance claim toState Farm claiming that his 1997 Nissancollided with a 1989 Honda Civic. StateFarm paid approximately $11,747 to Frasieron the claim because the Nissan was suppos-edly totaled.Fictitious Insurance IdentificationCards and Motor Vehicle DocumentsMotor Vehicle Commission(MVC) Investigations

In 2006, OIFP continued to make strides

in the disposition of defendants prosecutedas part of its investigation of misconduct onthe part of some Motor Vehicle Commission(MVC) employees. As reported earlier, thisinvestigation was part of OIFP’s continuinginvestigation into official misconduct andfraud on the part of some State employees atthe MVC, as well as the procurement of fic-titious identification to include drivers li-censes, commercial drivers licenses, andother MVC-related documents. Many peoplefile false insurance claims utilizing severaldifferent false identities. Phony drivers li-censes and other false identification facilitatethis illegal conduct.State v. Rita Okolo, et al.

A State Grand Jury returned an indict-ment charging Rita Okolo, an MVC em-ployee, with multiple counts of conspiracy,official misconduct, sale of a simulateddocument, and bribery in official matters. Asecond indictment charged Josefina Martinezand Fermin Capellan each with conspiracyand bribery in official matters. According tothe indictments, Okolo allegedly accepted a$500 bribe from Capellan to provide himwith a fictitious commercial drivers licensein the name of Josefina Martinez. The Statealleged in the indictment that Martinez wasissued a commercial drivers license withouttaking the commercial drivers license exam.

Okolo pled guilty to official misconduct.On February 17, 2006, the court sentencedher to 364 days in county jail as a conditionof four years probation. Martinez pled guiltyto conspiracy to commit official misconduct.On February 17, 2006, the court sentencedher to three years probation. Capellan pledguilty to conspiracy. On February 24, 2006,the court sentenced him to three years pro-bation and ordered him to perform 100hours of community service.State v. Esterlina Marin, et al.

On February 10, 2006, the court admittedEsterlina Marin into the PTI Program condi-tioned upon her performing 25 hours ofcommunity service and paying a $4,000criminal fine. Esterlina Marin pled guilty toan Accusation charging her with official mis-conduct. The State alleged that EsterlinaMarin, a clerk at the Lodi branch of theMVC, at the request of her brother, IvanMarin, assisted in obtaining four drivers li-censes for individuals by allegedly falsifyingofficial MVC documents. Specifically, she al-legedly claimed that she had reviewed thebirth certificates of four applicants when, in

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fact, she had not reviewed birth certificatesfor those applicants.

On January 27, 2006, Ivan Marin pledguilty to an Accusation charging him withofficial misconduct. On March 17, 2006,the court sentenced him to one year proba-tion and ordered him to pay a $4,000 crimi-nal fine.State v. Stacey Chestnut

On March 10, 2006, the court sentencedStacey Chestnut to one year probation.Chestnut previously pled guilty after a StateGrand Jury returned an indictment chargingher with official misconduct. According tothe indictment, Chestnut, in her capacity asan employee of the Wayne MVC facility lo-cated on Route 23, created two fictitiousmotor vehicle forms for two people whowere not named in the indictment. Chestnutcreated and processed an application for aduplicate non-photo drivers license and anapplication for a drivers examination permitfor a commercial drivers license (CDL).Fictitious InsuranceIdentification Card CasesState v. Wilberta Johnson

On February 17, 2006, the court sen-tenced Wilberta Johnson to three years pro-bation. Johnson pled guilty to presenting afalse insurance identification card. A StateGrand Jury returned an indictment chargingJohnson with simulating a motor vehicle in-surance identification card and manufactur-ing a false insurance card. According to theindictment, Johnson allegedly exhibited aphony Clarendon Insurance Company autoinsurance identification card when she washaving her 2002 Kia inspected at thePlainfield MVC Inspection Station. Suspect-ing the card was fraudulent, MVC personnelcontacted OIFP.State v. Lisa Johnson

On May 5, 2006, the court sentenced LisaJohnson to three years probation. On March13, 2006, Johnson pled guilty to simulating amotor vehicle insurance identification card.A Union County Grand Jury returned an in-dictment on January 25, 2006, chargingJohnson with simulating a motor vehicle in-surance identification card. According to theindictment, Johnson allegedly exhibited acounterfeit Prudential Property and CasualtyInsurance Company auto insurance identifi-cation card when she was having her 1991GEO inspected at the Plainfield MVC In-spection Station. Suspecting the card was

fraudulent, MVC personnel referred thematter to OIFP. Johnson had failed to ap-pear at her arraignment on February 21,2006, and the court issued a bench warrantfor her arrest.State v. Mario Bonillo

On April 26, 2006, Mario Bonillo pledguilty to simulating a motor vehicle insur-ance identification card. On the same day,the court admitted him into the PTI Pro-gram conditioned upon him performing 60hours of community service. A UnionCounty Grand Jury returned an indictmenton January 25, 2006, charging Bonillo withsimulating a motor vehicle insurance identifi-cation card. According to the indictment,Bonillo allegedly exhibited a counterfeitAllstate Insurance Company auto insuranceidentification card when he was having his1987 Mazda inspected at the PlainfieldMVC Inspection Station. Suspecting thecard was fraudulent, MVC personnel re-ferred the matter to OIFP. Bonillo hadfailed to appear at his arraignment on Feb-ruary 21, 2006, and the court issued abench warrant for his arrest.State v. John W. Noone

On April 17, 2006, John W. Noone pledguilty to an indictment charging him withsimulating a motor vehicle insurance identifi-cation card. On June 23, 2006, the courtsentenced him to one year probation. Ac-cording to the indictment, Noone presenteda counterfeit Liberty Mutual Insurance Com-pany auto insurance identification card to anEdison Township police officer.State v. Fernando Nunez

On June 1, 2006, Fernando Nunez pledguilty to an indictment charging him withsimulating a motor vehicle insurance identifi-cation card. On August 11, 2006, the courtsentenced him to three years probation. Ac-cording to the indictment, Nunez presenteda counterfeit Liberty Mutual Insurance Com-pany auto insurance identification card to aNew Jersey State Trooper.State v. Mauro Sandoval-Pujois

On July 26, 2006, the court admittedMauro Sandoval-Pujois into the PTI Pro-gram. On February 16, 2006, a MiddlesexCounty Grand Jury returned an indictmentcharging Sandoval-Pujois with simulating amotor vehicle insurance identification card.According to the indictment, Sandoval-Pujois allegedly presented a counterfeit StateFarm Indemnity Company auto insurance

identification card to a Perth Amboy Citypolice officer.State v. Vernard K. Carter, Jr.

On May 12, 2006, the court sentencedVernard K. Carter, Jr., to three years proba-tion. On March 13, 2006, Carter pled guiltyto and indictment charging him with simu-lating a motor vehicle insurance identifica-tion card. According to the indictment,Carter allegedly exhibited a counterfeit Pru-dential Insurance Company auto insuranceidentification card when he was having his1990 Honda Accord inspected at thePlainfield MVC Inspection Station. Suspect-ing the card was fraudulent, MVC personnelreferred the matter to OIFP.State v. Edith Munoz

On March 24, 2006, the court orderedEdith Munoz to pay a $200 criminal fine af-ter he pled guilty to a disorderly persons of-fense of simulating a motor vehicle insur-ance identification card. Munoz admittedthat he presented a counterfeit Allstate In-surance Company motor vehicle insuranceidentification card to a Perth Amboy policeofficer during a traffic stop for a motor ve-hicle violation.State v. Timothy D. Jones

On February 10, 2006, the court orderedTimothy D. Jones to pay a $155 criminalfine. On the same day, Jones pled guilty to adisorderly persons offense of simulating amotor vehicle insurance identification card.Jones admitted that he presented a counter-feit Prudential Insurance Company auto in-surance identification card to a StateTrooper during a traffic stop for a motorvehicle violation.State v. Zyvritic Penn

On May 12, 2006, the court admittedZyvritic Penn into the PTI Program condi-tioned upon her performing 50 hours ofcommunity service. On March 29, 2006,Penn pled guilty to an Accusation chargingher with simulating a motor vehicle insur-ance identification card. Penn allegedly pre-sented a counterfeit Prudential CommercialInsurance Company auto insurance identifi-cation card when she was having her car in-spected at the Eatontown MVC InspectionStation. Suspecting the card was fraudulent,MVC personnel referred the matter to OIFP.State v. Kareem H. Ross

On April 13, 2006, the court sentencedKareem H. Ross to three years probationwith credit for eight days spent in county

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jail. On February 24, 2006, Ross pled guiltyto an Accusation charging him with simulat-ing a motor vehicle insurance identificationcard. Ross admitted that he displayed afraudulent Liberty Mutual Insurance Com-pany auto insurance identification card to anOrange police officer.State v. Andres Zapata-Quisqueya

On March 10, 2006, the court sentencedAndres Zapata-Quisqueya to two years pro-bation. Zapata-Quisqueya pled guilty to anindictment charging him with simulating amotor vehicle insurance identification card.According to the indictment, Zapata-Quisqueya allegedly presented a counterfeitNew Jersey Manufacturers Insurance Com-pany auto insurance identification card toan inspector at the Plainfield MVC Inspec-tion Station.State v. Natasha V. Crisp

On April 28, 2006, the court sentencedNatasha V. Crisp to two years probation.Crisp pled guilty on February 14, 2006, to anindictment charging her with simulating amotor vehicle insurance identification card.According to the indictment, Crisp allegedlyexhibited a phony Prudential InsuranceCompany auto insurance identification cardwhen she was having her 1997 Dodge In-trepid inspected at the Plainfield MVC In-spection Station. MVC personnel suspectedthe card was fraudulent and referred thematter to OIFP.State v. Jeffrey Ferrer, et al.

On May 22, 2006, Bernardo Santiago pledguilty to an Accusation charging him withproducing a phony motor vehicle insuranceidentification card. On July 17, 2006, thecourt admitted Santiago into the PTI Pro-gram. Santiago allegedly sold fraudulent mo-tor vehicle identification cards to a co-worker, Nelson Ferrer.

The court previously admitted JeffreyFerrer into the PTI Program. The court sen-tenced Nelson Ferrer to one year probation.Jeffrey Ferrer and his father, Nelson Ferrer,pled guilty to separate Accusations chargingthem with simulating a motor vehicle insur-ance identification card. Jeffrey Ferrer alleg-edly assisted in obtaining and selling aphony Countryway Insurance Company autoinsurance identification card. An under-cover OIFP investigator allegedly ap-proached Jeffrey Ferrer seeking to buy aphony auto insurance identification card.Jeffrey Ferrer allegedly indicated that hewould be able to obtain the card from

Nelson Ferrer. The undercover investigatorpaid $400 for the card. Jeffrey Ferrer alleg-edly retained $175 and gave the balance ofthe money to his father.State v. Patricia Wilson

On June 20, 2006, a Burlington CountyGrand Jury returned an indictment chargingPatricia Wilson with simulating a motor ve-hicle insurance identification card. Accordingto the indictment, Wilson allegedly presenteda phony Allstate Insurance Company autoinsurance identification card to a BeverlyCity police officer during a traffic stop.State v. Angela Caruso

On October 13, 2006, the court admittedAngela Caruso into the PTI Program. OnAugust 7, 2006, Caruso pled guilty to an Ac-cusation charging her with simulating a mo-tor vehicle insurance identification card.Caruso allegedly presented a phonyProformance Insurance Company auto insur-ance identification card to a Beverly City po-lice officer during a traffic stop.State v. Jessica M. Lee

On September 26, 2006, Jessica M. Leepled guilty to an indictment charging herwith simulating a motor vehicle insuranceidentification card. She is scheduled to besentenced early in 2007. According to theindictment, Lee allegedly presented acounterfeit Allstate Insurance Companyauto insurance identification card to aninspector at the Eatontown MVC Inspec-tion Station.State v. Roscoe Henderson

On June 9, 2006, the court sentencedRoscoe Henderson to three years in stateprison. On April 10, 2006, Henderson pledguilty to an Accusation charging him withsale of a simulated document. Hendersonadmitted that he sold a fictitious drivers li-cense to a New Jersey State Police Detectivewho was operating in an undercover capacityas part of an OIFP investigation into the un-lawful manufacture and sale of fictitiousdrivers licenses, motor vehicle inspectionstickers, and other related MVC documents.During the course of the investigation,Henderson sold a fictitious drivers licenseand a fictitious automobile insurance identi-fication card. Henderson was previously ar-rested after selling the phony insurance cardfor $75 at a restaurant located in Rahway.Evidence was seized, including a computerbelieved to be used in unlawfully manufac-turing fictitious documents.

State v. Daniel Rosa

On October 24, 2006, Daniel Rosa pledguilty to an Accusation charging him withsimulating a motor vehicle insurance identifi-cation card. Rosa admitted that, following amotor vehicle accident in which he was in-volved, he presented a phony Public ServiceMutual Insurance Company auto insuranceidentification card to a Passaic police officer.He will be sentenced in early 2007.State v. Latosha R. Smith

On December 18, 2006, Latosha R. Smithpled guilty to an indictment charging herwith simulating a motor vehicle insuranceidentification card. On the same day, she wassentenced to one year probation. Accordingto the indictment, Smith presented a phonyProformance Insurance Company auto insur-ance identification card to a Burlington Citypolice officer during a routine traffic stop.State v. Salvatore L. Vitale

On June 12, 2006, a Monmouth CountyGrand Jury returned an indictment chargingSalvatore L. Vitale with simulating a motorvehicle insurance identification card. Ac-cording to the indictment, on August 19 andAugust 20, 2004, Vitale allegedly created aphony motor vehicle insurance identificationcard and also allegedly exhibited or displayeda different phony insurance identificationcard to an Englishtown police officer.

With respect to the insurance identifica-tion card which the indictment alleges wasproduced, it purportedly represented thatVitale was insured by the New Jersey Ex-change Insurance Company and that a validpolicy of automobile insurance was in effectfrom October 29, 2003, to October 29,2004. The insurance policy purportedly cov-ered a 1996 Chevrolet. The State alleges thatthe card was phony.

The State also alleges that Vitale displayeda different counterfeit automobile insuranceidentification card to an Englishtown policeofficer. That card allegedly indicated that a2001 Mercedes Benz automobile was cov-ered with a policy of automobile insuranceissued by Allstate Insurance Company for theperiod August 19, 2004, to August 19, 2005.State v. John Musso

On September 18, 2006, John Musso pledguilty to tampering with public records andinformation. On November 17, 2006, thecourt sentenced him to one year probationand ordered him to forfeit his public employ-ment. A Cumberland County Grand Jury re-

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turned an indictment on June 7, 2006, charg-ing Musso with tampering with publicrecords or information and simulating a mo-tor vehicle insurance identification card. Ac-cording to the indictment, between Decem-ber 28, 2004 and January 8, 2005, Musso al-legedly presented a fictitious insurance iden-tification card to the MVC Inspection Sta-tions at Millville and Bridgeton. The allegedfalse insurance identification card reflectedthat Selective Insurance Company providedinsurance for Musso’s automobile when, infact, Musso had no insurance. The State fur-ther alleged that Musso falsely registered a1990 Dodge Caravan by representing that itwas covered by a Liberty Mutual Insurancegroup policy when, in fact, it was not.State v. Larry Murphy, et al.

On September 6, 2006, a Mercer CountyGrand Jury returned an indictment chargingLarry Murphy and his wife Charlotte Murphywith conspiracy, simulating a motor vehicleinsurance identification card, tampering withpublic records, and falsifying records. Ac-cording to the indictment, between July 1,2005 and September 30, 2005, Larry andCharlotte Murphy allegedly produced andsold phony automobile insurance identifica-tion cards. Specifically, the State alleged thatthey conspired to produce a phony LibertyMutual Insurance Company auto insuranceidentification card and a phony State FarmInsurance Company auto insurance identifi-cation card in the name of Kai A. Harris. OnOctober 15, 2005, Charlotte Murphy wasarrested by the New Jersey State Police inconnection with allegedly registering a carusing a phony Prudential Insurance Companyauto insurance identification card. On Sep-tember 29, 2005, Larry Murphy was arrestedand charged in connection with the allegedphony insurance identification card scam.

The arrests were the result of an under-cover investigation conducted by OIFP in-vestigators into the production and sale ofphony insurance identification cards. Fakeinsurance identification cards are sold onthe street for prices ranging from $200 to$500. They are displayed to police officersand MVC officials so that it appears thatthe person showing a fake insurance identi-fication card has the appropriate automo-bile insurance.State v. Juan Diaz-Mata

On October 31, 2006, a Passaic CountyGrand Jury returned an indictment chargingJuan Diaz-Mata with simulating a motor ve-

hicle insurance identification card. Accord-ing to the indictment, Diaz-Mata was in-volved in a motor vehicle accident and al-legedly provided a phony New Jersey Re-Insurance Company auto insurance identifi-cation card to a police officer at the sceneof the accident.State v. Cecilio Casablanca

On November 29, 2006, an Essex CountyGrand Jury returned an indictment chargingCecilio Casablanca with simulating a motorvehicle insurance identification card. Ac-cording to the indictment, Casablanca wasinvolved in a motor vehicle accident and al-legedly provided a phony New Jersey Manu-facturers Insurance Company auto insuranceidentification card to a Belleville police of-ficer at the scene of the accident.State v. Maria D. Colon Cifuentes

On November 3, 2006, a Union CountyGrand Jury returned an indictment chargingMaria D. Colon Cifuentes with simulating amotor vehicle insurance identification card.According to the indictment, ColonCifuentes presented a fictitious Amica Insur-ance Company auto insurance identificationcard to a motor vehicle inspector at thePlainfield MVC Inspection Station.State v. Rafael Ottenwalder

On October 12, 2006, RafaelOttenwalder pled guilty to an Accusationcharging him with sale of a simulated NewJersey drivers license and sale of a simulatedmotor vehicle insurance identification card.Ottenwalder admitted that in May and Juneof 2005, he knowingly sold a fictitious NewJersey drivers license and a fictitious NewJersey auto insurance identification card toan undercover OIFP investigator in UnionCity. Ottenwalder is scheduled to be sen-tenced in early 2007.State v. Miguel Torres

On December 6, 2006, Miguel Torres pledguilty to an Accusation charging him withsimulating a motor vehicle insurance identifi-cation card. Torres admitted that he pre-sented a counterfeit American National FireInsurance Company auto insurance identifi-cation card to a West New York police of-ficer following an automobile accident inwhich he was involved. He is scheduled tobe sentenced in 2007.State v. Francerly Padilla

On September 8, 2006, a Union CountyGrand Jury returned an indictment charging

Francerly Padilla with simulating a motorvehicle insurance identification card. Ac-cording to the indictment, Padilla allegedlypresented a fraudulent Allstate InsuranceCompany auto insurance identification cardto an inspector at the Rahway MVC Inspec-tion Station.State v. Charles R. Bright

On August 21, 2006, a Monmouth CountyGrand Jury returned an indictment chargingCharles R. Bright with simulating a motorvehicle insurance identification card. Ac-cording to the indictment, Bright allegedlypresented a fraudulent Prudential InsuranceCompany auto insurance identification cardto an inspector at the Eatontown MVC In-spection Station.State v. Tinyetta Watkins

On October 2, 2006, the court admittedTinyetta Watkins into the PTI Program con-ditioned upon her performing 50 hours ofcommunity service. On July 12, 2006, a Mer-cer County Grand Jury returned an indictmentcharging Watkins with simulating a motor ve-hicle insurance identification card. Accordingto the indictment, Watkins was involved in amotor vehicle accident. Watkins allegedly pre-sented a fraudulent First Trenton IndemnityCompany auto insurance identification card tothe police officer who responded to the sceneof the accident.State v. Dante M. Fox

On November 28, 2006, a BurlingtonCounty Grand Jury returned an indictmentcharging Dante M. Fox with simulating a mo-tor vehicle insurance identification card. Ac-cording to the indictment, Fox presented afraudulent CAN Insurance Company auto in-surance identification card to a Burlington Citypolice officer during a routine traffic stop.State v. Marta L. Sanaallah

On September 8, 2006, a Union CountyGrand Jury returned an indictment chargingMarta Sanaallah with simulating a motor ve-hicle insurance identification card. Accordingto the indictment, Sanaallah allegedly presenteda fraudulent Allstate Insurance Company autoinsurance identification card to an inspector atthe Rahway MVC Inspection Station.State v. Leonna Brown

On September 22, 2006, the court admit-ted Leonna Brown into the PTI Program.On July 17, 2006, Brown pled guilty to anAccusation charging her with attemptedtheft by deception. Brown allegedly was in-

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volved in a motor vehicle accident in Phila-delphia in which she struck a parked car. Shealso allegedly presented a phony State FarmIndemnity Company auto insurance identifi-cation card to the owner of the vehicle shestruck. When the owner of the struck ve-hicle submitted a claim to State Farm, StateFarm determined that the card was fraudu-lent and referred the matter to OIFP for in-vestigation.State v. Karen Y. Schenck-Heuston

On September 27, 2006, a SomersetCounty Grand Jury returned an indictmentcharging Karen Y. Schenck-Heuston withsimulating a motor vehicle insurance identifi-cation card. According to the indictment,Schenck-Heuston presented a counterfeitMaryland Casualty Insurance Company autoinsurance identification card to the State Po-lice while attempting to obtain her vehiclefrom a State Police impound lot.State v. Alfred R. Cole

On November 27, 2006, an Essex CountyGrand Jury returned an indictment chargingAlfred R. Cole with simulating a motor ve-hicle insurance identification card. Accordingto the indictment, on April 7, 2006, Colepresented a counterfeit New Jersey Manufac-turers auto insurance identification card to aVerona police officer while attempting to gethis 1994 Lexis released from the police de-partment impound lot.

