[Congressional Record Volume 140, Number 20 (Tuesday, March 1, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                            INSURANCE FRAUD

                                 ______


                           HON. EARL POMEROY

                            of north dakota

                    in the house of representatives

                         Tuesday, March 1, 1994

  Mr. POMEROY. Mr. Speaker, I would like to bring to your attention 
accomplishments in the fight against insurance fraud and work that 
remains to be done. The Coalition Against Insurance Fraud is a group of 
consumers, Government agencies, and insurers dedicated to combating all 
forms of insurance fraud through public information and advocacy. I 
commend the coalition for its hard work against insurance fraud. The 
list of the top 10 fraud cases for 1993 has been unveiled and I would 
like to submit their press release for the Record.

   Top 10 Insurance Fraud Cases Unveiled by Coalition of Consumers, 
                  Government, Insurance Organizations

               Group Calls for Federal, State Initiatives

       Washington, DC.--Citing 10 of the most damaging insurance 
     fraud cases, a coalition of consumer groups, government 
     organizations and insurance companies called for federal and 
     state legislative initiatives to fight the costly and growing 
     national problem.
       The Coalition Against Insurance Fraud unveiled its annual 
     list of the top 10 fraud cases for 1993, ranging from 
     mundane, small scams to sophisticated operations involving 
     billion-dollar fraud rings. Some of the culprits come from 
     within the insurance industry; others are medical providers, 
     attorneys or professional con artists.
       ``These cases reflect the seriousness and diversity of 
     insurance fraud,'' said Dennis Jay, executive director of the 
     Coalition Against Insurance Fraud. ``There's an amazing array 
     of scams and rip-offs that continues to rob consumers of tens 
     of billions of dollars each year, and threaten the financial 
     integrity of the insurance system.''
       The coalition today called on state and federal lawmakers 
     to adopt a set of aggressive initiatives.
       Stephen Brobeck, executive director of the Consumer 
     Federation of America and a coalition co-chair, said the 
     federal government must address insurance fraud that leaves 
     insurers insolvent and consumers with unpaid claims. 
     ``Congress should approve legislation to criminalize the 
     looting and plundering of an insurance company from within,'' 
     he said. ``Additionally, federal statutes should deal swiftly 
     with those who escape detection by providing false financial 
     information to insurance regulators.''
       Adrian Tocklin, executive vice president of the Continental 
     Corporation and also a coalition co-chair, urged returning 
     state legislatures to consider a variety of measures to 
     combat fraud ``to put real teeth into their laws and send a 
     strong message that they, too, are fed up with this massive 
     rip-off,'' Tocklin said.
       Among the proposed measures to reduce fraud, Tocklin cited 
     a need for states to beef up their fraud fighting 
     capabilities and called for laws to automatically suspend the 
     licenses of doctors, lawyers and other convicted of insurance 
     fraud. Additionally, she said insurers should be required to 
     incorporate anti-fraud practices in their business 
     operations.
       The coalition's ``Top 10 Insurance Fraud Cases of 1993'' 
     are:
       (1) Alan Teale, who used a variety of insurance and 
     reinsurance operations to take in $72 million in premiums for 
     health, disability and business insurance from 5,500 
     policyholders, then refused to pay our claims. Teale, a 
     British citizen was based in Atlanta;
       (2) Norman Bramson, of Columbia, MD, built a complex web of 
     nearly 50 insurance companies and sold bogus medical 
     malpractice insurance to hundreds of physicians;
       (3) Michael and David Smushkevich, two brothers who 
     operated hundreds of medical clinics and mobile labs in 
     Southern California that offered free physicals to lure 
     patients, and then billed insurers thousands of dollars per 
     patient for serious medical problems. Their scams may have 
     bilked up to $1 billion from the insurance system;
       (4) National Medical Enterprises, based in Santa Monica, 
     CA, one of the nation's largest hospital chains, has been 
     charged with admitting thousands of patients to its 
     psychiatric hospitals who did not need hospitalization, then 
     treating them at inflated prices;
       (5) A network of 100 people in the New York City area led 
     by free-lance insurance adjusters, which conspired to bilk 
     insurance companies out of hundreds of millions of dollars 
     through inflated claims and staged accidents involving 
     commercial insurance;
       (6) The Kallao family, a roving band of criminals from Las 
     Vegas that staged a variety of ``slip and fall'' and auto 
     accidents in Illinois, Wisconsin and Ohio. Eight members of 
     the family have admitted to collecting $1 million in bogus 
     claims;
       (7) New Jersey ``ghostriders,'' involving 107 defendants--
     including alleged bus passengers, medical providers and 
     attorneys who got caught in a three-year sting by fraud 
     investigators who staged bus accidents and watched people hop 
     on and claim injuries;
       (8) First Assurance & Casualty Co., Ltd., an unlicensed 
     insurance company that sold insurance to small businesses in 
     inner-city Los Angeles, but failed to pay following the L.A. 
     riots;
       (9) Rubell Helm Insurance Services Inc., a California firm 
     that collected millions of dollars from small businesses to 
     set up ``self-funded'' health insurance programs, but 
     siphoned the money off into personal accounts, leaving $10 
     million in unpaid claims;
       (10) Gaven M. Cooke, using more than 24 aliases, claimed he 
     staged more than 200 fake accidents throughout the country 
     during his 20-year insurance fraud career. He boasted of his 
     exploits on national television talk show programs, and was 
     arrested in Colorado.
       The Coalition Against Insurance Fraud, which was launched 
     in July 1993 and is composed of 20 national organizations, 
     combats all forms of insurance fraud through public advocacy 
     and consumer education.

                          ____________________