In what may become an annual rite, Florida's Department of Financial Services Division of Insurance Fraud (DIF) conducted a statewide, three-day fraud sweep in late January. The operation, which stretched from Pensacola to Miami, drew upon staff at the various regional offices of the DIF and involved months-long investigations with millions of dollars in potential losses. Of the 84 individuals targeted for suspicion of various forms of insurance fraud, including health, life, auto, property and workers' compensation insurance, the teams succeeded in bringing charges against 62 of them. Twenty-one of these suspects were charged with workers' compensation insurance fraud.

"Insurance fraud causes real financial pain and hurts Florida's families, businesses, and communities," said Florida Chief Financial Officer Alex Sink, who oversees the state Department of Financial Services and initiated the January sweeps last year. "Criminals need to know that we will not tolerate insurance fraud of any kind and we will aggressively pursue those who commit fraud against innocent Floridians."

The sweep is an unabashed effort to draw attention to the problem. "The idea is that many of these cases would not draw attention singularly, but all together, they do," said FLDFS Spokesperson Nina Banister. "In this three-day sweep, we compiled one-tenth of our average annual arrest numbers for fraud." The DIF made more than 800 insurance fraud-related arrests in the last fiscal year.

Workers' compensation insurance fraud appears to be an equal opportunity employer. Banister said that about half of the cases are fraudulent injury claims by employees, and half are employers operating without proper coverage. For those who do not plead out -- the majority do, according to Banister, because cases are often backed up by hard-to-dispute surveillance -- charges are prosecuted by state attorney offices in the various jurisdictions. Florida's "speedy trial" statute dictates a trial in 180 days, although that requirement can be suspended by either party.

"Sentences depend on the severity of the fraud," Banister said. "In cases of employer fraud where employees have been seriously injured or died, employers frequently go to jail."

Banister noted that the DIF does not typically initiate activity in suspected fraud cases. "When workers' compensation fraud is suspected, it is usually the claims administrator's special investigations unit (SIU) that does the initial surveillance. Then they bring us the evidence. Florida Law requires that they report suspected fraud."

Even with the groundwork evidence provided by private SIUs, the DIF logs considerable hours doing its own follow-up investigations. "This recent sweep included a case where we were brought clear evidence that this gentleman had a prior injury relating to his current injury," Banister reported. "Still, our investigator logged 28 hours to get it to the point where he could be arrested."

The claimant, an employee of Rotti Construction in Jacksonville through a PEO arrangement with SouthEast Personnel Leasing, Inc., reported a work-related injury in May 2006, just a few months after he was hired. The worker said he injured his left leg, groin, and lower extremities when he was struck on the left leg by a wrench thrown at him by another employee. At a deposition in Feb. 2007, he reiterated his claims and denied prior injury to his leg.

Packard Claims Administration, Inc., handles claims administration for SouthEast. When Packard subpoenaed medical records, it discovered the employee had been involved in a similar accident in 1996. "He claimed not to remember the accident, even though files and medical reports revealed that in the earlier accident he had been airlifted by Trauma Flight Services to the University Medical Center in Jacksonville," said Deborah Eldridge, vice president of litigation management.

"Based on his deposition and the medical records, our adjuster sent the file over to RSight Investigations to see if it was appropriate to pursue," Eldridge said. RSight's surveillance documented the claimant "conducting activities in conflict of his stated medical condition," according to company president Steve Cassell, and DIF was notified. "We paid out quite a bit of money on this claim," Eldridge said. "Total medical, lost wages, and surveillance amounted to more than $40,000."

With the new evidence in hand, DIF, Packard, and SouthEast pulled off a legal "hat trick": In March 2007, Packard Claims denied the claim in its entirety. In June, the claimant's attorney dismissed his petition for benefits without prejudice. And in January, the state charged the claimant with workers' compensation fraud and perjury.

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