Vehicle TheftOperation Ninja IState v. Torray A. Murphy, et al.

OIFP and the State Police conducted ajoint investigation of a conspiracy to stealmotorcycles, to alter the Vehicle Identifica-tion Number (VIN) of each motorcycle toconceal the true identity and ownership ofthe motorcycles in a process known as“stamping,” and to otherwise obtain falsetitle documents and registrations for thestolen materials. As a result of the joint in-vestigation, 23 persons were arrested onMay 4, 2005, for their roles in a motorcycletheft ring that operated in Mercer andBurlington Counties. The defendants werevariously charged with racketeering, con-spiracy, Insurance Fraud, receiving stolenproperty, and fencing.

Among the 23 persons arrested were KyleJ. Bunn, Ronald R. Crosland, GregoryHaygood, Jamar L. Doggett, and John White,who were each charged with theft by unlaw-

ful taking, receiving stolen property, andfencing. The State alleged that the defen-dants conspired to steal 16 motorcycles val-ued at approximately $97,225 in BurlingtonCounty. The State further charged defen-dants with 23 separate instances of allegedlyreceiving stolen motorcycles valued at ap-proximately $153,557, and 12 separate in-stances of allegedly fencing stolen motor-cycles valued at approximately $83,857.

The investigation is continuing and furthercharges are anticipated. The following dispo-sitions occurred in 2006:

On August 7, 2006, Janine Barnes pledguilty to an Accusation charging her with re-ceiving stolen property. On November 3,2006, the court sentenced her to a one-yearprobationary sentence and ordered her to pay$1,592 in restitution to GEICO InsuranceCompany and $675 in restitution to RiderInsurance Company.

Randolph Brolo pled guilty to an Accusa-tion charging him with receiving stolen prop-erty. On January 6, 2006, the court sen-tenced him to two years probation.

Rodney Butler pled guilty to an Accusa-tion charging him with receiving stolenproperty. On January 27, 2006, the courtsentenced him to a one-year probationarysentence and ordered him to pay $1,861in restitution.

On January 27, 2006, Rodney Westpled guilty to an Accusation charging himwith Insurance Fraud. On March 17,2006, the court sentenced him to a two-year probationary sentence and orderedhim to pay $2,350 in restitution to RiderInsurance Company.

On June 5, 2006, David Schall pled guiltyto an Accusation charging him with alterationof motor vehicle identification numbers. OnDecember 12, 2006, the court admitted himinto the PTI Program conditioned upon himpaying $2,500 in restitution.

On June 12, 2006, Alan Barbosa pledguilty to an Accusation charging him withreceiving stolen property. On the same day,the court sentenced him to a one-year proba-tionary sentence.Operation Ninja IIState v. Ian Boyington, et al.

In this continuing joint State Police andOIFP investigation, the following defen-dants were issued summonses or were ar-rested in 2006:

Ian Boyington - On October 12, 2006, asummons was issued and Boyington wascharged with possession of a motor vehiclewith an altered vehicle identification number(VIN), and a motor vehicle title offense;

Neil Moyer - On November 8, 2006, asummons was issued and Moyer was chargedwith receiving stolen property and fencing;

Steven Capers was arrested on November30, 2006, and charged with receiving stolenproperty, unlawful taking, possession of amotor vehicle with an altered vehicle identi-fication number (VIN), a motor vehicle titleoffense, and tampering with public recordsor information;

Gabriel Allen Evans was arrested on De-cember 6, 2006, and charged with theft byunlawful taking, receiving stolen property,and alteration of a motor vehicle identifica-tion number (VIN);

Jeffrey Morgan was arrested on December6, 2006, and charged with theft by unlawfultaking, receiving stolen property, alterationof a motor vehicle identification number(VIN), and fencing;

Gregory Kellum - On December 12,2006, a summons was issued and Kellumwas charged with theft by unlawful takingand receiving stolen property.Operation Wire HarnessState v. Reyniz Moran, et al.

The Fort Lee Police Department arrestedReyniz Moran, Edward Peralta, and WilsonBurgos during a traffic stop. All were chargedwith possession of burglary tools, possessionof motor vehicle master keys, and receivingstolen property. Fort Lee Police contactedOIFP because they obtained evidence consis-tent with theft of cars and motorcycles. Ad-ditional charges against Moran and Peraltawere filed including receiving stolen prop-erty, alteration of VINs, and possession withintent to distribute. The case is pendingGrand Jury action.State v. Krzysztof Walentynowicz, et al.

On October 16, 2006, KrzysztofWalentynowicz pled guilty to receiving sto-len property. On December 11, 2006, thecourt sentenced him to three years probationand ordered him to perform 60 hours ofcommunity service. On July 26, 2006, aUnion County Grand Jury returned an in-dictment charging Walentynowicz with re-ceiving stolen property and prohibited alter-ation of motor vehicle trademark or identifi-

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cation number. According to the indictment,in Cranford, Walentynowicz allegedly pos-sessed a 2001 BMW 330, a 2001 Audi S4, a2002 Jeep Grand Cherokee, a 2002 JeepLimited, a 2002 GMC Denali, and two 2002Cadillac Escalades, knowing they were sto-len. The State alleged that Walentynowiczpossessed these automobiles in order to re-tag them or chop them into parts.

On August 16, 2006, Lukasz Zalewskipled guilty to an Accusation charging himwith receiving stolen property. Zalewski ad-mitted that he had possession of a 2002 JeepLimited, a 2001 BMW 330, a 2001 Audi S4,a 2002 Jeep Grand Cherokee, a 2002 GMCDenali, and two 2002 Cadillac Escalades,knowing they were stolen. Zalewski admit-ted that he possessed these automobiles inorder to re-tag them or chop them into parts.He is scheduled to be sentenced in 2007.State v. Jaguar Kevin Reed

On August 8, 2006, an Essex CountyGrand Jury returned an indictment chargingJaguar Kevin Reed with receiving stolenproperty. According to the indictment, onJuly 18, 2005, Reed allegedly knowingly pos-sessed and sold a re-tagged Cadillac Escalade.A re-tagged automobile is an automobile inwhich the VIN is removed so that anotherVIN can be inserted. By changing the VINplates, thieves are able to conceal the trueidentity of the car and the fact that it hasbeen reported stolen. This facilitates resaleof the car.Operation Rice BurnersState v. Michael Campo, et al.

On November 1, 2006, OIFP investiga-tors obtained arrest warrants for nine tar-gets, Michael Campo, Ramon Carrillo,Reginald Lee, Ronald Bennett a/k/a “FatMan,” Frazier Gibson, Eddie Lee, AjonRodgers, James Campbell, and an unidenti-fied person known only as “T.” Also, searchwarrants were executed at a residence and agarage. The defendants were charged withreceiving stolen property and bail was set at

amounts ranging from $25,000 to $100,000.These cases are pending presentation to theGrand Jury.State v. Jose Suarez, et al.

On November 15, 2006, OIFP investiga-tors obtained an arrest warrant for JoseSuarez. Suarez was charged with receivingstolen property and leader of an auto traffick-ing network. The State alleged that Suarezconspired with others to dispose of and trans-port stolen vehicles, including four motor-cycles and at least ten stolen automobiles.

As part of the Suarez investigation, onNovember 15, 2006, OIFP investigators ob-tained arrest warrants for Janny Lopez andJoshua Provost. Provost and Lopez werecharged with receiving stolen property, in-cluding an allegedly stolen Yamaha motor-cycle and a Nissan 350Z automobile.State v. Luis Marte

On December 8, 2006, a Union CountyGrand Jury returned an indictment chargingLuis Marte with conspiracy, receiving stolenproperty, and attempted fencing. Accordingto the indictment, between November 14,2003 and January 4, 2006, Marte allegedlyconspired with others, who were not furtheridentified in the indictment, to take posses-sion of a stolen 2004 Cadillac Escalade. TheState alleges that Marte illegally obtained aMichigan title for the Cadillac Escalade,which was allegedly stolen from an autodealership in Great Neck, New York. Fre-quently, persons who traffic in stolen carsobtain out-of-state automobile titles and re-tag or change the Vehicle IdentificationNumbers (VIN) on stolen cars to conceal thetrue identity of the car and the fact that ithas been stolen.

HEALTH, LIFE,AND DISABILITY FRAUDFraudulent Health and Disability Claimsby Health Care ProvidersState v. Philip Potacco

On January 20, 2006, the court sentencedPhilip Potacco to three years probation andordered him to pay $48,000 in restitution toNew Jersey Manufacturers Insurance Com-pany, First Trenton Insurance Company, andState Farm Insurance Company. Potacco pledguilty to theft by deception. A State GrandJury previously returned an indictment charg-ing Potacco with Health Care Claims Fraudand attempted theft by deception. Accordingto the indictment, Potacco allegedly contin-

ued to practice chiropractic medicine for ap-proximately four years in Little Falls Town-ship in Passaic County and South Orange inEssex County even though his license hadbeen suspended by the Board of ChiropracticExaminers on several occasions.

Despite not having a valid license topractice chiropractic medicine, Potaccobilled automobile insurance companies fortreating automobile accident patients undertheir PIP insurance. Potacco billed approxi-mately $98,175 to multiple carriers. The in-surance companies paid Potacco approxi-mately $48,022.State v. William Burke, et al.

A State Grand Jury returned an indict-ment charging William Burke and

licensed cardiologists, withconspiracy, Health Care Claims Fraud, andattempted theft by deception. According tothe indictment, Burke prac-ticed at Orange Mountain Medical Associateswhich had offices located in West Orange,Berkeley Heights, and Millburn. They alleg-edly submitted false insurance claims to in-surance companies between January 1,1997,and February 5, 2002. The State alleged thatthe doctors agreed to prescribe unnecessarycardiac diagnostic tests that were inconsis-tent with their patients’ ailments. The Statealso alleged that although the patients hadinsufficient cardiac symptoms to justify theadministration of stress tests and electrocar-diograms, the doctors administered thoseprocedures and allegedly provided question-able cardiac-related diagnoses in order to billinsurance companies for the cardiac-relatedmedical tests at a higher specialist rate. Thedoctors allegedly submitted fraudulent billsto multiple insurance companies, includingPrudential Insurance Company and AetnaInsurance Company. The insurance compa-nies received at least $35,000 in allegedlyfalse bills. Burke are scheduledto go on trial in 2007.State v. W. Lance Kollmer

On May 8, 2006, W. Lance Kollmer pledguilty to theft by deception. On September7, 2006, the court sentenced Kollmer tothree years in state prison and ordered him topay $925,171 in restitution and a $100,000civil insurance fraud fine.

A State Grand Jury previously returnedthree separate indictments against Kollmer.The third indictment charged Kollmer, aboard certified plastic surgeon, with theft bydeception and attempted theft by deception.

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Kollmer submitted allegedly false insuranceclaims between August 2001 and March2004, to U.S. Life/American General Insur-ance Company and the Hartford InsuranceCompany falsely claiming he was totally dis-abled, unable to practice medicine, and en-titled to be reimbursed for office overheadexpenses and other disability insurance claimpayments. U.S. Life/American General In-surance Company and the Hartford Insur-ance Company paid approximately $614,825for these claims through January 2004.

The first indictment charged Kollmer withsubmitting false disability insurance claims toSentry Insurance Company and AmericanGeneral Insurance Company. Kollmer alleg-edly obtained more than $300,000 in fraudu-lent insurance claim money from Sentry In-surance Company and American General In-surance Company by falsely claiming he wastotally disabled from practicing as a plasticsurgeon. However, Kollmer allegedly per-formed dozens of surgical procedures duringthe claimed disability period. The second in-dictment charged Kollmer with theft by de-ception. Kollmer allegedly falsely claimed hewas totally disabled, and, pursuant to a con-tract between himself and Unum ProvidentCorporation, entitled to a waiver of $9,000in life insurance premiums.Fraudulent Billing by Health CareProvidersState v. Paul Anodide

On April 28, 2006, the court sentencedPaul Anodide to four years probation. Hewas also sentenced to 180 days in county jail,suspended on the condition that he serve 20days in the SLAP program. The court or-dered him to perform 100 hours of commu-nity service and pay a $5,000 criminal fine.His dentist’s license was suspended for lifeand he was barred from applying for rein-statement of his license. Anodide pled guiltyto theft by deception. A State Grand Jurypreviously returned an indictment chargingAnodide with Health Care Claims Fraud,theft by deception, and falsifying records.According to the indictment, Anodide, a li-censed dentist with an office in Trenton,submitted bills to three insurance carriers forapproximately 28 patients with more than75 allegedly fraudulent dental insuranceclaims. The claims totaled approximately$85,914 and the carriers paid approximately$62,846 on the claims. The allegedly fraudu-lent claims included claims for root canals,crowns, and fillings. All of the services thatwere billed to the carriers were not rendered

to the patients. Anodide also submittedclaims for Sunday dental services when thedental office was closed on Sundays. Ac-cording to the indictment, Anodide also sub-mitted claims for crowns and root canalsthat were allegedly performed twice on thesame tooth. Anodide submitted fraudulentclaims to several insurance carriers, includingPrudential Health Care of New Jersey, AetnaUS Healthcare, and Delta Dental InsuranceCompany. Prudential was the third partyclaims administrator for the New JerseyState Health Dental Plan that provides den-tal services to State employees. Prudentialprocessed Anodide’s allegedly fraudulentdental insurance claims that were paid withState money.State v. Craig W. Gordon

On May 9, 2006, Craig W. Gordon pledguilty to Health Care Claims Fraud and tothe practice of medicine by an unlicensedperson. On June 9, 2006, the court sen-tenced him to five years probation and or-dered him to pay a $1,100 criminal fine.

On January, 4, 2006, a Morris CountyGrand Jury returned an indictment chargingGordon with Health Care Claims Fraud,theft by deception, and practice of medicineby an unlicensed person. According to theindictment, between January 26, 2000 andJanuary 9, 2001, Gordon, a doctor who waslicensed to practice medicine in the State ofNew York but whose license was revoked inMarch1995, operated a business known asGFM Health Services which operated out ofGordon’s residence in Chatham, New Jersey.Gordon caused fraudulent claims to be sub-mitted to Horizon Blue Cross Blue Shield ofNew Jersey through the Medicare programfor treatments to two patients. The State al-leged that the claims created the false im-pression that health care services had beenprovided by Jaime Ligot, M.D., when, infact, they were either provided by Gordon,who is not a licensed practitioner, or notprovided at all. The State alleged that Hori-zon Blue Cross Blue Shield of New Jerseypaid approximately $10,966 in fraudulentclaims submitted by Gordon.State v. Mark Radowitz

On April 21, 2006, the court sentencedMark Radowitz to three years in state prisonand ordered him to pay $16,700 in restitu-tion. On January 30, 2006, Radowitz pledguilty to Health Care Claims Fraud. A StateGrand Jury previously returned an indict-ment charging Radowitz with Health CareClaims Fraud, theft by deception, and falsify-

ing records. According to the indictment, be-tween July 2, 1999 and September 5, 2000,Radowitz allegedly billed both Allstate In-surance Company and the California StateWorkers’ Compensation Insurance Fund formultiple chiropractic services allegedly pro-vided to two patients. The State alleged thatthe chiropractic services billed to Allstateand the California State Workers’ Compensa-tion Insurance Fund were not rendered eventhough Radowitz billed for them. The Statefurther alleged that Radowitz billed on ap-proximately 179 dates for approximately$16,000 in chiropractic treatments neverrendered to two patients.State v. Eugene Ruta, et al.

On April 3, 2006, Eugene Ruta pled guiltyto conspiracy and Health Care Claims Fraud.On the same day, Andrew Farro pled guiltyto conspiracy to commit Health Care ClaimsFraud and Criminal Use of Runners. OnSeptember 22, 2006, the court sentencedRuta to 364 days in county jail as a conditionof three years probation. Farro will be sen-tenced in 2007. A State Grand Jury previ-ously returned an indictment charging Rutaand Farro with conspiracy, Health CareClaims Fraud, and Criminal Use of Runners.Ruta was a licensed chiropractor formerlyemployed at Valley Total Health Center inOrange. Farro was also formerly employed asan office manager at Valley Total HealthCenter. According to the indictment, Farroallegedly agreed to pay a “runner,” who wascooperating with OIFP, $500 for every pa-tient the “runner” could bring to Valley TotalHealth Center. The indictment further al-leged that insurance claims were submittedto an insurance company for patients solic-ited for Valley Total Health Center, in addi-tion to claims for chiropractic services thatwere never rendered to patients. The pa-tients the “runner” solicited, and anotherperson to whom Farro paid money as a “run-ner,” were all undercover OIFP investiga-tors. Additionally, an undercover Newarkpolice officer posed as a patient. The indict-ment charged that the defendants paid ap-proximately $2,000 to persons who posed as“runners.”

The State further alleged in the indictmentthat Ruta committed Health Care ClaimsFraud by permitting his office manager,Farro, to submit claims to insurance compa-nies for services not rendered. The State alsoalleged that Ruta knew that Farro used a“runner” to solicit patients for Valley TotalHealth Center. In total, bills for approxi-

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mately $12,499 were allegedly submitted toParkway Insurance Company for “runner”solicited patients and Parkway paid approxi-mately $5,945 on these claims to Valley TotalHealth Center.State v. Juan Carlos Fischberg, et al.

