Extreme schemers reveal high costs of insurance scams in America; Swindles hit consumers for $80 billion a year, driving premiums higher.
WASHINGTON – Jan. 18, 2017 -Â America’s largest-ever no-fault auto whiplash crash scheme … a bungling arsonist who blew up much of his neighborhood (killing the couple next door) … a “caregiver” who starved a cerebral palsy victim to death while stealing Medicaid money … and a Miami doctor who falsely prescribed $60 million of powerful mental-illness medications for patients whether they needed them or not.
The swindlers who launched these and other extreme schemes have been named by the Coalition Against Insurance Fraud to the Insurance Fraud Hall of Shame as the “eight worst insurance criminals of 2016.”
The Hall of Shame highlights the year’s most brazen, bungling or vicious convicted insurance swindlers. The “2016 Hall of Shame” is available online at http://www.insurancefraud.org/hall-of-shame.htm.
Many insurers see evidence that insurance fraud is growing, said Dennis Jay, executive director of the Coalition.
“One of America’s largest financial crimes, insurance fraud steals at least $80 billion annually. Too many Americans tolerate fraud and are at risk of committing this crime,” Jay said. “Innocent people are traumatized, maimed and lose their savings. Some die. Consumers everywhere pay higher premiums. Insurance cheats need to know they’ll be found and prosecuted.”
The insurance swindles highlighted in the Coalition’s 2016 list are:
BURNING DOWN THE NEIGHBORHOOD (Indianapolis). Did an arson fire or drone strike wreck the neighborhood in a tree-lined Indianapolis neighborhood? Hard to tell the difference after Bob Leonard helped open a natural gas line inside the home. He wanted to trigger an arson blaze for a false $300,000 insurance claim. His half-brother Mark and live-in girlfriend planned to make the fraudulent insurance claim. They blew up much of the neighborhood, killing two next door neighbors.
WHIPLASH FACTORY (New York City). Michael Danilovich viewed auto insurers as his personal pinatas. The New York man staged hundreds car crashes. He helped mastermind the largest no-fault looting of insurers from setup car wrecks in U.S. history. It was a behemoth $279-million binge of false whiplash insurance claims throughout the New York City area. Small wonder that honest New York drivers pay some of the highest auto premiums in the U.S. – crash rings steal hundreds of millions from insurers in New York. The insurance-fraud losses get passed on.Â
LAWLESS LIBIDO (San Francisco). John Alfonzo Smiley turned a night of sex frolicking into a dodgy workers-compensation claim. Then fraud investigators exposed the prison guard’s X-rated exploits and sent him to jail for insurance fraud. Smiley was shot and paralyzed from the waist down when he and his wife left a San Francisco swingers club after dinner, he told investigators. Smiley said he was shot by a former inmate. That was a lie.
BAMBI MEETS MOB (Philadelphia). Bloody deer parts and dozens of setup car crashes (some involving deer-blood-soaked and sledgehammer damages) were the heart of Ronald Galati’s $5-million soaking of auto insurers with inflated car repair bills.Â And in mob style, he nearly had a witness shot. Galati ran a network of corrupt insurance adjusters, tow-truck drivers and a Philadelphia police officer, plus his own repair customers. He was an associate of Philadelphia mobsters, even employing the wife of a reputed mobster.
BAD SAMARITAN (Portland, OR). Shannon Egeland claimed to have stopped to help a pregnant woman stranded on a roadside late one summer night near Caldwell, Idaho. It was an ambush. Someone snuck up and shot him, shattering his legs and forcing surgeons to amputate his left foot. Or so the former Idaho developer told his disability insurer. It turned out to be a plot involving his son, who shot him in order to defraud an insurance company. (Note: This scam occurred in Idaho and the related conviction was in Oregon).
BABY MURDERED (Washington DC). Moussa Sissoko seemed to care deeply about his infant boy, Shane, even giving up college to share parenting in suburban Washington, D.C. In truth, Sissoko cared so much that he bought a $750,000 life-insurance policy on Shane and murdered him soon afterward.
KILLER CAREGIVER (Dayton, OH). A 14-year-old cerebral palsy victim was allowed to starve to death, reduced to a 28-pound skeleton. She had open bedsores and her diaper wasn’t changed. Her hair was infested with lice. Mollie Parsons, the “caregiver” of Makayla, collected Medicaid checks while the teen was left to die.
MENTAL ERROR (Miami). Mental illness made Dr. Fernando Mendez-Villamil rich and taxpayers that much poorer. The Miami psychiatrist spooned out epidemic levels of unneeded antipsychotic drugs to seniors in Medicare and lower-income people in Medicaid -Â $60 million in false claims. Mendez-Villamil became a national icon of overprescribing. He peddled nearly 97,000 scripts for powerful drugs to Medicaid patients between 2007 and 2009 — more mental-health meds then doled out by any other doctor in Florida.
ABOUT THE COALITION
The Coalition Against Insurance Fraud is a national nonprofit alliance of more than 150 organizations representing consumers, government agencies, insurers and other businesses. Founded in 1993, the Coalition combats all forms of insurance fraud through legislation, consumer education and research.