TAMPA, Fla., May 16, 2011 /PRNewswire/ -- Hillsborough County Sheriff's Office issued more than 50 arrest warrants stemming from its five-month investigation, "Operation No Pain No Gain." The probe, aided by Direct General Insurance Company, arrested clinic owners and managers, as well as general employees from four Tampa medical clinics. Criminal charges range from Conspiracy to Commit Racketeering Influenced Corrupt Organization (RICO), a first-degree felony, to Filing False and Fraudulent Insurance Claims.
The recent busts come less than two weeks after the conclusion of 2011 Florida Legislative Session. During the session, Personal Injury Protection (PIP) reform proposals (HB1411 & SB1930) were supported by law enforcement, state officials, insurance industry and consumer advocate groups. The proposed legislation would have empowered law enforcement agencies, among others, to fight this growing epidemic of felony, staged accidents and auto insurance fraud in Florida. However, the proposed PIP reform legislation failed to gain the votes needed in both the House and Senate, abruptly derailing fraud reform of any kind.
"Florida ranks number one in the nation for staged accidents and auto insurance fraud. Direct General has taken a 'zero tolerance' policy toward staged accidents and auto insurance fraud, which has reached epidemic proportions in Florida," said Tom Kaschalk, Direct General's Chief Claims Officer. "These arrests illustrate the magnitude of the crisis and are very significant, but we're only treating the symptom. We need public policy remedies that have 'zero tolerance' and give law enforcement an edge in curtailing and dismantling these organized rings across the state."
Ron Poindexter, Director of Operations for the National Insurance Crime Bureau, advised that, "Medical fraud crime can be among the most intricate types of fraud to investigate. Being able to bring our collective resources to bear on this problem is critical to our success." Authorities estimate the medical clinics scammed auto insurers out of millions of dollars during the course of the investigation. Among those implicated were clinic owners and managers, massage therapists, clerks and receptionists.
"The public needs to know how insidious, blatant and costly PIP insurance fraud has become in Florida," Kaschalk said. "At the end of the day, it's the consumer who becomes a victim of these fraudsters. A family insuring two cars pays an estimated $100 a year in premium due to PIP fraud. Moreover, insurers are left with few other choices than to tighten underwriting requirements ultimately making auto insurance less available to Floridians. And of most concern, staged accidents subject all motorists and their family members to risk of serious injury."
"Operation No Pain No Gain" showcased an assembly of agencies including National Insurance Crime Bureau (NICB), Florida's Department of Financial Services, Hillsborough County Office of State Attorney, Direct General and more than a half dozen other insurance carriers.
About Direct General Insurance Company
Direct General Insurance Company is a wholly owned subsidiary of Direct General Corporation, a Nashville, Tennessee-headquartered insurance holding company that offers non-standard personal automobile insurance, motorcycle insurance, premium financing services and other insurance and non-insurance products, all through its family of companies. Direct General Insurance Company writes and sells auto insurance policies in Florida under the Direct Auto Insurance brand through more than 100 affiliated retail storefronts statewide.
SOURCE Direct General Insurance Company