On October 11, 2006, a State Grand Juryreturned an indictment charging Juan CarlosFischberg and his wife, Gezel Villanueva,with money laundering, conspiracy, HealthCare Claims Fraud, theft by deception, falsi-fying medical records, and false swearing. Ac-cording to the indictment, between January1, 1998 and August 22, 2003, Fischberg, aboard certified doctor, owner and operatorof Hudson Rehabilitation and Medical Cen-ter, allegedly defrauded 17 insurance compa-nies by falsely stating that his patients wereinjured and suffered from medical condi-tions, primarily as a result of automobile ac-cidents. The State alleges that Fischbergfalsely claimed that it was necessary for himto perform electro-diagnostic testing in orderto diagnose and treat these medical condi-tions and bill auto insurance companies. TheState also alleges that, between March 5,2003 and December 31, 2003, Fischberg andhis wife, Gezel Villanueva, conspired tocommit money laundering by transferringover $500,000, which was derived fromtheft and health care claims fraud committedagainst various auto insurance companies, toSouth America and to the Capital TrustCompany of Delaware. It is further allegedthat the money was transferred to concealthe nature, location, source, ownership, orcontrol of the money and to hide the factthat it was money allegedly obtainedthrough the submission of false insuranceclaims. Fischberg and Villaneuva failed toappear at their arraignment on November14, 2006. The court issued a bench warrantfor their arrest.State v. Evelyn Wilson

On November 14, 2006, Evelyn Wilsonpled guilty to an Accusation charging herwith theft by deception. Between August 20,2001 and June 16, 2004, Wilson, a formerclinical social worker and marriage and fam-ily therapist, submitted insurance claims toHorizon Blue Cross Blue Shield for socialwork, marriage counseling, and family thera-pist services which were never rendered topatients or clients. Specifically, Wilson ad-mitted that she submitted claims for severalhundred therapy sessions for which she ren-dered no service to any patient or client. Sheadmitted that as a result of these phony sub-

missions, she stole approximately $109,500from Horizon Blue Cross Blue Shield. Wilsonis scheduled to be sentenced in early 2007.False Health Care ClaimsState v. Olivette Henderson, et al.

On November 27, 2006, the court sen-tenced Olivette Henderson to three yearsprobation and ordered her to pay $3,000 inrestitution. Henderson pled guilty to HealthCare Claims Fraud and theft of identity. AState Grand Jury previously returned an in-dictment charging Henderson with HealthCare Claims Fraud and attempted theft bydeception. According to the indictment, be-tween December 11, 2000 and March 12,2001, Henderson utilized the insurance iden-tification information of Quivier Richardsonto obtain medical services. The medical ser-vices included foot surgery and related medi-cal bills for approximately $44,745. The billswere submitted to the CIGNA Property andCasualty Insurance Company and CIGNApaid approximately $7,550.

On October 13, 2006, Quivier Richardsonpled guilty to Health Care Claims Fraud. OnNovember 27, 2006, the court sentenced herto three years probation and ordered her topay $3,000 in restitution. On March 9, 2006,a State Grand Jury returned a separate indict-ment charging Richardson with conspiracy,Health Care Claims Fraud, and theft by de-ception for providing her health insuranceidentification card to Olivette Henderson.State v. John Lundy

On November 2, 2006, a Camden CountyGrand Jury returned an indictment chargingJohn Lundy with Health Care Claims Fraudand attempted theft by deception. Accordingto the indictment, between September 25,1998 and May 1, 2002, Lundy allegedlymade false statements and created the falseimpression that he was a licensed physicaltherapist in New Jersey in order to submitinsurance claims, predominately automobilePIP insurance claims, to several automobileinsurance companies, including Liberty Mu-tual Insurance Company, Allstate InsuranceCompany, First Trenton Indemnity Com-pany, and State Farm Insurance Company.The State further alleges that Lundy fraudu-lently billed approximately $300,000 forphysical therapy claims to the insurancecompanies and collected approximately$133,760. Lundy allegedly operated his ille-gal physical therapy business, known asTravel Fitness, in Blackwood.

State v. Thomas J. Lagno

On June 19, 2006, the court sentencedThomas J. Lagno to three years probationand ordered him to pay $5,893 in restitutionand a $5,000 civil insurance fraud fine. OnApril 6, 2006, Lagno pled guilty to an Accu-sation charging him with Health Care ClaimsFraud. Lagno admitted that, between Febru-ary 29 and August 30, 2004, he fraudulentlycaused claims for prescription drugs andmedical treatment from physicians and othermedical service providers to be sent to aformer employer for payment. The formeremployer was Access Systems Integration(ASI) which is headquartered in Hazlet.Lagno had been an employee of ASI but hadterminated his employment and was nolonger entitled to prescription drug coveragenor other medical benefits as a result of thatemployment. The case was referred to OIFPwhen the benefits coordinator for ASI beganreceiving medical claims pertaining to Lagnoeven though he was no longer employed bythe company.

State v. Carol Ann Benvenuto

On June 30, 2006, the court sentencedCarol Ann Benvenuto to three months pro-bation and ordered her to pay a $5,000 civilinsurance fraud fine. On April 13, 2006,Benvenuto pled guilty to an Accusationcharging her with theft by deception.Benvenuto admitted that, between August 7,2001 and September 10, 2002, she submit-ted phony health insurance claims to herhealth insurance company. She admitted thatshe worked as a receptionist for a doctor’soffice. She further admitted that she submit-ted insurance claim forms to Horizon Blue

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Cross Blue Shield seeking reimbursement formedical services which she neither receivednor paid to her employer doctors. In total,she fraudulently obtained approximately$1,935 for phony health insurance claimssubmitted to Horizon Blue Cross Blue Shieldto which she was not entitled.State v. Reginald Smithson

On May 8, 2006, Reginald Smithson pledguilty to theft by deception. On June 19,2006, the court sentenced him to four yearsprobation and ordered him to pay $1,550 inrestitution to State Farm Insurance Com-pany. An Essex County Grand Jury previ-ously returned an indictment chargingSmithson with theft by deception, InsuranceFraud, and forgery. According to the indict-ment, Smithson allegedly submitted a phonyreceipt to State Farm showing he paid a hos-pital $1,001 for medical treatment related toinjuries sustained in an automobile accident.The State alleged that Smithson altered thereceipt and that the hospital treated him foran unrelated illness.State v. Harry Slough

On July 14, 2006, the court sentencedHarry Slough to two years probation and or-dered him to pay $5,757 in restitution to theState Health Benefits Plan. On May 24,2006, Slough pled guilty to an Accusationcharging him with theft by deception. Sloughadmitted that he wrongfully utilized the pre-scription insurance card coverage of hisformer wife to obtain prescription medi-cines. Slough and his former wife, a Depart-ment of Corrections sergeant, divorced onMay 1, 1997. Nonetheless, Slough admittedthat he obtained the prescription drug insur-ance card belonging to his former wife andutilized same to obtain prescription medi-cines even though he was no longer a depen-dent spouse entitled to her prescription in-surance benefit coverage. In total, two insur-ance companies, Aetna and Horizon BlueCross Blue Shield, paid a total of approxi-mately $5,756 for health insurance and pre-scription drug benefits to which Slough wasnot entitled.State v. Florentina Mauricio

On October 17, 2006, FlorentinaMauricio pled guilty to Health Care ClaimsFraud. On November 17, 2006, the courtsentenced her to two years probation and or-dered her to pay a $5,000 civil insurancefraud fine. On June 27, 2006, a MorrisCounty Grand Jury returned an indictmentcharging Mauricio with Health Care Claims

Fraud and attempted theft by deception.According to the indictment, between No-vember 22, 2003 and February 18, 2005,Mauricio claimed injury in an automobileaccident in which her disabled vehicle wasstruck by another car. As a result of the colli-sion, Mauricio allegedly sought medical treat-ment for her purported injuries. First TrentonIndemnity Company was allegedly billed ap-proximately $3,015 in connection withMauricio’s x-rays and approximately 23 visitsto her chiropractor. The insurance companysuspected fraud, denied the claim, and re-ferred the matter to OIFP for investigation.State v. Henry Robitaille, et al

On April 7, 2006, the court admittedHenry Robitaille into the PTI Program afterRobitaille pled guilty on January 5, 2006, toan Accusation charging him with Health CareClaims Fraud. Robitaille allegedly appearedat a medical treatment center seeking medi-cal treatment for Geraldine McKinneythrough fraud. Robitaille and McKinney mis-represented insurance information to person-nel at the medical treatment center by claim-ing that McKinney was Robitaille’s wife. TheState alleged that Henry Robitaille andGeraldine McKinney were not married andthat the insurance coverage of Robitaille’s wifewas improperly utilized to treat GeraldineMcKinney who fraudulently pretended to behis wife. Charges against McKinney, who iscurrently in Ireland, are pending.Fraudulent Disability ClaimsState v. John Rhody

On May 19, 2006, the court sentencedJohn Rhody to three years probation. Rhodypled guilty to falsification of records. AState Grand Jury previously returned an in-dictment charging Rhody with theft by de-ception, falsifying or tampering with records,and contempt of court. According to the in-dictment, between May 31, 2001 and July31, 2002, Rhody allegedly wrongfully col-lected disability insurance benefits from theStandard Insurance Company by submitting afalse disability claim. The State alleged thatRhody was actually working by buying andselling classic post cards on eBay and otherlocations while he was allegedly disabled andcollecting disability insurance. The State alsoalleged that by submitting false records abouthis disability, occupation, and income, Rhodywas in contempt of court in connectionwith a divorce action filed in MonmouthCounty Superior Court. Rhody was formerlyemployed as an attorney by the Ocean-Monmouth Counties Legal Services Office.

State v. Richard Segal

On May 8, 2006, the court admitted Rich-ard Segal into the PTI Program. An Accusa-tion was filed charging Segal with falsifyingrecords, theft by deception, and InsuranceFraud. The State alleged that Segal falsified adisability insurance claim form to indicatethat he was fully disabled, as opposed to par-tially disabled. Segal’s treating physician hadallegedly determined that he was only par-tially disabled.State v. Jonathan Siegel

On October 11, 2006, Jonathan Siegel pledguilty to attempted theft by deception. He isscheduled to be sentenced in early 2007. OnMarch 6, 2006, a Monmouth County GrandJury returned an indictment charging Siegelwith attempted theft by deception and utter-ing a forged document. According to the in-dictment, between January 26, 1998 and Sep-tember 7, 2001, Siegel committed disabilityinsurance fraud by wrongfully accepting dis-ability benefits from the Unum Life InsuranceCompany of North America. The State al-leged that Siegel, who was at one time a li-censed podiatrist in the State of New Jersey,worked for a large New Jersey and a NewYork law firm, but concealed the fact that hewas working and the amount of money hewas paid as an employee of the law firms, inorder to collect greater disability benefitsfrom Unum Life Insurance Company. Siegelhad filed a disability claim with Unum alleg-ing that he was injured and unable to work asa podiatrist, even though he was allegedlyworking and collecting a salary as an employeeof the two law firms.State v. Michelle Cannin

On April 28, 2006, the court sentencedMichelle Cannin to three years probation andordered her to pay $3,089 in restitution.Cannin pled guilty on March 6, 2006, to theftby deception. A State Grand Jury previouslyreturned an indictment charging Cannin withInsurance Fraud, theft by deception, forgery,and unsworn falsification. According to theindictment, Cannin allegedly submittedfraudulent insurance disability claim forms tothe New Jersey Department of Labor. TheState alleged those forms falsely indicated thata physician had certified that Cannin was un-able to work, was disabled, and, therefore,entitled to collect disability insurance pay-ments, when, in fact, Cannin had forgedrecords in the name of the physician to sup-port her fraudulent disability claim. In total,Cannin allegedly stole approximately $3,000in disability claim benefits.

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State v. Dennis Massimo

On November 3, 2006, the court sen-tenced Dennis Massimo to three years pro-bation and ordered him to pay $6,700 inrestitution. On September 14, 2006,Massimo pled guilty to an Accusation charg-ing him with theft by deception. Massimo,who was formerly employed by the NewJersey Department of Banking and Insur-ance (DOBI), admitted that, between June21, 2003 and October 10, 2003, he wrong-fully collected temporary disability benefitswhile absent from his employment withDOBI. Massimo admitted that while he wasreceiving temporary disability benefits fromthe State as a result of his absence from hisposition with DOBI based on a medical dis-ability, he worked as a general contractoremployed by an auto group. As a generalcontractor, Massimo admitted receipt ofapproximately $123,704 in income from theauto group while he was collecting $432 perweek in temporary disability benefits fromthe State.State v. Barbara Jean Potts

On December 22, 2006, the court sentencedBarbara Jean Potts to three years probation andordered her to pay $3,169 in restitution and a$100 criminal fine. On November 9, 2006,Potts pled guilty to an Accusation charging herwith theft by deception. Potts admitted that,between April 19 and June 19, 2005, shewrongfully collected workers’ compensationtemporary disability benefits. Potts allegedlycollected temporary disability benefits from heremployer due to a work-related injury whileconcealing the fact that she was employed else-where by another company.State v. John Ponticello

On December 6, 2006, John Ponticellopled guilty to an Accusation charging himwith theft by deception. Ponticello admit-ted that, between August 22, 2003 andNovember 7, 2005, he submitted false dis-ability claims to the JMIC Life InsuranceCompany claiming that he was disabled sothat JMIC Life would pay $425 per monthto the Ford Motor Company on his(Ponticello’s) behalf in repayment of an au-tomobile loan Ponticello incurred. TheState alleged that, over a period of ap-proximately 17 months, Ponticello submit-ted false disability claims with fraudulentdoctors’ signatures to JMIC Life in orderfor JMIC Life to pay $10,563 to the FordMotor Company for his auto loan. He isscheduled to be sentenced in 2007.

Health Insurance Underwriting/Application Fraud

State v. Direct Home, Inc.

On April 13, 2006, Direct Home, Inc.,pled guilty to theft by failure to make re-quired disposition of property received. OnJune 30, 2006, the court sentenced DirectHome, Inc., to pay $2,308 in restitution andpay a $1,000 criminal fine. On January 26,2006, a Somerset County Grand Jury re-turned an indictment charging Direct Home,Inc., a housewares distributor, with theft bydeception. According to the indictment, be-tween April 14, 2001 and May 8, 2001, Di-rect Home, Inc., wrongfully accepted ap-proximately $2,500 in health insurance premi-ums from an individual for the employer-sponsored group health insurance plan main-tained by Direct Home, Inc. The State allegedthat Aetna Insurance Company provided theinsurance coverage for Direct Home, Inc.’semployees but was never forwarded the pre-miums paid to Direct Home, Inc., by the pur-ported insured who later learned that hishealth insurance had been cancelled.State v. John K. Hoover

On August 21, 2006, a State Grand Juryreturned an indictment charging John K.Hoover with Health Care Claims Fraud andtheft by deception. According to the indict-ment, Hoover, who was employed by SalemCounty as a Sheriff ’s Officer, allegedly falsi-fied employer sponsored health insurancerecords concerning his marital and family sta-tus. The State alleges that Hoover falsified ahealth insurance benefits form reflecting thathe was separated but still married to his wifeand that his stepdaughter remained his de-pendent for employer-sponsored health in-surance and related medical and prescriptiondrug benefits. The State further alleges thatthis information was false and that Hooverwas divorced and did not have dependents.The State also alleges that by falsifying thehealth insurance benefits forms and relatedrecords, Hoover wrongfully obtained in ex-cess of $17,641 in health care claims, pre-scription drug benefits, and insurance premi-ums paid by Salem County.State v. Bernard Gelman

On March 10, 2006, the court sentencedBernard Gelman to three years probation,and ordered him to pay $80,088 in restitu-tion and a $5,000 civil insurance fraud fine.Gelman pled guilty to an Accusation charg-ing him with theft by deception. Gelman ad-mitted that he wrongfully caused the Direc-tor of Risk and Insurance Management at hisplace of employment located in Gloucester

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City, to change the date that his son, KevinGelman, an attorney, left employment withthe company which was a provider of ad-ministrative services. At the time of the al-leged fraud, Bernard Gelman was a seniorexecutive with his employer’s parent corpo-ration. Gelman’s son, Kevin, allegedly endedhis employment with the company on April24, 1998, to start his own business. Shortlyafter leaving the company, Kevin Gelmanwas allegedly debilitated by illness and inju-ries caused by an accident. The State allegedthat Bernard Gelman then intentionally in-structed the company’s employees to alterthe date of his son’s resignation from thecompany so that he could obtain disabilityinsurance coverage under a new policy thatwent into effect after his son’s departure.Approximately $80,087 was allegedly ob-tained from Prudential Insurance Companyas a result of Bernard Gelman’s fraud.State v. Joseph Venziano

On November 21, 2006, a Cape MayCounty Grand Jury returned an indictmentcharging Joseph Venziano with Health CareClaims Fraud, theft by deception, and falsify-ing or tampering with records. According tothe indictment, between October 18, 2002and December 30, 2003, Venziano allegedlyfalsely represented that he remained marriedto his former wife so that she would be eli-gible as a dependent spouse for health insur-ance benefits. The State alleges that healthinsurance benefits were provided throughVenziano’s employer by the Aetna Life Insur-ance Company under a policy which benefitsended if the marriage ended. The State fur-ther alleges that since Superior Court recordsindicate that Joseph Venziano was divorcedon February 20, 1998, his former wife wasno longer eligible for dependent spousehealth insurance benefits under that policy.State v. Carol Magnes

On December 19, 2006, Carol Magnespled guilty to an Accusation charging herwith theft by deception. Magnes admittedthat, between July 28, 2003 and November28, 2005, she stole health insurance claimmoney from Oxford Health Plans by falselyenrolling Maria Gutierrez and Jon Magnes asif they were employees of her husband’s(Dr. Jeffrey Magnes) medical office when, infact, they were not. She admitted that by en-rolling them as employees, she was able toobtain lower cost small employer grouphealth insurance for Gutierrez and JonMagnes even though they were not employ-ees of the medical practice. Furthermore,

she admitted that medical claims were sub-mitted to Oxford for medical treatments forGutierrez and Jon Magnes even though theywere not entitled to the medical coverage.The State alleged that the medical claims to-taled approximately $81,000. She will besentenced in 2007.Life Insurance FraudState v. Atul K. Agarwala

On October 13, 2006, the court admittedAtul K. Agarwala, M.D., into the PTI Pro-gram and ordered him to pay a $30,000 civilinsurance fraud fine. On June 28, 2006, theState charged Agarwala by way of an Accu-sation with falsifying or tampering withrecords. According to the Accusation, be-tween September 4, 2001 and October 4,2001, Agarwala, together with a licensed in-surance agent, Aziz Chaundhry, allegedly at-tempted to falsify an insurance application inorder to obtain $1 million worth of life in-surance on the life of Agarwala’s brother,Mukul Agarwala. The State alleged that thelife insurance application was false becauseAgarwala did not disclose that MukulAgarwala had been killed in the attack onthe World Trade Center. Once EquitableLife Insurance Company determined thatMukul Agarwala had died in the attack onthe World Trade Center, the case was re-ferred to OIFP. Aziz Chaundhry previouslyentered into a consent agreement to pay acivil insurance fraud fine in the amount of$5,000 for his alleged role in attempting tofalsify the application.State v. Mary Maschuci

On June 19, 2006, Mary Maschuci pledguilty to an Accusation charging her with In-surance Fraud, theft by deception, attemptedtheft by deception, and uttering a forgeddocument. Maschuci admitted that, betweenJune 9, 2003 and April 20, 2005, she submit-ted false life insurance claims to a variety ofinsurance companies. The claims were alleg-edly false in that Maschuci had applied for lifeinsurance benefits on her own life, and, pos-ing as her daughter, Maschuci then contactedthe insurance companies indicating that MaryMaschuci had died. Maschuci then allegedlysubmitted false death certificates to the insur-ance companies and collected or attempted tocollect life insurance claim money.

