Meet the latest members of the 2021 Insurance Fraud Hall of Shame
These fraudsters performed unneeded surgeries, sold black market drugs and stole millions from unsuspecting pregnant women.
Insurance fraudsters think they are too clever to be caught, however, these entrants into the Insurance Fraud Hall of Shame as determined by the Coalition Against Insurance Fraud will quickly dispel that thought. These miscreants were notable not for their ingenuity, but for the nefarious choices they made to swindle insurers out of millions of dollars. You can meet the fraudsters from Part 1 of this series here.
Mutilating women for money. Dr. Javaid Perwaiz inflicted his scalpel on trusting patients, completing unneeded and life-changing hysterectomies, sterilizations and other invasive surgeries in what was a $20.8-million looting of private and public health insurers.
The Norfolk, Va. gynecologist forced the hysterectomies on at least 17 healthy patients after convincing the women they urgently needed the surgeries.
He warned one patient that cancer was imminent, lying she needed a total hysterectomy as a cancer preventive. The patient decided to have her ovaries removed instead. Yet she awoke in recovery, discovering Perwaiz had performed a total abdominal hysterectomy. He also perforated her bladder. She became infected and was hospitalized for six days.
Another patient Perwaiz treated for pregnancy problems found he’d removed her fallopian tubes without her permission — making natural conception impossible.
Pressuring other women to have permanent sterilizations, Perwaiz lied that the procedures were easily reversed. He altered sterilization consent forms to seemingly confirm the women’s decisions.
Perwaiz induced early labor on at least 33 pregnant women for no medical reason as well. Inducing labor let Perwaiz deliver the babies on days he worked at the hospital to ensure he would be the one to claim the insurance billings.
He was so busy operating on women that his staff had difficulty keeping up as he literally ran from procedure to procedure. He even billed health insurers for many costly procedures he never bothered performing.
Perwaiz was handed 59 years in federal prison. The Virginia AG provided substantial assistance in the case.
Compound cream scheme. An unassuming pharmacy was the hyper-sonic hub of an attempted $510-million rifling of insurers with claims for tubes of gloppy, overpriced and often worthless compound creams, plus unneeded vitamin pills.
Wade Walters marshaled the con from his pharmacy in Hattiesburg, Miss. Walters especially preyed on hundreds of young service members covered by the military health insurer Tricare. His crime ring hawked expensive creams supposedly to relieve pain and scars. The pharmacy mixed up tubes of compound goop often without meeting patients or determining if they needed the medicines.
Insurance money poured in so easily that Walters’ ring quickly expanded into a national network of corrupt doctors, pharmacies, patient recruiters and others. They rigged prescriptions to ensure the highest insurance payouts, often using stolen patient IDs.
Leslie Cook reacted severely to a compound vitamin pill she took. “It felt like I was vomiting blood,” said Cook. She was paralyzed and couldn’t speak when searing pain overtook her. Cook was alone at home for hours until her husband arrived and rushed her to the hospital.
Walters’ ring stole so much insurance money that Tricare had to cut back its healthcare programs for needy vets, and ask the feds for more money. Walters received 18 years in federal prison and must repay more than $287 million.
Pregnancy pilfering. More than 250 pregnant women from Mexico thought they bought low-cost private health coverage, allowing them to safely give birth in the U.S.
The women were innocent pawns in a $1.5-million insurance plot that stole their money and jeopardized their U.S. visas. Melissa Alvarez Torres and Jose Luis Olmos Hernandez ran the scam.
The San Diego-area duo advertised bogus maternity coverage on Facebook under the name Seguros Americanos Embarazo (American Pregnancy Insurance). Alvarez and Hernandez lied to the women that their supposed insurance would allow them to legally give birth in the U.S. while covering the costs of the procedures.
Many women sought coverage from the sham insurer because they had high-risk pregnancies and thought U.S. hospitals were safer.
Torres and Hernandez secretly signed up hundreds of women for Medi-Cal instead of their supposed private maternity plan. They lied that the women were California residents.
The couple used the fraudulent Facebook ads to collect personal data from the expectant mothers to further the couple’s scheme. Torres and Hernandez also forged tax and employment documents, including supporting letters from fake U.S. employers.
In truth, the women weren’t eligible for Medi-Cal. They weren’t California residents. They were Mexican citizens with U.S. work and tourist visas.
Torres and Hernandez also stole money the women could scarcely afford — charging them up to $3,000 for fake premiums. The illegal plot jeopardized the unwitting women’s U.S. visas as well.
Torres and Hernandez each face up to 20 years in federal prison when sentenced, and they must repay $1.5 million.
Black market Pharmageddon. Joshua Ryan Joles ran a thriving black market drug ring that hauled in $78 million by reselling stolen medications at high-profit markups. Life-giving drugs for HIV, cancer and psychiatric illnesses were his stock in trade.
Joles ran a wholesale drug company in the Miami area. It was the hub of his fast-spreading scam. His ring acquired the expensive drugs through healthcare fraud, theft and burglary. Joles even convinced Medicare and Medicaid patients who filled their prescriptions at discounted prices to sell their medication back to his network for a little extra spending money.
Ring members picked up boxes of black-market drugs by the hundreds in random parking lots or streets across South Florida. They “cleaned” the drug bottles with lighter fluid and other chemicals. They removed the labels, glue and any trace of the prescriptions or prior owners.
Some drugs were past their expiration dates and were inaccurately re-labeled and stored in unsafe conditions before being resold to unwitting retail pharmacies and consumers. Victim consumers had no idea their health was imperiled by unknowingly taking the drugs. The medications were often mass-produced instead of being custom-mixed for each patient’s medical needs, as the pharmacies claimed.
Money was good, so Joles’ illegal drug traffic spread fast. His network soon spanned the U.S., involving businesses in Florida, Arizona, Delaware, Washington and Puerto Rico.
Joles sold his drugs to the unwitting retail pharmacies and consumers as quickly as his staff could repackage the goods. His prices were below legitimate wholesale market prices — though not so low to appear suspicious. Even at those low price points, Joles’ profits were lucrative.
Some 78 months in federal prison await Joles and he is the final inductee into the 2021 Insurance Fraud Hall of Shame.
For the past 20 years, the Coalition set aside time to review the most heinous insurance fraud crimes and convictions. The Hall of Shame is intended to highlight the damage caused by insurance fraud which is often regarded as a “victimless crime.” Insurance fraud causes tens of billions of dollars in economic damage annually, but it is important to remember that it also destroys the lives of both the victims and the perpetrators.
Editor’s Note: This is Part 2 of a two-part series highlighting the latest members of the infamous Insurance Fraud Hall of Shame.
Arinze Ifekauche (arinze@insurancefraud.org) is the director of communications for the Coalition Against Insurance Fraud. For more information visit www.InsuranceFraud.org.
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