Raid on Tampa Medical Clinic Is Latest in War on Staged Crashes and Medical Fraud

TAMPA, Fla., July 29 /PRNewswire/ -- A West Tampa medical clinic was raided and shut down, and four people were charged with racketeering offenses, in the latest salvo of law enforcement's war on staged auto accidents and bogus medical clinics, which is being supported by Direct General Insurance Company.

On July 16, the Hillsborough County Sheriff's Office raided Medical Rehab Choice, 3104 West Waters Avenue, #200, as part of a three-month undercover probe into staged car crashes and medical clinic fraud. Investigators uncovered evidence that people involved in staging auto accidents were associated with the clinic, and also found discrepancies in medical bills submitted to auto insurers for treatments that supposedly occurred.

Arrested during the raid were Jacqueline Rosales, 27, a receptionist, and Sugeidi Serrano, 32, a licensed medical technician, on charges of operating a Racketeering Influenced Corrupt Organization (RICO). Not at the scene but also facing RICO charges were Juan Martinez, 28, the clinic manager, and Ernie Azucey, 25, also a licensed medical technician. The racketeering charges the four face are similar to those that law enforcement agencies often file against criminals involved in organized crime or drug trafficking rings.

The Hillsborough County Sheriff's Office raid was part of an ongoing crackdown on staged car crashes and medical clinic fraud in West Central Florida that is being aided by Direct General Insurance Company, the National Insurance Crime Bureau (NICB), and other auto insurers and law enforcement agencies.

In April, the Hillsborough County Sheriff's Office, Direct General and others announced that an eight-month undercover probe dubbed "Operation Crash for Cash" had resulted in the arrests of more than 50 people and investigations into four medical clinics.

Then in May, the NICB announced that Florida ranked number one among all states for the number of staged accidents and questionable claims reported between 2007 and 2009. Tampa is now the second worst city in the United States for staged accidents, with reported crashes quadrupling in one year. Miami is the third worst city, and Orlando is fourth worst.

Direct General is taking a "zero tolerance" policy toward staged accidents and auto insurance fraud, and is working closely with law enforcement agencies to battle this fraud wave.

"Direct General will continue to support law enforcement agencies in their effort to stamp out insurance fraud wherever it occurs," said Jim Sclafani, Direct General's chief claims officer. "We take insurance fraud very seriously, and we applaud the continuing efforts of the Hillsborough County Sheriff's Office, the Florida Department of Financial Services and the NICB to rid Florida's streets of criminals who are endangering innocent drivers and committing fraud that drives up the cost of auto insurance for everyone."

In order for insurers to keep down the cost of auto coverage for law-abiding drivers, a concerted effort from law enforcement officials, medical and legal professionals, auto insurers, legislators and public policymakers is needed to reduce the epidemic of staged accidents and fraud currently occurring in Florida, Sclafani said.

Ron Poindexter, the division director of the NICB in Tampa, praised Direct General and other auto insurers, noting that "bringing their collective resources to bear on this problem will help reduce these types of staged accidents and medical clinic fraud."

This past spring, proposed bills were filed in the Florida Legislature to crack down on staged auto accidents, make it harder for fraudulent medical clinics to operate, and provide more resources to law enforcement officials to pursue insurance fraud cases. However, the bills did not win passage, and there is a continuing recognition among some policymakers in Tallahassee that something must be done -- soon.

"We are hopeful that the Legislature will recognize the seriousness of this growing problem and the urgency to act, and will address staged accidents and fraud in the 2011 legislative session," Sclafani said.

On August 4, Florida Insurance Consumer Advocate Sean Shaw is hosting a day-long symposium on staged accidents, medical clinic fraud and Florida's emergence as the national epicenter of auto insurer fraud. Investigators who have been taking part in the Hillsborough County operations -- including those from Direct General -- will be taking part in the meeting.

"In addition to other issues surrounding PIP (Personal Injury Protection), I am concerned about the impact that PIP fraud has on Florida's auto insurance premiums, and I am looking for solid ideas from the roundtable participants on what actions should be taken to curb fraud in this area," Shaw said.

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 Florida No-Fault Auto Insurance and Cash Register Insurance brands through 100 affiliated retail storefronts statewide.

SOURCE Direct General Insurance Company