In total, Maschuci allegedly attempted tocollect approximately $1,083,155 in life in-surance claim money and actually collected$738,409. The State alleged that false life in-surance claims were sent to nine insurance

companies, including Empire Indemnity In-surance Company, Individual AssuranceCompany, Protective Life Insurance Com-pany, AIG Insurance Company, Hartford Life& Accident Insurance Company, USAA LifeInsurance Company, Minnesota Life Insur-ance Company, Allstate Insurance Company,and Conseco Insurance Company. Maschuciwill be sentenced in 2007.State v. Kenneth Wilson

On September 7, 2006, the court sen-tenced Kenneth Wilson to five years in stateprison following his guilty plea to InsuranceFraud. Wilson admitted that, between June3, 2004 and October 30, 2004, he issuedfour worthless checks to Transamerica Occi-dental Life Insurance Company in connec-tion with premium payments for his term lifeinsurance policy which would have benefit-ted his fiancé. The four worthless checks al-legedly totaled $10,390 and were drawn onBotree Investments, LLC; Web-Loan; Ogle,Liles & Upshaw, LLP; and Metabolex, Inc.The State alleged that Wilson also attemptedto obtain a $6,888 loan from the insurancepolicy, but that loan was denied byTransamerica. At the time of sentencing,Wilson was incarcerated in South WoodsState Prison for unrelated charges filed bythe Burlington County Prosecutor’s Office.State v. Guy Cardinale

On November 29, 2006, Guy Cardinaleentered a guilty plea to an Accusation charg-ing him with issuing worthless checks. Headmitted that, between July 25, 2006 andAugust 28, 2006, he issued a worthless checkin the amount of $66,488 to Transamerica inconnection with the purchase of a life insur-ance policy. The check was dishonored bythe bank. Cardinale is scheduled to be sen-tenced in 2007.

Cardinale also pled guilty on November29, 2006, to theft by deception pursuant toan unrelated State Grand Jury indictment re-turned on July 28 2006. According to the in-dictment, between July and December 2002,Cardinale, who was employed as an agent forthe Canada Life Assurance Company, alleg-edly submitted life insurance policy applica-tions and supporting records to create theimpression that customers had purchasedvarious life insurance policies when, in fact,they had not purchased such policies. TheState alleged that Cardinale submitted thefraudulent documents to the Canada Life As-surance Company in order to collect morethan $346,025 in up-front commissions forfour fictitious sales of insurance policies.

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Drug Diversion

State v. Dawn M. Nehring

On July 13, 2006, a Burlington CountyGrand Jury returned an indictment chargingDawn M. Nehring with theft by deceptionand obtaining controlled dangerous sub-stances. According to the indictment, be-tween January 17, 2001 and October 16,2003, Nehring allegedly used the prescriptiondrug insurance benefits of her grandmother,mother, and brother to illegally obtain nar-cotic drugs. The State alleged that the pre-scriptions were filled at numerous pharma-cies and that Nehring wrongfully utilized theprescription drug benefit cards and relatedinformation to obtain the drugs. Several pre-scription drug insurance plans and laborunion prescription drug plans were allegedlyvictimized, to include Independence BlueCross Blue Shield, Aetna Insurance Company,and the Carpenters Pension and AnnuityFund of Philadelphia. The State alleged thatapproximately $61,052 in phony claims forprescription drugs were submitted as a resultof Nehring’s conduct and approximately$48,023 was paid by the insurance carriers orother prescription drug plans. On July 21,2006, Nehring was arrested by OIFP investi-gators. Her case is pending trial.State v. Gerald McGuigan

On March 8, 2006, Gerald McGuigan pledguilty to an Accusation charging him withtheft by deception. McGuigan admitted thathe submitted 82 phony prescription drugclaims to Caremark Insurance Company andMedco Health Solutions and that $11,220was paid for the prescriptions. On April 28,2006, the court sentenced McGuigan to 90days in county jail as a condition of a three-

year probationary sentence and ordered himto pay $11,220 in restitution. McGuigan waspreviously arrested by OIFP investigatorsand charged with Health Care Claims Fraud,theft by deception, obtaining controlled dan-gerous substances by fraud, and forgery. TheState alleged that McGuigan obtainedfraudulent prescriptions for OxyContin, acontrolled dangerous substance used prima-rily for treating chronic pain. The prescrip-tions were allegedly filled at a local pharmacyand issued to him in the name of his brother.Insurance claims were then sent to hisbrother’s prescription plan for payment.State v. Annabelle Tulud

On June 7, 2006, the court sentencedAnnabelle Tulud to four years probation andordered her to pay $14,129 in restitution. OnApril 11, 2006, Tulud pled guilty to an Accusa-tion charging her with obtaining controlleddangerous substance by fraud. Tulud, a regis-tered nurse who previously surrendered hernursing license, admitted that, between Octo-ber 29, 2003 and April 1, 2005, she obtainedprescription medication by submitting fraudu-lent prescriptions. She admitted that she ob-tained Actiq Fentanyl by submitting phony pre-scriptions to a pharmacy located in Livingston.She admitted that she had previously stolenblank prescription forms from her physician,filled them out as if her doctor had prescribedthe medication, and illegally obtained the nar-cotic prescription drug. The State alleged thatapproximately $14,129 in prescription drugswere obtained by fraud, and that MEDCO In-surance Company was fraudulently billed forthese prescription claims.

PROPERTY ANDCASUALTY FRAUDFalse Homeowners Insurance ClaimsState v. Richard Farber

On January 13, 2006, the court sentencedRichard Farber to four years in state prisonand ordered him to pay $2,069 in restitutionand a $2,500 civil insurance fraud fine.Farber pled guilty to an Accusation charginghim with theft by deception. Farber admit-ted that he submitted a false homeownersinsurance claim. Farber allegedly told Phila-delphia Contributionship Insurance Companythat a burglar stole his plasma television,digital camera, camcorder, notebook com-puter, and scanner, and supported his claimwith receipts showing purchases of the itemsfrom an appliance store, but Farber had re-turned the items to the store for a refund.

State v. Rita Farmer

On February 6, 2006, the court admittedRita Farmer into the PTI Program condi-tioned upon her performing 50 hours ofcommunity service and paying a $2,500 civilinsurance fraud fine. Farmer pled guilty to anAccusation charging her with forgery. Farmerallegedly submitted phony flooring companyreceipts to Hanover Insurance Company tosupport her homeowners insurance claim ofwater damage to her home.State v. Michael Oteri

On March 10, 2006, the court sentencedMichael Oteri to four years probation. OnJanuary 23, 2006, Oteri pled guilty to forg-ery. A Camden County Grand Jury previouslyreturned an indictment charging Oteri withforgery by uttering. According to the indict-ment, Oteri allegedly provided a phony boatdealership sales receipt to support his claimthat certain items were stolen from hishome, including fishing rods and other prop-erty related to boating.State v. Joseph Connors

On October 25, 2006, the court admittedJoseph Connors into the PTI Program condi-tioned upon him paying a $5,000 civil insur-ance fraud fine. On August 24, 2006,Connors pled guilty to an Accusation charg-ing him with falsifying records. Connors al-legedly submitted a false receipt which hadbeen changed from $683.22 to $1,683.22.The State alleged that the receipt was pur-portedly issued by a residential services com-pany which had repaired a home intercomand doorbell system at Connors’ home. Theintercom/doorbell system had allegedly beendamaged by lightening, and Connors allegedlyadded $1,000 to the receipt which was thensubmitted to Countryway Insurance Com-pany for reimbursement on a homeownersinsurance claim.State v. Steven Budge, et al.

On June 6, 2006, the court admittedSteven Budge, John Budge, and Frank Landinto the PTI Program and ordered each ofthem to pay a $500 criminal fine. A StateGrand Jury returned an indictment chargingSteven Budge, a Public Insurance Claims Ad-juster, his brother John Budge, and theiruncle Frank Land with attempted theft bydeception. According to the indictment, ahouse owned by Frank Land was allegedlydamaged as a result of winds that caused alarge tree limb to fall on the roof. The Statefurther alleged that Steven Budge, JohnBudge, and Frank Land inflicted further

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96

damage to the roof in order to inflate thehomeowners insurance claim to Liberty Mu-tual Insurance Company. The State also al-leged that Steven Budge submitted an ap-praisal to repair the roof to Liberty Mutualwhich was allegedly inflated by approxi-mately $60,000. Liberty Mutual, suspectingfraud, denied the claim and referred the caseto OIFP for further investigation.State v. Jill Ravitz

On or about October 13, 2006, Jill Ravitzwas dismissed from the Bergen County PTIProgram for failure to remain law abiding inthat she was charged in another, unrelatedcase. The court had admitted Ravitz into thePTI Program for a period of one year fol-lowing her guilty plea to an Accusationcharging her with attempted theft by decep-tion. Ravitz allegedly submitted ahomeowners insurance claim falsely claimingthat a $10,000 diamond ring was missing.The State alleged that Ravitz submitted theclaim after she received an appraisal for thediamond ring which she falsely claimed shepurchased. The carrier denied the claim andreferred the matter to OIFP for investiga-tion. She will be sentenced in 2007.State v. Sharon Knecht

On December 13, 2006, a MonmouthCounty Grand Jury returned an indictmentcharging Sharon Knecht with InsuranceFraud. According to the indictment, Knechtallegedly submitted an altered $1,800 art gal-lery estimate to State Farm Insurance Com-pany for a painting that was damaged from awater leak in her home. The State alleged thatthe art gallery estimate was actually $800.State v. Gilbert Noble

On December 11, 2006, Gilbert Noblepled guilty to an Accusation charging himwith Insurance Fraud. Noble admitted thatin June 2006, he submitted three altered re-ceipts to AAA Mid-Atlantic InsuranceGroup in support of his homeowners claimin connection with an alleged residential bur-glary. Allegedly, Noble’s insurance claim wasfor approximately $20,748. AAA Mid-Atlan-tic, suspecting fraud, denied the claim andreferred the matter to OIFP for investiga-tion. He will sentenced in 2007.Fraudulent Stolen/DamagedProperty ClaimsState v. James Eifler

On February 1, 2006, the court sentencedJames Eifler to one year probation and or-dered him to pay $780 in fines and penalties.

He had previously paid State Farm InsuranceCompany $3,830 in restitution. Eifler pledguilty to Insurance Fraud and forgery. AState Grand Jury had returned an indictmentcharging Eifler with Insurance Fraud, at-tempted theft by deception, and forgery. Ac-cording to the indictment, in November2003, Eifler allegedly submitted a claim forapproximately $6,017 to State Farm Insur-ance Company. Eifler alleged that someonestole certain plumbing tools from a shed onhis property. State Farm settled Eifler’s claimfor approximately $3,830. In February 2004,Eifler allegedly submitted additional claiminformation to State Farm seeking an addi-tional $6,000. In support of the secondclaim, Eifler allegedly submitted false re-ceipts reflecting the purchase of some of theplumbing tools he sought reimbursement forfrom State Farm Insurance Company.State v. Soena Sahni

On February 24, 2006, the court admittedSoena Sahni into the PTI Program condi-tioned upon her performing 75 hours ofcommunity service. Sahni pled guilty to anAccusation charging her with InsuranceFraud. Between March 13, 2004 and August31, 2004, Sahni allegedly submitted alteredand fraudulent computer rental receipts tothe Hartford Insurance Company to supporther claim that rented computer equipmentwas allegedly stolen from her place of busi-ness during a burglary.State v. David Guyton

On March 10, 2006, the court sentencedDavid Guyton to three years probation andordered him to pay a $2,500 civil insurancefraud fine. On January 5, 2006, Guyton pledguilty to a State Grand Jury indictmentcharging him with attempted theft by decep-tion. According to the indictment, betweenOctober 13, 1999 and August 15, 2001,Guyton allegedly falsified receipts in order toinflate a property insurance claim. The Statealleged that Guyton submitted a fraudulent$7,004 claim to the New Jersey InsuranceUnderwriting Association for the loss offour gas ranges and four refrigerators result-ing from a fire at an apartment building lo-cated at 22 Goodwin Avenue in Newark.Guyton allegedly falsified a number ofrecords in support of the claim.State v. Alan Rogoff

On July 25, 2006, the court admitted AlanRogoff into the PTI Program conditionedupon him performing 50 hours of commu-nity service. On June 20, 2006, an Accusa-

tion was filed charging Rogoff with Insur-ance Fraud. According to the Accusation,Rogoff allegedly submitted a phony lost/theft claim to State Farm Insurance Com-pany. The State alleges that Rogoff submit-ted a phony receipt for a diamond engage-ment ring in support of his claim that thering had been stolen, when, in fact, he hadreturned the ring to the jeweler and ex-changed it for a larger ring.State v. Samuel Siligato

State v. Gary Dixon

State v. Francisco Diaz

State v. Michael Howell

Following an 11-week jury trial, SamuelSiligato was found guilty of attempted theftby deception, conspiracy, and witness tam-pering. On September 7, 2006, the court sen-tenced him to 11 years in state prison.

A State Grand Jury previously returned anindictment charging Siligato with theft by de-ception, attempted theft by deception, andconspiracy. According to the indictment,Siligato allegedly conspired to submit falseinsurance claims in connection with a sus-picious arson fire at a commercial buildinghe owned in Hammonton. First Trenton In-surance Company allegedly paid a $15,000insurance claim for the building’s contentsand $165,000 for the building itself. TheState alleged that Siligato also fraudulentlysubmitted a $206,900 claim to FarmersMutual Insurance Company for the con-tents of the building.

During the course of this investigationand prosecution, OIFP investigators arrestedGary Dixon and charged him with perjury.Prior to the date Siligato’s trial was originallyscheduled to begin, Siligato allegedly offeredDixon’s testimony in his defense after Siligatoallegedly threatened Dixon and his family topersuade Dixon to provide perjured testimonyto exculpate him (Siligato). Siligato also of-fered the testimony of Francisco Diaz. OIFPinvestigators arrested Diaz and charged himwith perjury. The State alleged that Siligatocoerced Diaz for perjured testimony. An ar-rest warrant for terroristic threats was alsoissued for Michael Howell. The State allegedthat Howell threatened the son of a cooper-ating witness who was then expected to tes-tify at Siligato’s trial. A State Grand Jury re-turned an additional indictment on August29, 2005, charging Siligato with witnesstampering based on the above conduct.

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State v. Nalin Parmar

On December 21, 2006, an Accusationwas filed charging Nalin Parmar with Insur-ance Fraud. According to the Accusation, onDecember 23, 2004, Parmar, who operatesSayreville Wine & Liquor, allegedly submit-ted an altered invoice to Great American In-surance Company in support of a propertydamage claim. The State alleged that, on De-cember 2, 2004, several shelves on which li-quor was stored, collapsed. The State furtheralleged that although the cost of replacing theshelves was $1,570, Parmar allegedly alteredthe invoice to read $7,570 and submitted thealtered invoice to his insurance company. Heis scheduled to be sentenced in 2007.Phony Certificates of Insurance2

State v. Michael Fernandez

On March 17, 2006, the court admittedMichael Fernandez into the PTI Programconditioned upon him performing 75 hoursof community service. Fernandez pled guiltyto an Accusation charging him with forgery.Fernandez, the owner/operator of Michael’sCarpentry & Construction, allegedly provideda phony York-Jersey Underwriters, Inc., Cer-tificate of Insurance to a person at whosehome Fernandez was contracted to do work.State v. Robert Belisonzi

On January 5, 2006, the court admittedRobert Belisonzi into the PTI Program. AnAccusation was previously filed chargingBelisonzi with forgery. Belisonzi, the ownerof the Mason Jar, a catering business, alleg-edly provided a phony Eastern Insurors,LLC, Certificate of Insurance to a businesswith which he had contracted to provide ca-tering services.State v. Dorothy McCausland

On June 26, 2006, the court admittedDorothy McCausland into the PTI Program.On May 22, 2006, McCausland was chargedby way of an Accusation with forgery. Ac-cording to the Accusation, McCausland, inher capacity as office manager of CompleteMasonry, allegedly submitted a phony NewJersey Manufacturers Insurance CompanyCertificate of Insurance to a waterproofingcompany. The State alleged that CompleteMasonry was a subcontractor doing work fora waterproofing company.State v. Joseph Greble

On March 13, 2006, the court admittedJoseph Greble into the PTI Program condi-tioned upon him performing 50 hours ofcommunity service. Greble pled guilty to

forgery. Greble, of Red Alert Security, LLC,on two occasions, allegedly presented coun-terfeit Certificates of Insurance to two com-panies with which he had contracted to sup-ply security alarm work.State v. Art Gallagher

On January 20, 2006, Art Gallagher failedto appear at his sentencing. The court issueda bench warrant for his arrest. Gallagher pre-viously pled guilty to an Accusation charginghim with forgery. Gallagher, the owner andoperator of Tower Building Contractors, ad-mitted providing a phony Atlantic InsuranceServices Certificate of Insurance to a con-tracting firm for which he was doing subcon-tracting work.State v. Wilson Aguirre

On June 30, 2006, the court admittedWilson Aguirre into the PTI Program. OnApril 25, 2006, a Middlesex County GrandJury returned an indictment charging Aguirrewith forgery. According to the indictment,Aguirre allegedly submitted a phony ZurichInsurance Company Certificate of Insuranceto a business with whom Aguirre had con-tracted to do landscaping work.State v. Heriberto Quiroz

On August 22, 2006, the court admittedHeriberto Quiroz into the PTI Program. OnMay 2, 2006, a Hudson County Grand Juryreturned an indictment charging Quiroz withforgery. According to the indictment,Quiroz, operator of Quiroz Trucking, Inc.,allegedly submitted a phony NorthGuard In-surance Company Certificate of Insurance toa construction company relative to workQuiroz performed at a construction site.State v. Joseph Fleres

Joseph Fleres failed to appear at his ar-raignment on January 23, 2006. The courtissued a bench warrant for his arrest. ABergen County Grand Jury previously re-turned an indictment charging Fleres withforgery. According to the indictment, Fleres,the owner of Fleres Construction, allegedlyprovided a forged Scottsdale Insurance Com-pany Certificate of Insurance to a businessfor which Fleres was contracted to do con-struction work.

State v. Scott Rosanio

On February 17, 2006, the court sen-tenced Scott Rosanio to 18 months proba-tion and ordered him to pay a $1,000 crimi-nal fine. The court previously admittedRosanio into the PTI Program conditionedupon him performing 50 hours of commu-nity service. Rosanio was terminated fromthe program and, on the same day, pled guiltyto an Ocean County Grand Jury indictmentcharging him with forgery. According to theindictment, Rosanio, a home repair contrac-tor doing business as Creative Construction,allegedly forged a Certificate of Liability In-surance. The State alleged that the Certifi-cate of Insurance purported that MercerMutual Insurance Company insuredRosanio’s contracting business for liability,when, in fact, Rosanio had forged the Cer-tificate of Insurance.State v. Dennis Carey

On May 1, 2006, Dennis Carey failed toappear at his arraignment. The court issued abench warrant for his arrest. On February28, 2006, a Hudson County Grand Jury re-turned an indictment charging Carey withforgery by uttering. According to the indict-ment, Carey allegedly faxed a phony Pre-server Insurance Company and New JerseyRe-Insurance Company Certificate of Liabil-ity Insurance to a home improvement com-pany, which had allegedly hired Carey to dosubcontracting work.State v. William Jenkins

William Jenkins failed to appear at his ar-raignment on April 17, 2006. The court is-sued a bench warrant for his arrest. OnMarch 9, 2006, a Burlington County GrandJury returned an indictment charging Jenkinswith forgery. According to the indictment,Jenkins allegedly filed a phony Mercer Insur-ance Company Certificate of Liability Insur-ance with the Township of Pemberton onbehalf of a general contractor.State v. Daliton Marcal

On August 22, 2006, Daliton Marcalfailed to appear at a court hearing. The judgeissued a bench warrant for his arrest. OnMay 2, 2006, a Hudson County Grand Jury

2. Frequently, contractors and other businesses are required to presentproof of insurance when seeking construction work. Too often, the Cer-tificates of Insurance offered as proof of insurance are phony, and thecontractors or other businesses do not have the proper insurance to pro-vide protection in the event of an insurable loss.

