Fraud Bureau saw a 10% uptick in reports last year

The Delaware Department of Insurance made great strides in fraud detection and response during 2019. Throughout the year, 6 criminal arrests that included 21 charges were recommended from the Department’s Fraud Prevention Bureau to the Department of Justice, and 16 civil cases were brought forward resulting in more than $21,000 in fines. The Bureau received 551 referral cases in 2019.

“I want to commend our Fraud Prevention Bureau for their work identifying deceitful activity and helping to bring those who would defraud Delaware residents and companies to justice. Their efforts continue to send a strong message that fraud will not go unnoticed here, which can prevent future crimes,” said Commissioner Trinidad Navarro. “Through this work, we can help keep insurance premiums from rising by helping to make sure companies do not have to pay out fraudulent claims.”

Commissioner Navarro, who has a background in law enforcement, served as Vice-Chair of the National Association of Insurance Commissioners’ Antifraud Task Force over the last year and has championed fraud awareness and reporting. He was named Chair of the national Antifraud Task Force last week. The Department has experienced an increase reports over the past several years, with an approximate 23% increase since 2015.

In one prominent 2019 case, a resident was arrested after posing as family member who was terminally ill and facing imminent end-of life to open a life insurance policy. This was conducted through forgery of the family member’s identification, confirmation, and consent. After naming themself the sole beneficiary, the individual then attempted to collect $50,000 on the policy two days after the family member’s death. Charges included insurance fraud, identity theft, second-degree forgery, and crime against a vulnerable adult.

From identity theft to insurance healthcare fraud, hundreds of tips are investigated every year. In 2019, the most common schemes were seen through the application for auto insurance process, with individuals living outside the state attempting to save on premium costs by using Delaware addresses. Suspected to have risen due to possible economic factors, instances of application submissions occurring after an accident took place also grew. In addition to investigating tips from the public and insurance companies, the Bureau works with law enforcement in locating life insurance policies in death investigations.

The Fraud Prevention Bureau is fully funded by annual assessment fees, not taxpayer dollars, and employs 13 fulltime staff with extensive law enforcement and insurance investigative backgrounds and training, including credentials as Certified Fraud Specialists and Accredited Healthcare Fraud Investigators.

The Bureau facilitates the detection of insurance fraud and works to reduce fraud occurrence through enforcement and deterrence. Additionally, the Bureau requires restitution for deceptively obtained insurance benefits, and by doing so reduces the amount of premium dollars used to pay fraudulent claims, in turn decreasing the likelihood of premium increases.

The Delaware Department of Insurance Fraud Bureau can be reached toll free at (800) 632-5154, or (302) 672-7350, or by emailing fraud@delaware.gov. Reporting known or suspected fraud is free of charge and can be done confidentially.

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Delaware Commissioner selected from leaders across the country to head important consumer-focused committee

Delaware Insurance Commissioner Trinidad Navarro was appointed Chair of the National Association of Insurance Commissioner’s Antifraud Task Force this week. Commissioner Navarro previously served as Vice-Chair of the committee, and served in law enforcement for much of his career before his election to Insurance Commissioner in 2016. The committee’s work takes on an inclusive consumer protection approach that encompasses identification and reduction of criminal efforts both by and against consumers.

“From my experience as a law enforcement officer to today, I have always prioritized the protection of our residents, and that means being proactive as well as responsive,” said Commissioner Navarro. “Fraud impacts everyone – even if you aren’t the target of a scheme. When an organization takes advantage of a consumer, it hurts the public trust as well as the customer’s wallet. When a resident commits fraud and takes money from an insurer, the companies make themselves whole by increasing costs on policyholders, even though it’s not their fault. Solutions to the problem are important, but we need to focus on stopping fraud before it starts.”

The Task Force works with insurance regulators across the country, as well as local, state, federal and international law enforcement and antifraud organizations. As Chair, Commissioner Navarro will work to provide guidance and resources for insurance departments across the country and in the U.S. Territories, including tracking and analyzing trends in fraud, one of which is the rapidly changing cybersecurity environment.

“Methods of fraud are always evolving, and with more of our personal data being shared digitally than ever, there is no more important time to place serious emphasis on fraud prevention than now,” said Commissioner Navarro. “To be successful, we have to be clear that a vital piece of protecting our policyholders lies in protecting their data.”

