Insurance fraud investigators in Washington state sent 11 cases to court last year, which resulted in 32 felony charges that saved consumers in 11 counties more than $237,000 in immediate losses, according to the office of state Insurance Commissioner Mike Kreidler.
Kreidler’s Special Investigations Unit pursued criminal cases involving false insurance claims, conspiracy, forgery, money laundering and first- and second-degree theft. Courts ordered more than $125,000 of restitution and fines. The bulk of the cases occurred in King, Pierce, Snohomish and Spokane counties, according to Kreidler’s office.
Investigators highlighted several high-profile cases from 2013:
– Keith Scribner of Spokane was convicted of insurance fraud and theft in March. He filed a claim on behalf of his mother, whose patio cover was damaged by heavy snow. He attempted to convince Liberty Mutual to pay upwards of $200,000 to replace the cover, which was worth only about $4,000. Scribner misrepresented the size and price of the original patio cover, but was caught when fraud investigators found an old appraisal that proved the original patio cover was a small, canvas cover, rather than a structure that spanned the length of the entire patio and wrapped around the chimney. Scribner was sentenced to 240 hours of community service, 15 days of electronic home monitoring and $7,000 in fines.
– Kevin Kolenda sold insurance across the nation for golf tournament hole-in-one prizes. In Washington, he failed to pay several claims. In October 2013, he pled guilty to two counts of selling insurance without a license and one count of first-degree theft. He was ordered to pay $15,000 in restitution. Kolenda is a repeat offender; similar complaints have been filed against him in several other states and he’s been prosecuted and barred from selling insurance in Connecticut and Washington. Kolenda will be sentenced in King County Superior Court in February 2014.
– Jenny Balsz of Colville pleaded guilty in May 2013 to insurance fraud after making false claims for more than $20,000 after a fire destroyed her house. Investigators were unable to determine the cause of the blaze , but Safeco and SIU investigators determined that Balsz tried to claim furniture and a clarinet were destroyed – items that she never owned. She was sentenced to 30 days in jail and $850 in fines and fees.
– Seattle attorney Edward Callow and former insurance adjuster Fariborz (Romeo) Rahrovi, also of Seattle, were charged in December 2013 with first-degree theft, money laundering, perjury and obtaining a signature by duress, all felonies. The pair are accused of defrauding a Nationwide Insurance customer who was disabled in an auto accident. Nationwide paid its client $525,000, but Callow and Rahrovi are accused of keeping $200,000 and $165,000, respectively. Kreidler’s special investigators are interested in hearing from others who may have been a victim of Callow. A warrant has been issued for Callow’s arrest after he failed to appear for his initial hearing. Rahrovi will appear in King County Superior Court on Jan. 9.
Kreidler’s Special Investigations Unit receives an average of 200 referrals regarding criminal insurance fraud each month. The unit works closely with insurance companies, the National Association of Insurance Commissioners, local county prosecutors and the Washington state attorney general’s office.
In 2013, investigators handled 78 criminal cases. Thirty five search warrants were served on various banks, Internet service providers, offices and other businesses in support of these investigations.
Lesser fines and enforcement actions
Kreidler also issued close to $800,000 in insurance-related fines and enforcement actions between April 10 and Dec. 10, 2013. Since 2013, the commissioner’s office has issued more than $14 million in fines, which when collected are put toward the state’s general fund to pay for other services.
The piecemeal nature of insurance fraud data can make it difficult to discern trends of illicit activities within the industry. A 2013 national survey noted last September by Insurance Journal, which covers regional, national and international insurance news, indicated that brokers in the U.S. and Canada anticipate rises in personal lines and workers’ compensation fraud.
The following list of fines and enforcement actions was released Jan. 3 by Kreidler’s office.
Companies or other entities that were fined more than $50,000:
– Security Life Insurance Company of America: fined $75,000
– Allianz Life Insurance Company of North America, fined $150,000
– National Union Fire Insurance Company of Pittsburgh, PA, fined $60,000
– Sun Life Assurance Company of Canada (U.S.), fined $50,000
– Hartford Accident And Indemnity Company, Hartford Casualty Insurance Company Hartford Insurance Company Of The Midwest, Trumbull Insurance Company; fined $100,000
– Access Plans, Inc. and Alliance Healthcard of Florida, Inc., fined $131,800
– Monumental Life Insurance Company, fined $150,000
– American Zurich Insurance Company, American Guarantee & Liability Insurance Company, Colonial American Casualty & Surety Company, Fidelity & Deposit Company of Maryland, Zurich American Insurance Company of Illinois, Zurich American Insurance Company, New York, NY; fined $50,000
Agents and brokers fined more than $2,000:
– Kent Erickson, Mount Vernon; fined $2,000
– Francisco L. Murillo, Federal Way; fined $4,000
– Smith Freed & Eberhard PC, Portland; fined $2,000
– VJL Golf Inc. dba Seattle Golf Tournament Services, Vince Longbucco, Seattle; fined $10,000
– Patrick L. Wissmiller, Wissmiller Inc. dba Regal Aviation Insurance, Portland; fined $3,000
– Terry E. Laxton, Monroe; fined $3,000
– Bernard V. Reid, Spokane; fined $6,000
Agents and brokers whose licenses were revoked:
– Bryan Patrick of Boise
– David Hueller of Green Bay, Wisc.
– Michael P. Ippolito of South Hadley, Mass.
– Mark A. Zimmerman of Mill Creek, Wash.
– AUA Inc. of Greensboro, N.C.
– Tanya Cardoza of Kelso, Wash.
– Richard A. Cartuyvelles of Greenville, Ind.
– Paul R. Keller, Spokane, Wash.
– Joshua W. Bartley of Eden Prairie, Minn.
– Susan L. Creswell of Monroe, Wash.
– Justin McKinnon of Freemont, Mich.
– David Garcia of Seattle, Wash.
– Ronald E. Hatfield and Solutions Insurance Group LLC of Colorado Springs, Colo.
– Maria A. Diaz of Federal Way, Wash.
– Laurence J. Marino of Rathdrum, Idaho
– Stacy P. Scott of Vancouver, Wash.
– Richard J. Finn of Carson City, Nev.
– Aaron R. Johnson of Renton, Wash.
– Christopher Smith and Smith Family Bail Bonds Inc. of Spokane, Wash.
– Kim Dinh Tran of St. Petersburg, Fla.
– Cindy S. Benaim of Macomb, Mich.
– Paul Genest of Sedro Woolley, Wash.
– Raymond W. Madison of Lafayette, Ore.
Cease and desist orders:
– Guardian Protection Products Inc. and RPM Wood Finishes Group of Hickory, N.C.
– Mortgage and Insurance Advertising Services LLC, Homestead Group Inc., David R. Fields of Marriottsville, Md.
– Robert Scott Sherwood of National City, Calif.
– Under Par Golf Services, Dominik Longbucco, Vince Longbucco of Boise, Idaho
– VJL Golf Inc. dba Seattle Golf Tournament Services, Vince Longbucco of Seattle
– TicketsBite LLC, Jason Stackman and Christopher Thomas of Las Vegas, Nev.
– Global Warranty Group LLC and Wireless Protection Program Association, dba www.globalwarrantygroup.com, www.wirelessprotectionprogram.com, and Arthur Krantz, Charles S. Pipia, and Andrew J. Schenker of St. James, N.Y.
– William C. Breedlove, III of Hendersonville, Tenn.
– Stephanie K. Dahl of Woodinville, Wash.
Evan Marczynski, associate editor of The Bellingham Business Journal, can be reached at 360-647-8805, or firstname.lastname@example.org.