OIFP Criminal Case Notes

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returned an indictment charging Marcal withforgery. According to the indictment, Marcal,who was doing business as First March Con-struction, allegedly submitted a phony Cer-tificate of Liability Insurance in connectionwith construction work being done onBergenline Avenue in Union City. The Statealleged that the Certificate of Insurance waspurportedly issued by Fleet Insurance Ser-vices of Newark, and also purports thatTravelers Indemnity insured Marcal and hisconstruction company for commercial gen-eral liability and workers’ compensation in-surance from November 5, 2004 to Novem-ber 5, 2005.State v. Mario Ramos

On June 21, 2006, the court admittedMario Ramos into the PTI Program and or-dered him to pay $4,666 in restitution. OnMay 3, 2006, a Mercer County Grand Juryreturned an indictment charging Ramos withtheft by failure to make required dispositionof property received and forgery. Accordingto the indictment, between July 2, 2005 andJuly 26, 2005, Ramos, who operated RamosHeating Co., allegedly provided a phony in-surance binder to an individual in connectionwith restoration work being done on a build-ing located at 114 Centre Street in Trenton.The insurance binder was allegedly providedto demonstrate that Ramos had the requisiteinsurance before beginning work on thebuilding. The indictment also alleged thatRamos accepted $4,666 from the individualas a down payment for the work to be per-formed on the building, but did not performany work and never returned the money.State v. William Van’t Veer

On April 6, 2006, the court admitted Wil-liam Van’t Veer into the PTI Program condi-tioned upon him performing 50 hours ofcommunity service. A Somerset CountyGrand Jury previously returned an indictmentcharging Van’t Veer with forgery. Accordingto the indictment, Van’t Veer, a constructioncontractor, allegedly submitted a phony OhioCasualty Insurance Company Certificate ofInsurance to obtain work at a bank.State v. Steven Day

On August 4, 2006, the court admittedSteven Day into the PTI Program. On June 22,2006, Day pled guilty to an Accusation charg-ing him with forgery. Day, the operator of JPSConstruction Company, allegedly submittedtwo phony Ohio Casualty Group Certificatesof Insurance to a construction company whichhired Day to do subcontracting work.

State v. Fernando Vasquez

On June 27, 2006, a Hudson County GrandJury returned an indictment chargingFernando Vasquez with forgery. According tothe indictment, on September 16, 2004,Vasquez, the owner/operator of First RateConstruction, allegedly provided a phonyOhio Casualty Group Certificate of Insuranceto a contracting firm that had hired First RateConstruction to do subcontracting work.State v. Lance Lally

On September 18, 2006, Lance Lally pledguilty to forgery. He is scheduled to be sen-tenced early in 2007. On July 31, 2006, aMonmouth County Grand Jury returned anindictment charging Lally with forgery. Ac-cording to the indictment, on or about No-vember 29, 2005, Lally, a contractor operat-ing a company known as Lally Painting andConstruction, issued a fictitious Certificate ofLiability Insurance indicating that he hadworkers’ compensation insurance when, infact, he did not, in order to obtain work froma general contractor. The State further allegedthat the Certificate of Liability Insurancefalsely reflected that Lally’s company was in-sured by Peerless Insurance Company and pos-sessed the requisite liability insurance.State v. Steven Roesch

On September 26, 2006, a Sussex CountyGrand Jury returned an indictment chargingSteven Roesch with forgery. According to theindictment, on October 27, 2005, Roesch, theowner and operator of Steven Roesch Carpen-try, presented a phony Quincy Mutual Fire In-surance Company Certificate of Liability Insur-ance to a person with whom he had contractedto build a deck. This case is pending trial.State v. John Mullen

On September 27, 2006, the court admit-ted John Mullen into the PTI Program con-ditioned upon him performing 25 hours ofcommunity service. Mullen was charged withforgery by way of an Accusation. Accordingto the Accusation, Mullen, who operated J.Mullen Roofing, LLC, allegedly providedfalse Jeanne Frey Insurance Agency Certifi-cates of Liability Insurance to three differentgeneral contractors with which J. MullenRoofing had contracted to do work.State v. Prestige HomesDevelopment Corporation

On December 22, 2006, the court sen-tenced Prestige Homes Development Corpo-ration to pay $5,000 in criminal fines. OnOctober 11, 2006, the corporation pled

guilty to an Accusation charging falserecords. According to the Accusation, Pres-tige Homes Development Corp., which is inthe business of residential home construc-tion, submitted 17 fraudulent Certificates ofLiability Insurance to the Hartford InsuranceCompany during the course of an audit thatHartford was conducting at Prestige Homes.State v. Patrick Loftus

On November 16, 2006, Patrick Loftus pledguilty to an Accusation charging him with forg-ery. Loftus, the owner/operator of ComputerLogix, admitted that he presented an alteredQuincy Mutual Fire Insurance Certificate ofInsurance to a department store in connectionwith a software consulting job contract. He isscheduled to be sentenced in 2007.State v. William Luciano

On October 27, 2006, William Luciano pledguilty to an Accusation charging him with forg-ery. According to the Accusation, Luciano, theowner and operator of T&L Custom Tile andMarble, allegedly presented a forged HartfordInsurance Company Certificate of Liability In-surance to a construction company for whichhe had contracted to do work. He is scheduledto be sentenced in early 2007.State v. Tadeusz Dobrzanski

On December 6, 2006, an Ocean CountyGrand Jury returned an indictment chargingTadeusz Dobrzanski with forgery. Accordingto the indictment, on March 1, 2006,Dobrzanski, the owner and operator of TJDConstruction, allegedly presented a phonySelective Insurance Company Certificate ofLiability Insurance to a condominium com-plex which had contracted with TJD Con-struction to do repair work.State v. Bruce Buccolo, et al.

On June 8, 2006, a Somerset CountyGrand Jury returned an indictment chargingBruce Buccolo, his wife, Lori Lapira, and theheavy equipment leasing company he owned,operated and controlled known as UnitedLeasing, Inc., with theft of services andforgery. According to the indictment, be-tween June 12, 2001 and November 20,2001, Buccolo, Lapira, and United Leasingallegedly leased heavy construction equip-ment from an equipment rental company, in-curring unpaid charges due under the equip-ment lease of approximately $25,000. TheState further alleged that Buccolo presenteda phony Certificate of Liability Insurance inorder to induce the company to rent theheavy equipment to him.

State v. Mark Little

On December 11, 2006, the court admit-ted Mark Little into the PTI Program. OnNovember 1, 2006, Little was charged byway of an Accusation with forgery. Accordingto the Accusation, Little allegedly submittedan altered State Farm flood insurance applica-tion and a forged letter on State Farm letter-head to a bank when applying for a homeloan, in support of his claim that he had suffi-cient flood insurance to secure the loan.

INSURANCEPROFESSIONAL FRAUDInsurance Carrier Employee FraudState v. Sharonda Ross, et al.

On September 25, 2006, MichellePatterson pled guilty to conspiracy. On No-vember 3, 2006, the court sentenced her tothree years probation and ordered her to pay$489 in restitution. A State Grand Jury hadreturned an indictment charging SharondaRoss, her husband Ivery Ross, and Ross’s sis-ter-in-law, Michelle Patterson, with con-spiracy and theft by deception. Ivery Ross

was also charged with theft of identity. Ac-cording to the indictment, between October8, 2002 and April 16, 2003, Sharonda Ross,who was employed as a Treasury OperationsAssociate for Prudential Insurance Company,allegedly conspired with Ivery Ross andMichelle Patterson to steal nearly $50,000from Prudential. The State alleged thatSharonda Ross diverted insurance companychecks to Ivery Ross and Michelle Pattersonby using the identification codes of otherPrudential employees to issue the checks.The State further alleged that a total of ap-proximately 18 checks were wrongfully di-verted in this manner and the conspiracy net-ted the defendants approximately $49,889.

Sharonda Ross previously pled guilty totheft by deception, and the court admittedher into the PTI Program conditioned uponher paying $22,259 in restitution to Pruden-tial Insurance Company. Ivery Ross also pledguilty to theft by deception and theft ofidentity. The court sentenced him to threeyears probation and ordered him to pay$22,258 in restitution to Prudential Insur-ance Company.

State v. Melita Bilali, et al.

On November 1, 2006, a State Grand Juryreturned an indictment charging MelitaBilali, Greicy Rodriguez, Wilson Ruiz, andGuillermo Rosario with theft by deceptionand conspiracy. Bilali was also charged withuttering a forged document. According tothe indictment, between March 18, 2002and May 1, 2002, Bilali, Ruiz, Rodriguez,and Rosario allegedly stole claims moneyfrom Prudential Insurance Company whenBilali issued phony claims checks from thePrudential computer system. The State al-leges that Bilali, who was employed at Pru-dential as a customer service representativein the Disability Management Service Divi-sion fraudulently diverted five claims checkstotaling $13,634 to Ruiz, Rodriguez, andRosario. This case is pending trial.State v. Lisa Fitzpatrick-Gordon, et al.

On October 30, 2006, a MonmouthCounty Grand Jury returned an indictmentcharging Lisa Fitzpatrick-Gordon, BradyBell, and Robert Scatigna with conspiracy tocommit theft by deception and theft by de-

OIFP continued to see a growing trend inthe area of insurance agent/producer fraudduring 2006. OIFP received numerous refer-rals alleging that certain insurance producershad stolen insurance premium money fromunsuspecting insureds, leaving many insuredswithout insurance. The investigations haveshown that because of the accessibility tolarge amounts of premium money, some in-surance producers/agents cannot avoid thetemptation of converting this premiummoney for their own personal use. The Statewill continue to prosecute these cases, send-ing a strong message to these agents/produc-ers that prosecution and jail time will be theresult of such misconduct.

During 2006, numerous producers wereconvicted by OIFP for stealing premiummoney. Many of these convicted defendantsreceived jail time. Michael Chamberlain, a li-censed insurance broker formerly of BaskingRidge, was sentenced in February 2006 to fiveyears state prison. He admitted to swindling a78-year-old man of his life savings totaling

over $300,000. Rodger Strandskov, a licensedinsurance broker from the Eastern InsuranceAgency in Kendall Park, was sentenced inFebruary 2006 to three years state prison forstealing over half a million dollars fromAMGRO Premium Finance Company. StacyBates, a Millville licensed insurance agent, wassentenced in March 2006 to three years stateprison for stealing over $105,000 from ap-proximately 124 insurance customers seekingauto and homeowners insurance policies.

Another licensed agent, Louis Polite ofBurlington Township, received five years pro-bation for stealing $57,657 from approxi-mately 50 victims and an additional $3,000from New Jersey PAIP. Mercedes Lastra, a li-censed bail bondsman, was sentenced in No-vember 2006 to five years probation for steal-ing $52,000 from individuals who gave hermoney to procure bail bonds. As part of theirsentences, all of the aforementioned licensedproducers have forfeited their licenses andhave been ordered to pay full restitution.

In yet another producer scam, in Novem-ber 2006, Guy Cardinale, a licensed insur-ance producer, pled guilty to second and

third degree theft by deception. Cardinaleadmitted to bilking Canada Life AssuranceCompany out of more than $364,000 infraudulently obtained insurance sales com-missions. Cardinale admitted that he forgedthe names of several of his clients on certaindocuments in order to have policies issuedand premiums electronically deducted fromtheir bank accounts. Sentencing is scheduledfor March 2007. Cardinale faces up to fiveyears in state prison and the loss of his insur-ance producer’s license.

OIFP is committed to aggressively pursuinglicensed agents who break the law and violatetheir duty to their clients. These criminals vic-timize individuals and businesses and under-mine the sterling reputations of countless lawabiding agents and producers.

Putting the Brakes on Unscrupulous Insurance Licenseesby Lewis Korngut

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Lewis Korngut is a Supervising Deputy AttorneyGeneral in charge of OIFP’s Property and CasualtySection. He previously served as a MercerCounty Assistant Prosecutor where he tried capitalcases, including State v. Timmendequas.

OIFP Criminal Case Notes

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ception. According to the indictment, be-tween June 25 and July 29, 2002, Gordonallegedly conspired with Bell and Scatigna tosteal approximately $21,393 from StateFarm Insurance Company. The State allegesthat Gordon, who was an employee of StateFarm, fraudulently issued five claim checksto Bell, Scatigna, and a person who was notidentified in the indictment. This case ispending trial.Insurance Premium FraudState v. Ana Carmona, et al.

On June 20, 2006, Ana Carmona pledguilty to Insurance Fraud. On September 8,2006, the court sentenced her to five yearsprobation and ordered her to pay $617 inrestitution to Clarendon Insurance Companyand a $3,000 civil insurance fraud fine. OnJanuary 4, 2006, a State Grand Jury returnedan indictment charging Carmona with Insur-ance Fraud. According to the indictment, onDecember 4, 2003, Carmona, a licensed realestate agent, allegedly committed applicationfraud by falsifying an automobile insuranceapplication and submitting it to ClarendonNational Insurance Company in order to saveautomobile insurance premiums.

The State alleged Carmona falsely statedin her automobile insurance application thatthere were no other licensed drivers resid-ing in her household and made other mis-leading statements and/or omissions in herautomobile policy application to ClarendonInsurance. The State also alleged that byconcealing the fact that other licensed driv-ers resided in her house, Carmona was ableto deceive Clarendon Insurance Companyinto charging her substantially less for auto-mobile insurance.

Unrelated to the investigation of Carmona,her insurance agent, Herberto Zayas, wascharged by the Passaic County Prosecutor’sOffice for the sale of fraudulent automobileinsurance identification cards. On May 17,2006, a Passaic County Grand Jury returnedan indictment charging Zayas with theft byfailure to make required disposition. Accord-ing to that indictment, Zayas accepted insur-ance premium money from a corporationwhich operated a car wash in Plainfield, inorder that general commercial liability andcommercial property damage/loss insurancecould be purchased, but failed to obtain theinsurance and retained the insurance pre-mium money for his own use. The indict-ment alleged that approximately $6,795 inpremium money was stolen by Zayas.

Insurance Sales FraudState v. Lisa Brown

On April 7, 2006, the court sentencedLisa Brown to three years probation and or-dered her to pay $3,000 in restitution. OnFebruary 6, 2006, Brown pled guilty to aUnion County Grand Jury indictment charg-ing her with theft by deception. Accordingto the indictment, between November 12,2001 and February 20, 2002, Brown, whowas employed as a claims service representa-tive by Fleet Insurance Services in Cranford,stole insurance premium money from threeinsurance customers with the promise thatshe could obtain auto insurance for them at amuch lower rate. The State alleged thatBrown accepted approximately $3,600 in in-surance premium money and issued fraudu-lent Chubb Insurance Company and FirstTrenton Indemnity Company documents, in-cluding policy binders. The State also allegedthat Brown stole the premium money and leftthe insurance customers without valid auto-mobile insurance. Brown was neither licensednor authorized to sell insurance or accept pre-miums as a licensed insurance agent.State v. Joseph Caruso

On May 8, 2006, the court admitted Jo-seph Caruso into the PTI Program condi-tioned upon him paying $5,000 in restitu-tion. On April 3, 2006, Caruso pled guilty toan Accusation charging him with theft by de-ception and forgery. Caruso allegedly sold in-surance policies and insurance-related invest-ment products and services between August9, 2001 and July 16, 2002, even though hedid not have a valid license to sell insurance.The State alleged that Caruso collected ap-proximately $97,000 in insurance sales com-missions during the relevant time periodwhile employed as an insurance agent with afinancial services firm in Point Pleasant. InNew Jersey, insurance agents or insuranceproducers are required to have a State-issuedinsurance producers license.Department of Banking and Insurance(DOBI) LicenseesState v. Rodger Strandskov

On February 17, 2006, the court sen-tenced Rodger Strandskov to three years instate prison and ordered him to pay$305,658 in restitution to Lexington Insur-ance Company and $305,190 in restitution tothe Insurance Company of the State ofPennsylvania. Strandskov pled guilty to anAccusation charging him with theft by fail-

ure to make required disposition of propertyreceived. Strandskov, who was the presidentof Eastern Insurance Agency which operatedin Kendall Park, admitted that he committedtheft in two different ways.

Strandskov admitted that he did not remitpremium finance money to insurance compa-nies to pay for insurance policies soldthrough his agency. The premium financemoney was provided by AMGRO PremiumFinancing. Insurance premium financing oc-curs when an insurance customer, in thiscase, commercial trucking companies, bor-rows money from a lender to purchase therequired commercial trucking insurance.Strandskov admitted that, in some cases, hestole insurance premium finance money andused it for his own purposes. Additionally,Strandskov admitted that he did not returninsurance premium finance money for certaininsurance policies that terminated earlierthan the anticipated end date of the insur-ance coverage for approximately 14 insur-ance customers. Strandskov admitted that hestole approximately $474,289 from AMGROPremium Financing.State v. Michael Chamberlain

On February 3, 2006, the court sentencedMichael Chamberlain to five years in stateprison and ordered him to pay $303,757 inrestitution, following his guilty plea to theftby unlawful taking. A State Grand Jury pre-viously returned an indictment chargingChamberlain with theft by unlawful taking,forgery, and misapplication of entrustedproperty. According to the indictment,Chamberlain, then a licensed securities dealerselling investments for American Skandia,which was later purchased by Prudential In-surance Company, allegedly stole $300,000from a 78-year-old victim by forging docu-ments related to three annuity accountsmaintained by the American Skandia/Pru-dential Company. The Prudential InsuranceCompany reported the matter to OIFP forfurther investigation.State v. Louis Polite

On March 31, 2006, the court sentencedLouis Polite to five years probation, orderedhim to pay $3,277 in restitution to PAIP and$57,461 to 50 victims, as well as orderinghim to forfeit his producer’s license. On Au-gust 25, 2006, the court suspended certainconditions of the sentence imposed on Po-lite. Polite agreed to increase the amount ofpayments he had been making in order torestitute the insurance companies and others.

