This past year, Hawaiian residents observed gorgeous sunsets, a temperate climate, and something far less appealing: a wave of auto insurance-related fraud. In fact, the Insurance Fraud Investigation Unit of the State Department of Commerce and Consumer Affairs (Fraud Unit) experienced a 61 percent increase in criminal convictions for motor vehicle insurance fraud in 2008 over the previous year. Convictions rose from 18 in 2006 to 34 in 2007, and 55 in 2008.
Among the barrage were cases involving a Big Island resident, a body shop owner, and a career criminal. Authorities investigated Beverly Medeiros for five separate cases. The Pahoa, Hawaii resident had claimed that she was unable to work because of injuries resulting from an auto accident. Medeiros created fictitious employers and used a post office box address to intercept all related correspondence. Records indicate that she defrauded three separate insurance companies.
In January 2008, Medeiros' luck ran out. The court ordered the Big Island resident to serve 30 days in jail, pay restitution totaling more than $103,000, and $1,380.00 in court fees.
In a separate case, Body Shop Owner Bryan Hong pleaded "no contest" to defrauding an insurance company and was thereby granted a deferral. In October 2008, the court ordered Hong to pay nearly $4,000 in restitution for safety and structural repairs for which he charged O'Sung Auto Body -- a customer -- but never performed. In addition to restitution, Hong must pay a $1,500 fine and complete a five-year probationary period.
Another Aloha State resident, Noelani Delizo obtained insurance coverage after she was involved in a three-car accident. Delizo then reported a false date of accident in a flimsy attempt to have her insurer cover the damages. In November 2008, the court ordered Delizo to not only serve a five-year prison term for attempting to obtain fraudulent insurance benefits but also shell out $500 in restitution to the accident victims.
Insurance fraud affects everyone by inflating the cost of insurance. The state estimates that this type of fraud costs each household in Hawaii an additional $200 to $300 in increased premiums each year.
Interested in more fraud news and in-depth articles? Head over to Claims' fraud channel for more information.
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