[Congressional Record Volume 141, Number 31 (Thursday, February 16, 1995)]
[Extensions of Remarks]
[Pages E360-E361]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                   1994 TOP 10 LIST OF INSURANCE FRAUD

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                           HON. ROBERT W. NEY

                                of ohio

                    in the house of representatives

                      Wednesday, February 15, 1995
  Mr. NEY. Mr. Speaker, I commend the following top 10 list of 
insurance fraud to my colleagues. However, before I proceed, I would 
like to thank the Coalition Against Insurance Fraud for their hard work 
and unwavering dedication in bringing insurance fraud to the public's 
attention.
  As a State senator and cochair of the Ohio Insurance Fraud Task 
Force, I was active in fighting fraud in Ohio. Insurance fraud cost 
American consumers more than $68 billion last year. That's more than 
$800 a year out of each family's pockets in higher insurance premiums.
  In order to give my colleagues a better understanding of the scope 
and breadth of insurance fraud, I submit the following ``1994 Top Ten'' 
list of insurance fraud cases in the United States.
                  1994 Top 10 List of Insurance Fraud

       1. Stable Slayings. Hired killers destroyed an unknown 
     number of show horses. Owners collected on insurance policies 
     which usually covered a horse for more than it was worth--
     $25,000 and up. The scheme had been going on for decades, and 
     some top names in the horse world are alleged to be involved. 
     Twenty-three people were indicted in Chicago in July for 
     their roles: 17 pled guilty, three were jailed and fined, and 
     six await trial.
       2. Minus One. Dr. John Rende, a 38 year-old Florida 
     dentist, agreed to allow two brothers, Kenneth and Robert 
     Alberton, to cut off a finger with an axe and claim it was an 
     accident. He collected a $1.3 million lump sum settlement 
     through one brother's homeowner policy. He also filed under 
     his practice's disability policy. Rende used some of the 
     money to buy a boat he named ``Minus One.'' Rende and the 
     Albertons pled guilty. All are in jail and under orders to 
     make restitution. Mary Rende, John's wife, is expected to 
     plead guilty soon.
       3. An Empire of Scams. William Loeb set up a phony labor 
     union to sell health insurance from Empire Blue Cross/Blue 
     Shield in 1988. When Empire terminated the insurance contract 
     two years later, the union moved the policies to bogus 
     insurers. More than 8,000 consumers lost $43 million in 
     premiums on worthless policies. Total unpaid claims could be 
     as much as $24 million. Insurers for more than 600 agents 
     named as defendants in the case have agreed to pay out more 
     than $8 million to settle unpaid claims. More settlements may 
     come in March. Loeb is serving seven years in jail.
       4. Coker's Coveted. Stephen D. Coker is on the run 
     following his September indictment in Alabama on 35 fraud-
     related counts. He's accused of siphoning at least $30 
     million in premiums, passing them through a network of 
     offshore insurers and reinsurers. Coker's accused of looting 
     a British Virgin Islands insurer via a sham reinsurance 
     agreement, filing false financial statements with regulators, 
     selling policies on behalf of bogus insurance companies run 
     by the late fraud artist Alan Teale, and reinsuring several 
     of Teale's own sham operations, taking in at least another $4 
     million.
       5. The Eye's on Him. Dr. Jeffrey J. Rutgard, a San Diego 
     eye surgeon, was indicted in March on 217 counts alleging he 
     bilked Medicare and private insurers out of millions of 
     dollars. He allegedly performed unnecessary operations on 
     mostly elderly patients who were often unable to give 
     informed consent. He was paid $20.8 million over five years.
       6. A Blue Bel-Aire. Arthur Blumeyer III was convicted of 27 
     counts of conspiracy, money laundering and fraud in February. 
     Blumeyer was accused of using St. Louis based Bel-Aire 
     Insurance Co. to bilk policy holders out of about $43.5 
     million over six years. He pocketed at least $4.9 million. 
     Blumeyer's conviction was overturned on a technicality and 
     he's currently in the insurance business awaiting a new 
     trial.
       7. Gypsy Truckers. Ronnie Lee Johnson of Fort Myers, 
     Florida, pled guilty to two felonies for his role in a multi-
     state insurance fraud case involving the diversion of at 
     least $7 million in premiums. The scammers obtained minimal 
     insurance policies by misrepresenting the firms as small ones 
     with only a handful of trucks. The operators then charged 
     hundreds of unwary independent truckers as much as $5,000 a 
     year to use fraudulently obtained liability insurance. 
     [[Page E361]] Johnson currently is serving a 46 month prison 
     term and cooperating with a expanded investigation.
       8. Senior Swindlers. Retired Floridians William and Phyllis 
     Lenahan were convicted of conning workers' compensation and 
     physicians' malpractice insurance for $3 million. William 
     claimed surgery for a work-related back injury was botched, 
     leaving him totally dependent on his wife. In an 
     investigation initiated and paid for by the surgeon, William 
     was videotaped dancing, among other activities. The two each 
     were sentenced to seven year prison terms and ordered in June 
     to pay $1.6 million in restitution.
       9. Chiropractic Couple. A Boston chiropractor, Dr. Alan 
     Rosenthal, and his wife, Caterina, were charged with 36 
     counts as part of a scheme worth an estimated $2 million. 
     They allegedly made false or inflated claims, subjected 
     clients to unnecessary tests, required a minimum number of 
     visits, and engaged in other conduct. Dr. Rosenthal and his 
     wife's trial is scheduled for February 13 in federal court.
       10. The Atlanta 57 and Counting. Georgia officials in 
     September arrested 57 people in two counties on 258 counts of 
     insurance fraud. Included in the arrests were two ``major 
     runners'' (those who refer patients in staged accidents) and 
     a chiropractor. At least 150 false or inflated claims were 
     filed with 15 insurers and costs more than $1 million. 
     Officials are continuing the investigation and more arrests 
     are expected.
     

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