Data, its collection, use, and misuse, has quickly risen as a key issue within the insurance community and the public at large. In 2019, multiple data breaches at insurers impacted more than 100,000 Delaware residents. Commissioner Navarro, with the help of the General Assembly, worked to make sure that Delaware passed the Insurance Data Security Act following these breaches, one of the first states to do so.

Protecting residents and policyholders is central to the Commissioner’s administration. The Department of Insurance Fraud Bureau investigates consumer complaints and inquiries, polices the conduct of carriers, agents, and brokers doing business in Delaware, and prosecutes insurance fraud amongst other duties. From 2015 to date, the Bureau has seen an approximate 23% increase in reports. The department has brought forward 37 civil cases, 54 criminal charges, 18 criminal arrests, and more than $47,400 in civil penalties since 2018. In the same time period, 1,100 fraud tips and referrals have been provided to the office.

The Delaware Department of Insurance Fraud Division can be reached toll free at (800) 632-5154, or (302) 672-7350, or by emailing fraud@delaware.gov. Reporting known or suspected fraud is free of charge, and can be done confidentially.

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Dover, DE   August 8, 2019 — A Wilmington woman was indicted by the New Castle County Grand Jury for insurance fraud and other felony charges. Theresa T. Milton, 44, of the 900 block of Clayton Street, was indicted on seven felony counts of insurance fraud, one felony count of theft by false pretense, and one count of falsifying business records. An Investigation by the Delaware Department of Insurance Fraud Prevention Bureau revealed that beginning on the 4^th day of May, 2017, and continuing through on or about the 28^th day of September, 2017, Theresa Milton submitted false claims for emergency medical services to Highmark BCBS of Delaware totaling slightly more than $16,000.  She had falsified invoices for out of network ambulance services and submitted claims for payment for those services to Highmark BCBS of Delaware.

Highmark became suspicious of one of the claims and made an inquiry to the ambulance service.  It was discovered that the claims appeared to be false, and the case was referred to the Department of Insurance Fraud Prevention Bureau for investigation.  The investigation substantiated the false claims with fictitious business records, and the indictment was issued.

Commissioner Trinidad Navarro stated, “The Fraud Unit of the Delaware Department of Insurance takes these cases seriously and actively investigates all reported cases of insurance fraud. We work closely with our partners at the Delaware Department of Justice to see these cases through, protecting consumers. A case such as this brings to light that insurance fraud costs everyone.”

If you suspect insurance fraud, you can report it by calling 302-674-7350, or email to fraud@delaware.gov.

The Delaware Department of Insurance protects Delawareans through regulation and education while providing oversight of the insurance industry to best serve the public.

Contact: Vince Ryan
Office: (302) 674-7303
Mobile: (302) 387-7670
Email: vince.ryan@sdelaware.gov

Dover, DE  – Dr. Jean Vertus Laine, 42, formerly of Peoples Wellness Center, 556 South DuPont Highway, Milford Delaware, was indicted on Monday, July 8th, 2019 by a Sussex County Grand Jury, following an investigation by the DOI Fraud Prevention Unit. The indictment alleges that between August and October of 2017,  Doctor Jean Laine fraudulently billed two insurance companies for treatments that were never performed, to include chiropractic manipulations and electronic stimulation. As of the time of this release, Dr. Laine has not been arrested.

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The Delaware Department of Insurance protects Delawareans through regulation and education while providing oversight of the insurance industry to best serve the public.

Contact:        Vince Ryan

Sr. Advisor to the Commissioner

Vince.ryan@delaware.gov

Office: 302.674.7303

Example Scam Letter April 2019

The Delaware Division of Revenue wants to alert citizens to a new taxpayer scam that is happening in Delaware. Victims may receive a letter from “The Bureau of Tax Enforcement” that threatens property seizure and wage garnishment unless they call a toll-free number to “avoid enforcement.”

“These scam mailings are designed to trick taxpayers into thinking they have received an official communication from the Division of Revenue,” warns Director Jennifer R. Hudson. The notices threaten the seizure of the taxpayer’s property if the recipient fails to make immediate payment. The scammers are accessing public records in order to include taxpayer-specific information on the notices to make them appear legitimate, and then using pressure tactics and fear to motivate the recipient into taking immediate action.

Taxpayers who think they may have received such a letter should contact the Division of Revenue at (302) 577-8200, option 3, with any questions. Taxpayers should also file a Consumer Complaint with the Delaware Department of Justice’s Consumer Protection Unit. Information about the complaint process is available at https://attorneygeneral.delaware.gov/fraud/cpu/ and the complaint form is available online – Consumer Complaint Form.