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On January 27, 2006, Polite pled guilty toan Accusation charging him with theft byfailure to make required disposition of prop-erty received. Polite, a licensed insuranceagent, admitted that, between January 1,2003 and November 19, 2004, he acceptedinsurance premiums from 24 insurance cus-tomers, most of whom were purchasing au-tomobile insurance, and did not remit theinsurance premiums to the insurance compa-nies to pay for the insurance coverage. Headmitted that he stole the money and used itfor his own purposes.State v. Stacey Bates

On March 17, 2006, the court sentencedStacey Bates to three years in state prison,ordered her to pay $105,553 in restitution,and permanently revoked her insuranceagent’s license. On January 30, 2006, Batespled guilty to an Accusation charging herwith theft by failure to make required dispo-sition. Bates, a licensed insurance agent andthe owner and operator of Stacey Bates Gen-eral Insurance Agency located at 319 NorthHigh Street in Millville, admitted that she ac-cepted insurance premiums from insurancecustomers, primarily for automobile insur-ance, and did not remit the insurance pre-mium money to the appropriate insurance car-rier to obtain valid insurance for the insurancecustomers. Instead, Bates admitted taking theinsurance premium money and spending it forher own purposes. OIFP’s investigation iden-tified approximately 104 insurance customerswhose premium money was stolen by Batestotaling approximately $99,058.State v. Julio Fonseca

On November 15, 2006, a State GrandJury returned an indictment charging JulioFonseca, a licensed insurance agent who op-erated an insurance agency located at 377Henry Street in Orange, with failure to makerequired disposition and simulating a motorvehicle insurance identification card. Ac-cording to the indictment, between March 7and December 9, 2003, Fonseca allegedly ac-cepted insurance premium money as paymentfor insurance coverage from customers of hisinsurance agency but never turned the insur-ance premium money over to the insurancecompanies and instead stole the money touse it for his own purposes. The State alsoalleges that Fonseca issued simulated NewJersey PAIP auto insurance cards on June 20and December 9, 2003, to an insurance cus-tomer. The total amount of theft is allegedto be several thousand dollars.

INSURANCE-RELATED THEFT/ATTEMPTED THEFTState v. E. Nkem Odinkemere

On January 13, 2006, following a five-daytrial in Essex County before Judge John C.Kennedy, the jury was unable to reach a ver-dict. On March 27, 2006, the indictmentagainst E. Nkem Odinkemere was dismissed.A State Grand Jury previously returned anindictment charging Odinkemere with mis-application of entrusted property. The Statealleged that on September 1, 2000, andthereafter, Odinkemere, a licensed New Jer-sey attorney, misapplied money receivedfrom a client in connection with a real estatetransaction, and allegedly used the money forhis own benefit.State v. Monserrat Rodriguez

On March 1, 2006, the court sentencedMonserrat Rodriguez to one year probation.Rodriguez pled guilty to an Accusationcharging her with issuing bad checks.Rodriguez admitted that, between April 26,2005 and May 14, 2005, she wrote approxi-mately 39 checks totaling $7,803. The checkswere drawn on a High Point Insurance Com-pany bank account. Rodriguez knew thebank would not honor the checks.State v. Angel C. Fontaina

On April 13, 2006, the court sentencedAngel C. Fontaina to four years in stateprison and ordered him to pay $4,000 in res-titution. On March 16, 2006, Fontaina pledguilty to an Accusation charging him withtheft by deception. Fontaina, who was incar-cerated in the Hudson County jail based onhis guilty plea to first degree armed robbery,admitted that he stole $4,600 in connectionwith an annuity investment issued by theGeneral Electric Capital Assurance Program.Fontaina admitted that he issued a check tothe General Electric Capital Assurance Pro-gram to fund an annuity investment. Thecheck was drawn in the amount of $3,000.Later, Fontaina made two withdrawals of$3,000 from the General Electric Capital As-surance annuity and used the cash for his ownpurposes. General Electric Capital Assurancelater learned that Fontaina’s initial $3,000check was worthless when it bounced.State v. Mercedes Lastra

On November 14, 2006, the court sen-tenced Mercedes Lastra to five years proba-tion and ordered her to pay $52,930 restitu-tion to a bail bond company. The court alsorevoked her bond agent license for a period

of five years. On September 21, 2006,Lastra pled guilty to an Accusation chargingher with theft by failure to make requireddisposition of property received. Lastra, abond agent licensed in the State of New Jer-sey and an employee of a bail bond companylocated in Perth Amboy, admitted that, be-tween September 24, 2004 and January 26,2005, she accepted bail money which repre-sented premium surety bonds from various per-sons. She admitted that she took the bail bondmoney and issued phony bonds by taking blankbail bonds and completing them as if they hadbeen paid for and properly issued. In total,Lastra admitted that she stole approximately$52,930 in connection with phony bail bondsissued for 15 criminal defendants.

MEDICAID FRAUDProvider FraudState v. William J. Adamshick

On February 10, 2006, the court sen-tenced William J. Adamshick to three yearsprobation and ordered him to pay $25,000 inrestitution and $25,000 in civil penalties. Italso revoked his pharmacist’s license andbarred him from participating in the Medic-aid program for five years. Adamshick pledguilty to Health Care Claims Fraud.

A State Grand Jury previously returned anindictment charging Adamshick with HealthCare Claims Fraud and Medicaid fraud. Ac-cording to the indictment, between May 15,2000 and January 30, 2002, Adamshick, alicensed pharmacist, allegedly submittedfraudulent claims to the Medicaid programfor a narcotic prescription drug known asStadol. Adamshick allegedly billed the Med-icaid program in excess of $20,000 for ap-proximately 238 phony Stadol prescriptionsthat were never dispensed to patients.State v. Delphine Moore, et al.

Delphine Moore, owner and operator ofM and M Rest Home located inPerrineville, Howard Beale, owner and op-erator of the Chelsea Rest Home located inLong Branch, and Kathryn McGlynn, ownerand operator of the Atlantic House, all lo-cated in Monmouth County, were previ-ously admitted into the Pre-Trial Interven-tion (PTI) Program. Moore’s admission intoPTI was conditioned upon her paying$19,200 in restitution and paying a $1,500civil penalty. Beale’s admission into PTI wasconditioned upon him paying $4,800 in res-titution and paying a $1,000 civil penalty.McGlynn’s admission into PTI was condi-

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tioned upon her paying $15,000 in restitu-tion and paying a $1,000 civil fine.

Moore, Beale, and McGlynn allegedly re-ceived kickbacks from the Belmar HomeTown Pharmacy as an inducement to fill themedical prescriptions of the residents livingin their assisted living facilities at that phar-macy. The prescriptions were allegedly billedto the Medicaid program. The kickbacks al-legedly took the form of cash and free ofcharge over-the-counter medications, whichwere also allegedly used by the residents ofthe nursing homes.

On February 17, 2006, the court sen-tenced Jacob Cohen to pay standard finesand penalties, which he did at the time ofsentencing. Cohen pled guilty to Medicaidfraud in connection with this investigation.In addition, Michael Stavitski, former ownerand operator of the Belmar Home TownPharmacy, was previously indicted by a StateGrand Jury. He pled guilty to Health CareClaims Fraud and was sentenced to sevenyears in state prison and ordered to pay ap-proximately $1.1 million in restitution andpenalties. Also, as part of the investigation,Stephen Poggioli previously pled guilty toMedicaid fraud and he was sentenced tothree years probation.State v. Azam Khan, et al.

On January 27, 2006, the court sentencedAzam Khan to three years in state prison.Khan pled guilty to an Accusation charginghim with Health Care Claims Fraud. A StateGrand Jury previously returned an indict-ment charging Shahid Khawaja, MiltonBarasch, and Axat Jani with Health CareClaims Fraud, theft by deception, and Med-icaid Fraud. All four defendants allegedlyparticipated in an illegal scheme to bill theMedicaid program approximately $293,815for medications either never dispensed ordispensed to persons using another person’sMedicaid recipient number. Some bills wereallegedly submitted to the Medicaid programfor medications prescribed for Medicaid re-cipients who had died years before.

Jani previously pled guilty to Health CareClaims Fraud. The court sentenced Jani tofour years in state prison and ordered him topay a criminal fine of $10,000. Jani’s Medic-aid program privileges were suspended for aperiod of five years and his medical licensewas suspended for one year. Khawaja, theowner of S Brothers Pharmacy, previouslypled guilty to money laundering. The courtsentenced Khawaja to five years in state

prison and ordered him to pay $235,984 inrestitution. Barasch, a licensed pharmacist,also pled guilty to Health Care Claims Fraud.The court sentenced Barasch to four years instate prison, suspended his Medicaid privi-leges for five years, and suspended hispharmacist’s license for one year.State v. Edward Acquaye

On June 30, 2006, Edward Acquaye pledguilty to Medicaid fraud. On September 1,2006, the court sentenced him to three yearsprobation and ordered him to pay $1,500 inrestitution and a $1,000 civil fine. On Janu-ary 24, 2006, a Middlesex County GrandJury returned an indictment chargingAcquaye with Medicaid fraud in connectionwith the Michael Stavitski investigation. Ac-cording to the indictment, between Novem-ber 20, 2001 and February 20, 2002,Acquaye, who did business as EDFAMAX,Inc., was the president and operator of theLincoln Rest Home, which was licensed bythe New Jersey Department of Health andSenior Services. It is alleged that Acquayeaccepted kickbacks in the form of cash fromMichael Stavitski, who owned, operated,and controlled the Belmar Home Town Phar-macy. In total, $4,800 was paid by Stavitskito Acquaye so that he would direct residentsof the Lincoln Rest Home to the BelmarHome Town Pharmacy to have prescriptionsfilled. The Medicaid program prohibits pay-ing cash or offering anything of value to aMedicaid provider in exchange for directingbusiness to providers, such as pharmacies, sothat the Medicaid program can be billed forprescription or other claims. Stavitski waspreviously prosecuted by the OIFP MedicaidFraud Control Unit and was convicted andsentenced to serve seven years in stateprison. He was also ordered to pay $1.1 mil-lion in restitution and penalties and relin-quished his Medicaid provider license for aperiod of seven years.State v. Edward Sigle

On July 25, 2006, Edward Sigle pledguilty to Medicaid fraud. On September 1,2006, the court sentenced him to three yearsprobation and ordered him to pay $2,000 inrestitution and a $1,000 civil fine. On Janu-ary 24, 2006, a Middlesex County GrandJury returned an indictment charging Siglewith Medicaid fraud in connection with theMichael Stavitski investigation. According tothe indictment, between March 1, 2001 andFebruary 20, 2002, Sigle, who operated theMeadowview Rest Home/Country View

Care Center located in Monroe, violated theMedicaid kickback statute by acceptingmoney in return for directing nursing homeresidents to use a specific pharmacy for ob-taining drugs prescribed by their physicians.Sigle was paid to direct nursing home resi-dents to utilize the Belmar Home TownPharmacy which was owned and operated byStavitski.State v. Shirley Welch

On October 16, 2006, Shirley Welch pledguilty to theft by deception. She is scheduledto be sentenced in 2007. On February 14,2006, a Monmouth County Grand Jury re-turned an indictment charging Welch withMedicaid fraud in connection with theMichael Stavitski investigation. According tothe indictment, between January 1, 2000 andFebruary 20, 2002, Welch, who was licensedby the New Jersey Department of Healthand Senior Services, and who was the formeradministrator/vice-president of the PinelandRest Home, allegedly accepted kickbacks inthe form of cash from Michael Stavitski,who owned, operated, and controlled theBelmar Home Town Pharmacy. The cashkickbacks were allegedly paid to Welch sothat she would direct residents of thePineland Rest Home to the Belmar HomeTown Pharmacy to have prescriptions filled.Laws that govern the Medicaid program pro-hibit paying cash or offering anything ofvalue to a Medicaid provider in exchange fordirecting business to providers, such as phar-macies, so that the Medicaid program can bebilled for prescription or other claims.Stavitski was previously prosecuted by theOIFP Medicaid Fraud Control Unit and wasconvicted and sentenced to serve seven yearsin state prison. He was also ordered to pay$1.1 million in restitution and penalties andrelinquished his Medicaid provider licensefor a period of seven years.State v. Dwayne Smith, et al.

On February 3, 2006, OIFP MedicaidFraud Control Unit investigators arrestedDwayne Smith on an outstanding warrant.He was transported to the Essex CountyCorrectional Facility. A State Grand Jurypreviously returned an indictment chargingDwayne Smith and his corporation, Smith &Williams Transportation, Inc., with HealthCare Claims Fraud and Medicaid fraud. Ac-cording to the indictment, between March21, 2003 and May 20, 2004, Smith, throughSmith & Williams Transportation, Inc., alleg-edly fraudulently billed the Medicaid pro-

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gram for transportation services in connectionwith medical treatments of Medicaid patients.The Medicaid program provides transporta-tion to and from doctors’ offices, hospitals, andother medical providers. In total, the State al-leged that Smith falsely billed the Medicaidprogram approximately $12,600. DwayneSmith and Smith & Williams Transportationare scheduled to go on trial in early 2007.State v. Jean Edward LaGuerre

On June 29, 2006, Jean Edward LaGuerrepled guilty to an Accusation charging himwith forgery. He will be sentenced in 2007.On March 10, 2006, OIFP Medicaid FraudControl Unit investigators arrested LaGuerreand charged him with forgery. LaGuerre wasallegedly posing as a licensed pharmacist andwas employed by a pharmacy that specializedin providing medications to nursing homeresidents. The State alleged that LaGuerrewas not a licensed pharmacist in New Jerseyand, therefore, could not legally dispenseprescription medicine.State v. Ojah Pharmacy, et al.

On March 21, 2006, following a five-week jury trial, Ojah Pharmacy, VeronaBoodram, and Alpha Bangoura were con-victed of Health Care Claims Fraud andMedicaid fraud. Upon conviction, bail forboth individual defendants was revoked andthey were remanded to the Essex CountyJail. On June 6, 2006, the court sentencedBangoura to six-and-a-half years in stateprison. Boodram was sentenced to five yearsin state prison and ordered to pay $21,500 inrestitution. On June 23, 2006, the court or-dered Ojah Pharmacy to pay $21,500 in res-titution and $69,000 in fines and penalties. Italso ordered the corporation dissolved andrevoked its permit to operate as a pharmacy.

A State Grand Jury previously returnedan indictment against Ojah Pharmacy, itsmanager Verona Boodram, and the pharmacytechnician, Alpha Bangoura, charging themwith Health Care Claims Fraud and Medicaidfraud. According to the indictment, betweenJune 1, 2002 and October 28, 2004, the de-fendants billed the Medicaid program forprescriptions that were neither filled nor dis-pensed to Medicaid patients. The State fur-ther alleged that certain Medicaid patientssold their legitimate prescriptions to thepharmacy so that the pharmacy could sup-port the fraudulent Medicaid bills. The Statealso alleged that the Medicaid program wasbilled approximately $57,000 for prescrip-tions that were not filled.

State v. Terry Gatto

On May 12, 2006, Terry Gatto pled guiltyto an Accusation charging her with theft bydeception. Gatto admitted that, betweenNovember 4, 2002 and November 19, 2004,she used her prescription drug plan, AdvancePCS, to fill phony prescriptions forOxyContin and Hydrocodone, both addic-tive narcotics. She admitted that the pre-scriptions were false because either the doc-tors did not prescribe those medications orthe patients did not actually exist. Some ofthe purported patients were Medicaid recipi-ents. Gatto admitted that a pharmacist filledthe phony prescriptions in exchange for ashare of the proceeds. The drugs were soldfor $350, which Gatto admitted splittingwith the pharmacist by paying her $175 foreach bottle of medication illegally sold.Gatto admitted that she paid the pharmacistbetween $1,400 and $1,500 for eight bottlesof medications which were illegally sold. Sheis scheduled to be sentenced in 2007. Thisinvestigation is continuing and more chargesare anticipated.State v. Mark Szarszewski

On September 22, 2006, the court admit-ted Mark Szarszewski into the PTI Program,conditioned upon him paying $1,644 in resti-tution and performing 60 hours of commu-nity service. He was previously suspended bythe Board of Pharmacy. On the same date,Szarszewski was charged by way of an Accu-sation with Medicaid fraud. Szarszewski,formerly a licensed pharmacist, allegedlywrongfully obtained Ambien, a prescriptionmedicine, by falsely utilizing Medicaid ben-eficiary information.State v. Cory Davis

On May 25, 2006, the court sentencedCory Davis to three years probation, condi-tioned upon him serving 30 days in countyjail. The court suspended the jail sentence.On the same date, Davis pled guilty to anAccusation charging him with Medicaidfraud. Davis admitted that in the course ofapplying to become a Medicaid provider, heconcealed his prior criminal record. Specifi-cally, Davis stated that when submitting theMedicaid provider application to the Divi-sion of Medical Assistance and Health Ser-vices so that he could qualify to operate as aMedicaid provider, he responded in the nega-tive to the question inquiring whether or notDavis had ever been indicted, charged, con-victed of, or pled guilty or no contest to anyfederal or state crime or disorderly personsoffense in New Jersey or anywhere else,

when, in fact, he had a prior criminal con-viction for distribution of drugs and hadserved prison time.State v. Mary Villone

On July 28, 2006, the court sentencedMary Villone to three years probation, condi-tioned upon her serving 90 days in the SLAPprogram. She was also ordered to pay a$1,000 criminal fine. On May 19, 2006,Villone pled guilty to Medicaid fraud. AState Grand Jury previously returned an in-dictment charging Villone with Health CareClaims Fraud and Medicaid fraud. Accordingto the indictment, Villone, the administratorof PE Medical Transport, Inc., allegedly sub-mitted false transportation claims to theMedicaid program between January 2002and February 2004.

PE Medical Transport provided mobilityassistance vehicles and transportation assis-tance to Medicaid patients who requiredtransportation to and from health care pro-viders. Villone allegedly falsified prior autho-rization requests, certificates of medical ne-cessity, and transportation trip certifica-tions which Villone submitted to Medicaidin support of claims for transportation ser-vices not rendered and for patients who didnot require transportation. In total, Villonesubmitted approximately 2,080 false claimstotaling $51,500 in billings to the Medicaidprogram.

During the investigation, PE MedicalTransport settled with the State by paying$204,000 in restitution and $204,000 in civilpenalties. An additional $42,000 was forfeitedto the State. The Medicaid Fraud Section“froze” PE Medical Transport’s bank accountswhich totaled approximately $400,000.State v. Frances M. Colon-Torres

On November 13, 2006, Frances M. Co-lon-Torres pled guilty to a six-count indict-ment. On December 18, 2006, the court sen-tenced her to two years probation and or-dered her to pay $18,000 in fines and restitu-tion. She was also barred from working inthe health care field for two years. On Sep-tember 8, 2006, an Essex County Grand Juryreturned an indictment charging Colon-Torres with false government documents,theft by deception, and uttering a forgeddocument. According to the indictment, be-tween August 2004 and May 2005, Colon-Torres was allegedly employed by a nursinghome located in Orange, New Jersey, underfalse pretenses. The State alleged that Colon-Torres was first employed as a Licensed Prac-

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tical Nurse (LPN), and then as a RegisteredNurse (RN). The State further alleged that thelicensing certificates she provided to the nurs-ing home, demonstrating that she was an LPNand then an RN, were both phony. Finally, theState alleged that Colon-Torres stole approxi-mately $37,518 in salary by presenting phonynursing licenses to the nursing home in order togain employment when she was not qualified.State v. Frederick Feit

On September 26, 2006, a State GrandJury returned an indictment chargingFrederick Feit, a licensed medical doctor,with Health Care Claims Fraud and theft bydeception. According to the indictment, be-tween January 1,1996 and December 31,2004, Feit operated a medical practiceknown as Modern Pain Therapy located at42 Center Street in Freehold. The State al-leged that Feit submitted false claims to anumber of health insurers and government-sponsored health care insurance plans in theamount of $589,851. The State also allegedthat Feit billed for nerve block injections usedto alleviate pain when, in fact, he simply ad-ministered less invasive intramuscular injec-tions using narcotics such as Demerol or mor-phine, a practice sometimes referred to as“up-coding.” In addition to the Medicare Pro-gram, Aetna Insurance Company, HorizonBlue Cross Blue Shield, and Empire InsuranceCompany were allegedly falsely billed fornerve blocks when patients merely receivedless invasive and less expensive intramuscularinjections. It is also alleged that Feit submit-ted false claims to Horizon Blue Cross BlueShield for medical services not rendered.State v. Gayford Yaw

On November 2, 2006, Gayford Yaw pledguilty to an Accusation charging him withunlawful taking. Yaw, who was employed asa pharmacy technician at Atlantic HealthSystems/Morristown Hospital and at OjahPharmacy located on Sussex Turnpike inEast Orange, admitted that, between Septem-ber 26, 2002 and June 9, 2004, he stole severaldrugs from the Morristown Hospital pharma-ceutical inventory, including Zithromax,Combivir, Lipitor, Zocor, Accupril, Diovan,Celebrex, Augmentin, Zoloft, Zyprexa, andothers. He also admitted that he sold the stolendrugs to various persons who owned or oper-ated pharmacies so that the drugs could be re-sold to customers of the pharmacies. In total,Yaw admitted to stealing approximately$13,438 worth of drugs. He is scheduled to besentenced in 2007.

