Fraud investigators at NYS Insurance Fund save state millions

By DEBORAH A. MILES

PEF members at the New York State

Insurance Fund (NYSIF) are key players in saving the state millions of dollars through programs targeting insurance fraud. In fact, during the last 12 years, NYSIF

saved New York state $183.1 million. “That money was saved because of the

actions of our investigators,” said Laurence LaPointe, NYSIF director of confidential investigations. “This is a significant savings and it helps the state economically.” LaPointe said the NYSIF provides a

level playing field and pursues policy holders who cheat on their premiums as well as claimants who cheat on their claims. “The guys who do

the investigations are top-notch. They do it all,” La Pointe said. “I couldn’t be happier with my staff. They are very high quality people and I’m proud to work with them.” PEF Division 240

member David Scharoun, a NYSIF senior investigator in Syracuse. “We also deal with policyholders.” Scharoun said these

are important cases because when a business owner is not paying his fair share of the workers’ compensation premiums, it’s very easy for him to undercut his competitors. “We worked very closely with the

“New York

state should

They spend time preparing for grand juries with witnesses and district attorneys. “The district

SCHAROUN

Council Leader Radhakrishna Mohan said the NYSIF investigators in the anti-fraud program have made 1,382 insurance fraud arrests, along with recoveries since 1995. Last year, they saved the state $16.6 million. “There is an abundance of talent in the

state work force,” Mohan said. “New York state should realize the strength and professionalism available among its own state workers. They are able to provide quality services, despite the hardships associated with the economic downturn.”

An inside look

“People have the perception the

division of confidential investigations focuses on just claimant cases,” said PEF

Page 14—The Communicator June 2010

realize the strength and professionalism available among its own state workers. They are able to provide quality

Internal Revenue Service (IRS) and the Environmental Protection Agency on a case where one of our policyholders said his business was comprised of a four-person messenger service in New York City. “He was actually

services, despite the hardships associated with the economic downturn.”

— PEF Division 240 Council Leader Radhakrishna Mohan

doing asbestos abatement in New York, Connecticut and Pennsylvania. He had 30 to 50 people on the job. He cheated the NYSIF out of $1.1 million,” Scharoun said. “When the dust settled on this one, we got the guy arrested and he is serving 46 months in

a federal penitentiary. He also owes the IRS $1.3 million. “This guy was able to take business

away from union jobs and he wasn’t paying any workers’ comp. That hurts the rest of the employers across the state. We go after employers who are not paying their fair share,” he said. The investigators work on

approximately 70 cases at a time. They are in daily communication with the people in the frauds bureau and follow up with law enforcement and prosecutors.

attorneys keep taking our cases because we are thorough. Most of the arrests here are made through the state police. When we bring them a case, the only thing they have to do is complete their arrest report,” Scharoun said.

Protecting policyholders

Curtis Brantley, an investigator in the

division’s New York City office, said the investigators also cover other fraud areas such as claimant, provider and certificate. “Certificates of

BRANTLEY

insurance are obtained from the workers’ compensation carrier to show proof of coverage. When we find certificates are fraudulent, it costs our policyholders thousands of dollars. That results in increased rates for

everyone who does business with the NYSIF and other entities in the state. “Sometimes we get information that

doesn’t support the allegations,” Brantley said. “It is our job to pursue all leads. Overall, we have been extremely successful in uncovering fraud committed against the NYSIF.” Scharoun said,” I work for the people

in New York state. It’s as simple as that. Elected officials come and go, the NYSIF will always be here. My loyalty is to the people I work for and the public.” Brantley added, ”Employers must

comply with the law. If compliance is not made, sooner or later we are going to catch up with you.”

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