State v. Ademola T. Salami, et al.

On November 8, 2006, a State Grand Juryreturned an indictment charging Ademola T.Salami, a licensed pharmacist, and the phar-macy he owned and operated, Bethel Phar-macy, Inc., located at 301 Osborne Terrace inNewark, with Health Care Claims Fraud andMedicaid fraud. According to the indictment,between January 1 and April 10, 2004,Salami, through Bethel Pharmacy, allegedlysubmitted claims to the Medicaid programfor false prescriptions. The State allegedthat the prescriptions were false because atleast 12 prescriptions were forged and back-dated, and the remaining 80 were not pre-scribed by the doctor whose purported sig-nature was, in fact, forged on the prescrip-tion form. In total, the State alleged thatSalami and Bethel Pharmacy billed theMedicaid program approximately $16,851based on phony prescriptions.State v. Julio Anthony Munoz, et al.

On October 19, 2006, TNT Medical Sup-ply, Inc., pled guilty to Health Care ClaimsFraud. On the same date, Julio AnthonyMunoz was admitted into the PTI Programconditioned upon him paying $67,728 in res-titution and penalties. The court also de-barred him from participating in the Medic-aid program for a period of eight years. Thecorporation will be sentenced in early 2007.A State Grand Jury previously returned anindictment charging Munoz and TNT withHealth Care Claims Fraud and Medicaidfraud. According to the indictment, Munoz,a Medicaid provider, owned, operated, andcontrolled TNT. The State alleged that, be-tween January 2002 and August 2003,Munoz and his corporation falsely billed theMedicaid program for the most expensive

surgical support stockings when the least ex-pensive stocking was provided to the Medic-aid patients. Surgical stockings are prescribedfor patients for circulatory and related medi-cal conditions. Surgical stockings may bebilled in amounts ranging from $24 to $120.The State alleged that Munoz falsely billed theMedicaid program approximately $29,840.State v. Abdelraow Ismaiel

On December 18, 2006, AbdelraowIsmaiel was charged by way of an Accusa-tion charging him with Medicaid fraud. Ac-cording to the Accusation, Ismaiel was theowner and operator of Careway InvalidCoach, a provider of transportation servicesto Medicaid patients to facilitate travel tomedical appointments for treatments. Be-tween May 1, 2004 and January 31, 2005,Ismaiel allegedly offered money as bribes toseveral medical facility employees so thatthose employees would recommend the utili-zation of Careway for patient transportationand Careway could then bill the Medicaidprogram for any transportation services pro-vided. Ismaiel will be sentenced in 2007.Patient and Elder Abuse3

State v. Donald Beckett

Following a three-day jury trial, on March30, 2006, Donald Beckett was acquitted ofaggravated assault. A Sussex County GrandJury previously returned an indictment charg-ing him with aggravated assault. According tothe indictment, on October 11, 2003, Becket,who was employed at a SubAcute Rehabilita-tion Center as a Certified Nursing Assistant,allegedly committed an assault on an elderlyresident of the Rehab Center.State v. Sharmelanie L. Peppers

In cooperation with Delaware law enforce-ment, on January 30, 2006, OIFP MedicaidFraud Control Unit investigators arrestedSharmelanie L. Peppers, a/k/a Charmelanie L.Peppers, a/k/a Larissa Moore, on a fugitivewarrant based upon a Delaware complaint andwarrant for Abuse, Mistreatment, or Neglectof a Patient. The patient subsequently died.Delaware requested OIFP’s assistance as Pep-pers was then employed as a live-in assistant,caring for an elderly patient in New Jersey.Peppers also had numerous outstanding trafficwarrants in New Jersey. Peppers was processedand transported to the Mercer County Correc-tional Facility where she was released into thecustody of the Department of Corrections.The New Castle County, Delaware, Police De-partment was notified of the arrest and will beextraditing Peppers to Delaware.

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State v. Madeline Petit

On September 28, 2006, Madeline Petitpled guilty to an indictment charging herwith aggravated assault. On December 18,2006, the court admitted her into the PTIProgram. On February 22, 2006, a StateGrand Jury returned an indictment chargingPetit with assault upon an institutionalizedelderly patient. According to the indictment,on January 15, 2004, Petit, a Certified Nurs-ing Assistant employed at a patient care andrehabilitation center, allegedly committed anassault on an 80-year-old patient.State v. Shirley Earnest

On April 13, 2006, Shirley Earnest wascharged by way of Accusation with thecrime of criminal restraint. She was admit-ted into the PTI Program and surrenderedher Certified Nursing Assistant (CNA) li-cense for a period of one year. According tothe Accusation, Earnest, a licensed CNA, al-legedly falsely imprisoned an elderly residentof a nursing home.State v. Eldora McCall

On May 24, 2006, Eldora McCall pledguilty to uttering a forged instrument andtheft of a motor vehicle. She is scheduled tobe sentenced in early 2007. On February 22,2006, a State Grand Jury returned an indict-ment charging McCall with uttering a forgeddocument, attempted theft by deception,and theft by unlawful taking. According tothe indictment, between March 31, 2004 andJuly 16, 2005, McCall, who was also knownas Eldora Collins, forged two checks drawnon the account of an elderly nursing home pa-tient in an effort to steal money belonging tothe patient. Additionally, the indictment al-leged that McCall stole the same patient’s2001 Buick LeSabre. The patient was a resi-dent of a nursing home facility located inEast Windsor Township, where McCall wasemployed as a Certified Nursing Assistant.State v. Russell P. Smith, III

On May 30, 2006, Russell P. Smith, III, aLicensed Practical Nurse (LPN) in New Jer-sey, pled guilty to criminal sexual contact.On July 28, 2006, the court sentenced Smithto five years probation and ordered him toforfeit his LPN license. A Mercer County

Grand Jury previously returned an indict-ment charging Smith with aggravated assaultand aggravated criminal sexual contact. Ac-cording to the indictment, on July 1, 2004and August 13, 2004, Smith allegedly as-saulted various residents of a nursing and re-habilitation center located in Trenton. TheState alleged that Smith committed an aggra-vated assault on four patients. The State alsoalleged that Smith committed an aggravatedsexual assault on one of those patients. Thealleged victims were patients were between73 and 87 years old.State v. Charlotte Moreland

On August 23, 2006, a Mercer CountyGrand Jury returned an indictment chargingCharlotte Moreland with theft by unlawfultaking. According to the indictment, be-tween October 24 and 31, 2005, Moreland,a Certified Nursing Assistant employed as anaide for a 90-year-old resident of an assistedliving facility located in East Windsor Town-ship, allegedly used an ATM card withoutpermission to steal approximately $1,840from the resident’s bank account. OIFP in-vestigators arrested Moreland on October18, 2006. The case is pending trial.State v. Antoinette Davis

On December 1, 2006, the court sen-tenced Antoinette Davis to one year proba-tion. On September 18, 2006, Davis pledguilty to an Accusation charging her with ut-tering a forged document. Davis admittedthat on or about August 18, 2005, she sub-mitted a forged letter to the Department ofHealth and Senior Services. The letter waspart of an application package so that Daviscould obtain credentials as a Certified Nurs-ing Assistant. Certified Nursing Assistants are

often employed in nursing homes to assistpatients who are sometimes Medicaid benefi-ciaries. Davis admitted that the forged letterfalsely advised the Department of Healthand Senior Services that she had completed aperiod of criminal probation for theft fromBurlington County when, in fact, she had notcompleted her probationary term and wasstill on probation.State v. Helen Williamson

On October 25, 2006, an Ocean CountyGrand Jury returned an indictment chargingHelen Williamson with neglect of the elderlyand theft from the person. According to theindictment, between October 6 and 19,2004, Williamson allegedly wrongfully ne-glected to care for a patient at a convalescentcenter located in Manahawkin. The State al-leges that Williamson withheld pain medica-tion from the patient. The State also allegesthat Williamson stole a duragesic medicationpatch from the patient. A duragesic medica-tion patch time releases pain medication topatients requiring such therapy. Pain medica-tion patches are sometimes sought by personswho abuse narcotic substances. The case ispending trial.

3. Too frequently, Medicaid beneficiaries are subjected to neglect and abuse.The Office of the Insurance Fraud Prosecutor through its Elder Abuse and Ne-glect Unit in the Medicaid Fraud Section has begun an initiative to investigateand prosecute such allegations.

OIFP Criminal Case Notes

Calendar year 2006 marked the second fullyear of operation for the Elder Abuse andNeglect Unit within the Medicaid FraudSection. Created in 2004, the mission of thisspecialized unit is the detection, investiga-tion, and prosecution of instances of allegedpatient abuse and neglect that occur at anyMedicaid provider facility. A provider facilityis one that receives Medicaid dollars. Thevictim of abuse or neglect at such a facilityneed not be a Medicaid recipient.

Within the State of New Jersey, there areover 370 long term care facilities (nursinghomes) where thousands of vulnerable elderlycitizens reside. Combined with the elderly anddisabled populations of numerous assisted liv-ing facilities and board and care homes, as wellas those individuals who continue to reside athome but are reliant on home health aides, thepotential for substantial harm being visitedupon the elderly and disabled segments of ourpopulation is ever present.

In addition to the investigation and pros-ecution of cases, over the past two years, theElder Abuse and Neglect Unit has success-fully developed various sources of referralsfor the reporting of cases of abuse and ne-glect. This outreach effort is ongoing. Thewisdom of establishing an abuse and neglectunit with statewide prosecutorial authorityhas been confirmed by the enthusiastic re-sponse from other interested regulatory agen-cies that lack the authority to instigate crimi-nal prosecutions and have, in years past, re-ferred their investigative findings to theCounty Prosecutors’ Offices when criminalprosecution was believed to be warranted.Both the Licensing and Certification Unitand the Assessment and Survey Unit withinthe Department of Health and Senior Ser-vices, Long Term Care Systems, have proven

to be invaluable allies contributing to thesuccess of the Elder Abuse and NeglectUnit. A similar relationship is being devel-oped with various offices within the Depart-ment of Human Services.

This past year, the Elder Abuse and Ne-glect Unit also became a member of theNew Jersey State TRIAD Association.TRIAD is an organization devoted to ad-dressing the safety concerns of the seniorcommunity. The goal of TRIAD is to reduceincidents of crime against the elderly popu-lation by the development of a statewidenetwork of community based crime preven-tion programs, advocacy, and training con-ducted through a partnership of law en-forcement, senior citizens, and communityservice organizations. The Elder Abuse andNeglect Unit will work to help advance themission of this organization and thereby in-crease public awareness of the risks faced bythe institutionalized elderly.

The individual County Prosecutors’ Officescontinue to be active partners in the prosecu-tion of crimes involving the elderly. In addi-tion to having concurrent jurisdiction withthe Elder Abuse and Neglect Unit over inci-dents occurring within Medicaid provider fa-cilities, the County Prosecutors are also re-sponsible for all other cases involving elderlyand disabled victims. Federal regulations re-quire that dispositions in all cases involvingoffenses committed upon patients in Medicaidprovider facilities be reported to the Officeof the Inspector General of the federal De-partment of Health and Human Services. Inorder to assist the counties with this responsi-bility, the Elder Abuse and Neglect Unitmonitors all county patient abuse and neglectprosecutions in order to gather informationconcerning dispositions and thereafter reportthose dispositions as required by federal law.

The Unit also stands ready to assist the lo-cal authorities by referring information con-cerning all dispositions to the various stateoccupational licensing agencies. The revoca-tion or suspension of a professional license isa primary goal of a prosecution. This action

ensures a defendant will not be in a job oroccupation that will allow ill advised accessto the institutionalized elderly. Forms havebeen developed over the past year in order tostreamline this process. In order to furthercement the partnership between the ElderAbuse and Neglect Unit and the counties, aseries of training programs addressing prob-lems unique to the investigation and pros-ecution of abuse and neglect cases are alsounder development.

While the crimes of aggravated assaultupon the institutionalized elderly and elderlyneglect as defined in the code of criminal jus-tice remain the primary tools of the ElderAbuse and Neglect Unit, experience hasshown that the segment of the populationserved by the Unit is no less immune to othertypes of criminal behavior. In addition to theaforesaid assault and neglect offenses, calen-dar year 2006 also saw prosecutions of crimesfor sex offenses, forgery, uttering forged in-struments, criminal restraint, false imprison-ment, and various types of theft, includingmotor vehicle theft, theft from the person,and theft by unlawful taking.

An unintended but not unwelcome conse-quence of the operation of the Elder Abuseand Neglect Unit has been its role as a clearinghouse not only for regulatory agencies seekingsecond opinions on difficult cases but also as anoffice of last resort for family members of vic-tims not satisfied with conclusions reached inunrelated investigations. When circumstanceswarrant, the Unit has not been hesitant to re-quest copies of all previous investigation re-ports in order to review them with a fresh per-spective. While a previous conclusion is rarelychallenged, a second review provides a con-cerned citizen with the satisfaction of knowingthat his or her concerns have been giventhoughtful consideration.

As it enters its third full year of existence,the Elder Abuse and Neglect Unit is matur-ing into an effective force against those whowould take advantage of a vulnerable popu-lation. Abuse or neglect can be reported di-rectly to the Elder Abuse and Neglect Unitat (609) 896-8772.

by John Krayniak and William HoymanProtecting the Elderly Population

William Hoyman is a Deputy Attorney Generalassigned to OIFP’s Medicaid Fraud Control Unit

since 2000. For the past three years, he hasconcentrated on patient abuse cases. He

previously served as both an AssistantCounty Prosecutor and Public Defender.

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OIFP Civil Case Notes

During 2006, the following Consent Or-ders were executed in amounts of $5,000and above. Where appropriate, the criminaldisposition of cases that were the subject ofboth criminal and civil enforcement actionsare reported in the OIFP Criminal Case Notessection of this Annual Report.

AUTO FRAUDAutomobile Application FraudIn the Matter of James GravesJames Graves executed a Consent Order

for $5,000 on July 19, 2006. Graves know-ingly provided false and misleading informa-tion to Rutgers Casualty Insurance Companyand the Great American Insurance Company.Graves applied for and obtained auto insur-ance using the identity of another individual.

In the Matter of Deena PerkinsDeena Perkins executed a Consent Order

for $5,000 on August 23, 2006. Followingher involvement in an automobile accident,Perkins contacted GEICO Insurance Com-pany to file a claim and learned that herGEICO policy had lapsed. Later that day, sheapplied for automobile insurance via theinternet with E-Surance Insurance Companyand was issued a policy subsequent to the ac-cident. The following day, Perkins filed aclaim with E-Surance for the damage to hervehicle that resulted from the accident thatoccurred prior to the effective date of theE-Surance policy.

In the Matter of Joel SerranoJoel Serrano executed a Consent Order for

$5,000 on November 20, 2006. Serrano usedanother person’s identity to obtain motor-cycle insurance with Rider Insurance Com-pany. Serrano subsequently filed a propertydamage claim with Rider, which was paidby the carrier.

Automobile “Give Up” and Theft ClaimsIn the Matter of Nora TermaniniNora Termanini executed a Consent Order

for $5,000 on January 18, 2006. Termaninifiled an auto theft claim with Hanover In-surance Company when, in fact, she willingly“gave up” the vehicle.

In the Matter of Suly AyalaSuly Ayala executed a Consent Order for

$5,000 on January 18, 2006. Ayala submitteda fraudulent auto theft claim with LibertyMutual Insurance Company when, in fact, shearranged for the vehicle’s disposition.

In the Matter of Maria AmendoliaMaria Amendolia executed a Consent Order

for $5,000 on January 18, 2006. Amendolia’svehicle was purchased by the FBI Auto TheftTask Force as part of a “give up” sting opera-tion. Following the vehicle’s purchase, she re-ported it stolen to the Philadelphia PoliceDepartment and filed a fraudulent theftclaim with State Farm Insurance Company.

In the Matter of William VasquezWilliam Vasquez executed a Consent Or-

der for $5,000 on January 18, 2006. Vasquezwas arrested by Newark Police for the arsonof another individual’s vehicle in an auto“give up” scheme. The matter was referredby First Trenton Indemnity Company.

In the Matter of Sandra RodriguezSandra Rodriguez executed a Consent

Order for $5,000 on January 13, 2006.Rodriguez reported her vehicle stolen to theVineland Police Department and to RutgersCasualty Insurance Company. She subse-quently admitted her involvement in the al-leged theft and arson of the vehicle.

In the Matter of Martin CardoneMartin Cardone executed a Consent Order

for $5,000 on February 15, 2006. Cardonefiled an auto theft claim stating his vehiclehad been stolen when, in fact, he was drivingthe vehicle in Florida. The case was referredby State Farm Insurance Company.

In the Matter of Jeannot WildorJeannot Wildor executed a Consent Order

for $5,000 on February 15, 2006. Wildorfiled an auto theft claim with Liberty MutualInsurance Company when, in fact, she had“given up” the vehicle.

In the Matter of Ricardo FigueroaRicardo Figueroa executed a Consent

Order for $5,000 on February 15, 2006.Figueroa, a Bergen County police officer,filed an auto theft claim with State Farm In-surance Company stating that his vehicle hadbeen stolen when, in fact, it had previouslybeen sold to an undercover police officer.

In the Matter of Juan NegronJuan Negron executed a Consent Order

for $5,000 on February 15, 2006. Negronhad reported his vehicle stolen to the Lake-wood Police Department. Prior to his filingthe report, Negron’s vehicle was found burn-ing in New York City. Negron subsequentlyadmitted that he “gave up” the vehicle be-cause he could no longer afford the pay-ments. The matter was referred by HighPoint Insurance Company.

In the Matter of Jennifer ClughJennifer Clugh executed a Consent Order

for $5,000 on February 15, 2006. Clugh’s ve-hicle was purchased by the FBI Auto TheftTask Force as part of a “give up” sting op-eration. Thereafter, she reported the vehiclestolen to the Philadelphia Police Departmentand filed a fraudulent theft claim withAllstate Insurance Company.

In the Matter of Andres AcevedoAndres Acevedo executed a Consent Or-

der for $5,000 on February 15, 2006.Acevedo knowingly conspired with anotherto “give up” his insured vehicle and to sub-mit a fraudulent automobile theft claim toOhio Casualty Group.

In the Matter of Jose A. VargasJose A. Vargas executed a Consent Order for

$5,000 on March 15, 2006. Vargas knowinglysubmitted a fraudulent auto theft insuranceclaim to Liberty Mutual Insurance Company.

In the Matter of Elsy G. LazoElsy G. Lazo executed a Consent Order

for $5,000 on March 15, 2006. Lazo know-ingly presented both written and oral false state-ments to MetLife Auto & Home InsuranceCompany and the Union City Police Depart-ment as part of a fraudulent auto theft claim.

In the Matter of Errold LanierErrold Lanier executed a Consent Order

for $5,000 on March 15, 2006. Lanier know-ingly withheld and concealed informationrelevant to a fraudulent auto theft claim sub-mitted by his wife to Clarendon InsuranceCompany. Lanier failed to inform his wife,who was the named insured, that the vehiclein question had been repossessed.

In the Matter of Manuel MolinaManuel Molina executed a Consent Order

for $5,000 on April 19, 2006. Molina stagedthe theft of his vehicle and fraudulently re-ported it stolen to the Newark Police De-partment and Allstate Insurance Company.

In the Matter of James PatunasJames Patunas executed a Consent Order

for $5,000 on April 19, 2006. Patunas filed afraudulent auto theft claim with State FarmInsurance Company.

In the Matter of Romont ThomasRomont Thomas executed a Consent Or-

der for $5,000 on April 19, 2006. Thomasfiled a fraudulent auto theft claim stating hisvehicle was stolen when, in fact, he gave itto an undercover New York police officerfor disposition. The matter was referred byFirst Trenton Indemnity Company.

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OIFP Civil Case Notes

ing the accident occurred three weeks priorto the date listed on the Utica claim.

In the Matter of Ellis DecresceEllis Decresce executed a Consent Order

for $5,000 on October 18, 2006. Decresceknowingly made a false and misleading state-ment to New Jersey Manufacturers InsuranceCompany in connection with his insuranceclaim for a motor vehicle accident in whichhis car was totaled. New Jersey Manufactur-ers paid $48,633 on this claim. Decresce alsofailed to disclose that his vehicle was beingused for business purposes and failed to dis-close the location where the vehicle was ga-raged, which resulted in an annual premiumsavings of $1,140.

In the Matter of Judith HoffmanJudith Hoffman executed a Consent Order

for $5,000 on October 18, 2006. Hoffmanknowingly altered a police report by chang-ing the time of an accident in order to be eli-gible to pursue a property damage claim. Thematter was referred by Allstate InsuranceCompany.

In the Matter of John L. KnightJohn L. Knight executed a Consent Order

for $5,000 on November 20, 2006. Knightconspired with another individual to file afalse police report that misrepresented thedate of a motor vehicle accident. Thefraudulent report was made in order to file aclaim with Clarendon National InsuranceCompany, knowing that the individual’spolicy had lapsed at the time of the accident.

Staged and Fictitious AccidentsIn the Matter of Anhuar BandyAnhuar Bandy executed a Final Judgment

by Consent in the amount of $2 million onAugust 7, 2006. Bandy committed insurancefraud by conspiring to stage automobile acci-dents and to submit false and misleading pa-perwork in support of fraudulent claims tonumerous insurance companies in order tocollect the proceeds.

In the Matter of Scot FrasierScot Frasier executed a Consent Order for

$5,000 on June 21, 2006. Frasier allegedlysubmitted two separate fraudulent autoproperty damage claims to Liberty MutualInsurance Company and State Farm Insur-ance Company, respectively, with regard to

his 1997 Nissan. Frasier admitted that theclaims were based on two accidents whichnever occurred.

HEALTH, LIFE, ANDDISABILITY FRAUD

False Health Care ClaimsIn the Matter of John HuttenbergerJohn Huttenberger executed a Consent

Order for $5,000 on March 15, 2006.Huttenberger allegedly failed to disclose thathe had consulted with a physician regarding asurgical procedure that was not performedprior to filling out his application for supple-mental health insurance. The matter was re-ferred by United Healthcare Company.

In the Matter of Steven L. ProsserSteven L. Prosser executed a Consent Or-

der for $5,000 on March 15, 2006. Prossersubmitted fraudulent receipts to HorizonBlue Cross Blue Shield for reimbursement forservices that were not rendered to him.

In the Matter of Carol Ann BenvenutoCarol Ann Benvenuto executed a Consent

Order for $5,000 on May 17, 2006. Benvenuto,while employed as a receptionist at a medicalprovider’s office, submitted false medicalclaims to Horizon Blue Cross Blue Shield forreimbursement for services that were notrendered to her. She fraudulently obtainedapproximately $1,935 for phony health in-surance claims to which she was not entitled.

In the Matter of Stephanie SlavittStephanie Slavitt executed a Consent Or-

der for $5,000 on August 23, 2006. Slavittsubmitted Custodial Nursing QuestionnaireForms to John Hancock Life Insurance Com-pany for services not rendered.

False Disability ClaimsIn the Matter of Bernard GelmanBernard Gelman executed a Consent Or-

der for $5,000 on January 18, 2006. Gelmanprovided an altered date for his son’s resigna-tion from a former employer in order for hisson to obtain disability benefits under apolicy to which he was not entitled. Thematter was referred by Prudential InsuranceCompany (High Point).

In the Matter of Richard SerbinRichard Serbin executed a Consent Order

for $50,000 on February 15, 2006. Serbinwas working while collecting disability ben-efits. Serbin previously pled guilty to falsify-ing records, was admitted into the PTI Pro-

gram, and was ordered to pay $170,869 inrestitution to Reassure America Life Insur-ance Company.

In the Matter of Thomas LagnoThomas Lagno executed a Consent Order

for $5,000 on July 19, 2006. Lagno knowinglysubmitted false and misleading information tovarious health care facilities in pursuit of sev-eral workers’ compensation claims.

In the Matter of Linda Van PeltLinda Van Pelt executed a Consent Order

for $5,000 on July 19, 2006. Van Pelt, aphysician, failed to disclose the fact that shecontinued to treat patients while collectingtotal disability and business overhead ex-pense benefits from UNUM ProvidentCorporation.

In the Matter of Willis HugginsWillis Huggins executed a Consent Order

for $5,000 on November 20, 2006. Hugginsknowingly failed to report that he had re-turned to work for a new employer whilecontinuing to collect workers’ compensationbenefits. The matter was referred by NewJersey Manufacturers Insurance Company.

In the Matter of Brenda HoffmanBrenda Hoffman executed a Consent Or-

der for $5,000 on November 17, 2006.Hoffman was working while collecting long-term disability benefits through her formeremployer. The matter was referred by TheHartford Life and Accident Company.

In the Matter of W. Lance KollmerW. Lance Kollmer executed a Consent Or-

der for $100,000 on December 20, 2006.Kollmer, a physician, knowingly misrepre-sented the extent of his physical limitationsand continued to perform surgical proce-dures while receiving disability benefits. Thematter was referred by US Life/AmericanGeneral Insurance Company.

Life Insurance FraudIn the Matter of Atul AgarwalaAtul Agarwala executed a Consent Order

for $30,000 on August 23, 2006. Agarwalaconspired with an agent working for Equi-table Life Insurance Company to backdate alife insurance policy and increase the amountof death benefits in order to gain the pro-ceeds. The policy was in the name ofAgarwala’s brother who perished in theWorld Trade Center disaster.

Provider Fraud

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In the Matter of Martha HaldopoulosMartha Haldopoulos executed a Consent

Order for $5,000 on March 15, 2006.Haldopoulos was an unlicensed providerwho billed for services. The matter was re-ferred by Oxford Health Insurance.

In the Matter of Gene HarnickGene Harnick executed a Consent Order

for $5,000 on August 23, 2006. Harnick, adentist, submitted fraudulent dental claims toAetna US Healthcare Insurance Company fordental procedures that were not rendered.

In the Matter of Kimberly McCauleyKimberly McCauley executed a Consent

Order for $5,000 on March 15, 2006.McCauley, a chiropractor, knowingly billedCigna Insurance Company for chiropracticservices not rendered.

PROPERTY ANDCASUALTY FRAUD

False Homeowners ClaimsIn the Matter of Susan BonfiglioSusan Bonfiglio executed a Consent Order

for $5,000 on January 18, 2006. Bonfiglioenhanced the extent of damage to her homeon a claim she filed with Liberty Mutual In-surance Company.

In the Matter of Sharon H. BarrettSharon H. Barrett executed a Consent Or-

der for $5,000 on June 21, 2006. Barrettclaimed that a video camera and equipmentwere damaged as the result of a fire at herresidence and submitted fraudulent receipts toCumberland Mutual Fire Insurance Companyto receive compensation for these items.

In the Matter of Phyllis ManasseriPhyllis Manasseri executed a Consent Or-

der for $5,000 on September 20, 2006.Manasseri filed a fraudulent property lossclaim with Chubb Insurance Company stat-ing that several items were stolen when, infact, she had previously sold them.

In the Matter of Thomas TizzioThomas Tizzio executed a Consent Order

for $5,000 on October 18, 2006. Tizzio pre-sented false and misleading statements toAIG Personal Lines for a homeowners bur-glary claim for stolen watches knowing thatthe watches were not stolen.

False Property Damage ClaimsIn the Matter of Dave BhaveshDave Bhavesh executed a Consent Order

for $5,000 on March 15, 2006. Bhavesh sub-mitted altered and fraudulent receipts to Se-lective Insurance Company in support of aproperty damage claim for his business.

Insurance Professional FraudIn the Matter of Umberto MazzoneUmberto Mazzone executed a Consent

Order for $5,000 on May 17, 2006.Mazzone, while employed as a claims ad-juster at Preserver Insurance Company,knowingly diverted insurance claim checksto his own personal bank account.

MEDICAID CIVIL CASESETTLEMENTS

OIFP’s Medicaid Fraud Control Unit par-ticipates in state and federal global settle-ment cases where defendants are New JerseyMedicaid providers. These cases are generallycoordinated through the National Associa-tion of Medicaid Fraud Control Units(NAMFCU). Most of these cases are federalqui tam filings. The settlement agreementsgenerally require the corporate defendants tocooperate with federal and state law en-forcement. Since the Medicaid program isfunded jointly by the state and federal gov-ernments, settlement awards generally con-sist of both a federal and state share, repre-senting the proportionate contribution ofeach governmental entity. The followingMedicaid civil case settlements were enteredinto in 2006:

Serono, Inc., and SeronoLaboratories, Inc.Serono Laboratories, Inc., makers of

Serostim, an AIDS treatment drug, enteredinto a settlement with the State of New Jer-sey on February 21, 2006. The joint state/federal investigation of Serono Laboratoriesshowed manipulated computer software pro-grams used to assist in the diagnosis andprognosis of AIDS patients, and illegal kick-backs paid to doctors to prescribe Serostimin order to increase its sales revenues. TheNew Jersey portion of the national settle-ment is $24,825,800 in restitution and inter-est, $11,855,746 of which represents theState share.

King Pharmaceuticals, Inc.King Pharmaceuticals, Inc., entered into a

settlement with the State of New Jersey onApril 12, 2006, based upon the underpay-ment of its rebates for generic drugs under

the Medicaid and PAAD rebate program.The New Jersey portion of the settlement is$4,446,449, of which $981,732 representsthe State share for the Medicaid program and$2,566,475 for the PAAD program.

Glaxo, Inc., and SmithKline Beecham, Inc.The State of New Jersey entered into a

national settlement with Glaxo over the ma-nipulation of the average wholesale price forZofran and Kytril, which are prescribed totreat nausea. On August 30, 2006, the NewJersey Medicaid program received $900,919,of which the State share was $408,178, in-cluding $204,089 in restitution and a$204,089 penalty. This recovery was increasedby $19,204 in post-agreement interest.

OmnicareOn December 8, 2006, New Jersey re-

ceived $333,263 in a Medicaid settlementwith Omnicare. The total New Jersey settle-ment, including both the federal and stateshare, was $684,557. Omnicare is an institu-tional pharmacy provider. The settlement re-solved allegations that Omnicare improperlyswitched prescriptions for fluoxetine, the ge-neric form of Prozac, for Medicaid benefi-ciaries without their doctors’ knowledge. Byswitching to tablets from the capsule formof the drug, Omnicare avoided the lowerprice allowed for the capsules under the fed-eral upper payment limit.

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State v. Rajan RihshinghaniIn June 2006, the court entered a $10,000

Stipulation of Settlement and Consent Judg-ment against Rajan Rihshinghani arising from afraudulent credit disability claim case whereinRihshinghani claimed to be disabled so that hecould receive insurance payments to meet hishome equity loan obligations. Rihshinghani, infact, was gainfully employed when he re-ceived $4,570 in credit disability benefits towhich he was not entitled.

State v. Mitchell CollinsMitchell Collins fraudulently obtained life

insurance policies with Omaha InsuranceCompany in the names of his girlfriend’schildren by stating that he was their stepfa-ther. In August 2006, the State was grantedSummary Judgment in this matter to include$10,000 in civil penalties for two violationsof the Fraud Act and attorney fees in theamount of $150.

State v. Timothy HinchmanOn August 4, 2006, a Default Judgment,

including civil penalties, attorney fees andcosts, in the amount of $18,472 was ob-tained against Timothy Hinchman.Hinchman staged the theft of his vehicleand filed a fraudulent vehicle theft claimwith his insurance carrier. Hinchman subse-quently pled guilty to charges of attemptedtheft by deception.

State v. Charles Monge, et al.In September 2006, a Default Judgment

was obtained against Charles Monge in theamount of $16,682 for his role in the stagedtheft and arson of a 1999 Honda Accord.

State v. Nguyet Thach, et al.On September 8, 2006, Default Judg-

ments, including civil penalties, attorney feesand costs, were obtained against Sang Son inthe amount of $17,226 and against NguyetThach in the amount of $17,288. Son wasthe driver of a vehicle that was involved inan accident. According to the police reportand the driver of the other vehicle, therewere no passengers in Son’s vehicle at thetime of the accident. Thach subsequentlyfiled a fraudulent PIP claim for injuries sheallegedly sustained in this accident as a pas-senger. Thach and Son also provided falsestatements to the insurance carrier in supportof this claim.

State v. Michael HarrisOn September 22, 2006, a Default Judg-

ment was obtained against Michael Harris inthe amount of $17,294. Harris falsely re-ported to the police and an insurance carrierthat he was a passenger in a vehicle that wasinvolved in an accident, when, in fact, hewas a bystander to the incident. Harris sub-sequently treated with a medical provider foralleged injuries to his arm and neck and aPIP claim was submitted on his behalf. Har-ris was eventually arrested and pled guilty toHealth Care Claims Fraud.

Professional Licensing Proceedings

MedicalIn the Matter of Axat Jani, M.D.

On January 19, 2006, to have been effec-tive October 15, 2004, the State Board ofMedical Examiners suspended the license ofAxat Jani, M.D., for a period of five yearswith the first two years retroactive to Octo-ber 15, 2004, and the remainder stayed to bea period of probation. The action was basedon a guilty plea to Health Care Claims Fraud.

In the Matter of Myron Moskowitz, D.P.M.

On March 29, 2006, the State Board ofMedical Examiners suspended the license ofMyron Moskowitz, D.P.M., for a period ofthree years with the first year active and theremainder stayed to be a period of proba-tion. The action was based on Moskowitzpracticing podiatric medicine with an ex-pired biennial registration and billing insur-ance carriers while suspended.

In the Matter of Michael Fizicki, M.D.

On July 13, 2006, the State Board ofMedical Examiners accepted the voluntarysurrender of the medical license of MichaelFizicki, M.D. The action was based onFizicki engaging in the submission of alleg-edly fraudulent insurance claims resulting inan investigation and subsequent settlementwith Horizon Blue Cross/Blue Shield.

In the Matter of Mark Freilich, M.D.

On September 14, 2006, the State Boardof Medical Examiners suspended the medi-cal license of Mark Freilich, M.D., for a pe-riod of two years with the first six monthsactive effective October 1, 2006, and the re-mainder stayed to be a period of probation.The action was based on a non vult plea tocomplaints alleging false, negligent, and in-competent interpretations of MRI studies,providing medical services for an MRI facil-ity not licensed by the Department ofHealth and Senior Services during the periodof time when the services were rendered,and failing to hold a current biennial regis-tration during the period in question.

In the Matter of Ronald Collins, M.D.

On November 14, 2006, the State Boardof Medical Examiners accepted the surren-der of the license of Ronald Collins, M.D.,with prejudice. The action was based onCollins entering a plea of no contest to all ofthe allegations contained in the State’s com-

plaint filed on May 22, 2006. Those allega-tions included, but were not limited to,Collins performing grossly inadequate clinicalexaminations and medical management ofpatients reporting personal injury; Collins di-recting, authorizing, ratifying or condoningthe ordering and performance of unnecessarycervical and lumbar electrodiagnostic testingroutinely on all patients involved in rear-endauto collisions; Collins directing, authorizing,ratifying or condoning the performance ofelectrodiagnostic testing on patients, someof whom he had never seen or examined andpermitting tests to be performed by unli-censed and unsupervised persons; Collins en-gaging in an extended pattern of conduct towhich he allowed himself to be employed byunlicensed persons to perform professionalservices in violation of N.J.A.C. 13:35-6.16(f); and Collins ordering, ratifying orcondoning diagnostic testing performed byhimself and others in a grossly incompetentor grossly negligent manner, preparing testreports containing fabricated data and un-supported diagnoses and billing at grossly in-flated and excessive fees.

DentalIn the Matter of Rosemarie DiMeola,Registered Dental Hygienist

The State Board of Dentistry reprimandedRosemarie DiMeola, R.D.H., for automobileapplication fraud.

In the Matter of Roger Brown, D.D.S.

On May, 17, 2006, the State Board ofDentistry suspended the license of RogerBrown, D.D.S., for a period of five yearswith the first 364 days active effective July29, 2005, and with the remainder stayed tobe a period of probation. The action wasbased upon Brown’s guilty plea to HealthCare Claims Fraud.

Professional CounselorsIn the Matter of Anthony Panichella, P.C.

The Professional Counselor ExaminersCommittee accepted the voluntary surren-der of the license of Anthony Panichella,P.C., with prejudice based upon Panichella’sguilty plea to unauthorized practice ofmedicine. The scope of a professional coun-seling license does not permit the prescrib-ing of medicine.

ChiropracticIn the Matter of Craig Klein, D.C.

On February 16, 2006, the State Board ofChiropractic Examiners suspended the licenseof Craig Klein, D.C., for a period of fiveyears with the first two years active and theremainder stayed to be a period of probation.The action was based upon the resolution ofan Accusation filed against Klein alleging theuse of “runners” for referral of patients.

In the Matter of Mark Radowitz, D.C.

On May 8, 2006, the State Board of Chi-ropractic Examiners accepted the licensuresurrender of Mark Radowitz, D.C., to bedeemed a revocation effective April 21,2006. The action was based on Radowitz’guilty plea to Health Care Claims Fraud.

In the Matter of Kimberly McCauley, D.C. (a/k/a Kimberly Stark, D.C.)

On July 12, 2006, the State Board of Chi-ropractic Board Examiners reprimanded thelicense of Kimberly McCauley, D.C., basedupon McCauley billing an insurance carrierfor chiropractic services not rendered to twopatients for a total of ten visits.

PharmacyIn the Matter of William Adamshick, R.P.

On March 9, 2006, the New Jersey Boardof Pharmacy suspended the license of Will-iam Adamshick, R.P., for one year basedupon Adamshick’s criminal conviction forHealth Care Claims Fraud.

In the Matter of Michael Stavitski, R.P.

On November 9, 2006, the New JerseyBoard of Pharmacy revoked the license ofMichael Stavitski, R.P., based upon his crimi-nal conviction for Health Care Claims Fraud.

In the Matter of Ojah Pharmacy

On December 14, 2006, the State Board ofPharmacy revoked the permit of Ojah Phar-macy to operate as a pharmacy in the State ofNew Jersey based upon Ojah Pharmacy beingconvicted of Health Care Claims Fraud inthat the corporation paid Medicaid recipientsfor their prescriptions for life-saving medica-tions with the prescriptions being billed forbut never dispensed to the actual patient.

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