Just how easy is it to rip-off New York state's No Fault Insurance program?
Well listen to this Western New York man, who stole hundreds of thousands of dollars from the system through a ring that staged car accidents and then treated accident "victims" at a fake medical mill.
"If it's structured correctly, you send in a bill, they send you a check."
The scam operated for a number of years in the area before it was uncovered by federal and state authorities.
The ring leader, who we'll call Mike, agreed to talk to 2 On Your Side as long as we did not identify him.'
He spent 16 months in a federal prison and had to make restitution of $334,000.
It's estimated that insurance fraud of this type costs every single driver in New York an extra $100 a year on their policies.
Here's how the scam worked:
College students would be recruited at bars to be the victims of a car accident. Here's what they would be told:
"All you have to do is get in this car, we have a guy that's going to bump us in the back and you jump out and the police will be called and you say your neck hurts, and they fill out a police report and we'll get you in therapy," said FBI agent Bill Fallon.
Fallon was a member of the Western New York Health Care Fraud Task Force that helped break up the ring.
The "victims" would never claim anything specific like broken bones, because that would require x-rays.
Scott Brown: "So the easiest thing was to say it was a soft tissue injury and that way nobody could really tell whether it's there or not?"
"Mike": "It hurts and that's it."
Brown: "My back, my neck, something like that?"
Mike: "Correct."
Brown: "Let's say I'm one of the victims, what would I get paid by you?"
Mike: "A one time fee of $200 to $2,000."
Brown: "And for that I would have to show up for therapy or treatments a few times a week?"
Mike: "A few times a week until their (insurance) carrier cut them off."
The "victims" were also promised huge insurance settlements down the road for their supposed pain and suffering.
Their treatments took place at a medical mill on Main Street in Williamsville.
Who worked there?
Mike: "Professionals, medical professionals. From therapists to doctors to chiropractors."
Brown: "And they all had to be in on it right?"
Mike: "They were all after the same thing, money."
The "victims" of the staged accidents would go to the medical mill for therapy up to three times a week, the amount allowable under the No Fault law.
Brown: "Under state law, what are some of the treatments people would be eligible for?"
"Some of them are very exotic treatments- aroma therapy, acupuncture, massages, whirlpool sessions, physical therapy, it goes on and on and on," said Ed Silvestrini of the State Insurance Fraud Department.
Brown: "And all these services are covered until the No Fault law?"
Silvestrini: "That's correct."
Brown: "Would the therapists actually deliver therapy, or not even?"
Mike: "If he wasn't tired he would deliver the therapy, if he was tired, he would just sign the paperwork."
Brown: "Did the insurance companies not really check into whether people were actually getting treated and even had injuries?"
Mike: "No, all they'd ask for is documentation to be mailed, with a bill, and then a check comes back."
Brown: "So it was that simple?"
Mike: "The majority of the time."
And so, at the medical mill, you had fake patients being treated for fake injuries, sometimes by fake medical professionals.
The billing would go on for as long as six months, which was permissible under the No Fault law.
The mill was billing so much business that it eventually caught the eye of the Western New York Health Care Fraud Task Force, which is made up of law enforcement and the insurance industry.
Brown: "Why did you agree to do this interview?"
Mike: "Hopefully people will hear this, the legislature will hear this, and make changes."
Brown: "If you had the governor, or members of the New York state legislature here, what would you tell them about New York's No Fault system?"
Mike: "It needs to be cracked down, it's too easy to manipulate the system. You need to put stronger, more stringent policies on billing, therapy treatments and reimbursements."
Adds Ed Silvestrini of the State Insurance Department, "It's just too easy to commit fraud, No Fault fraud. Not only with regards to the medical, but to the lost wages, household care."
Brown: "What should be done about it?"
Silvestrini: "More enforcement of course. More documentation is needed to prove these expenses.
"We have people come in say 'I was a barber making 50 grand a year and now I can't cut hair,' but there's no income tax W-2s provided. I think it's just too easy to avail yourselves of the benefits when you're not entitled to them."
Well listen to this Western New York man, who stole hundreds of thousands of dollars from the system through a ring that staged car accidents and then treated accident "victims" at a fake medical mill.
"If it's structured correctly, you send in a bill, they send you a check."
The scam operated for a number of years in the area before it was uncovered by federal and state authorities.
The ring leader, who we'll call Mike, agreed to talk to 2 On Your Side as long as we did not identify him.'
He spent 16 months in a federal prison and had to make restitution of $334,000.
It's estimated that insurance fraud of this type costs every single driver in New York an extra $100 a year on their policies.
Here's how the scam worked:
College students would be recruited at bars to be the victims of a car accident. Here's what they would be told:
"All you have to do is get in this car, we have a guy that's going to bump us in the back and you jump out and the police will be called and you say your neck hurts, and they fill out a police report and we'll get you in therapy," said FBI agent Bill Fallon.
Fallon was a member of the Western New York Health Care Fraud Task Force that helped break up the ring.
The "victims" would never claim anything specific like broken bones, because that would require x-rays.
Scott Brown: "So the easiest thing was to say it was a soft tissue injury and that way nobody could really tell whether it's there or not?"
"Mike": "It hurts and that's it."
Brown: "My back, my neck, something like that?"
Mike: "Correct."
Brown: "Let's say I'm one of the victims, what would I get paid by you?"
Mike: "A one time fee of $200 to $2,000."
Brown: "And for that I would have to show up for therapy or treatments a few times a week?"
Mike: "A few times a week until their (insurance) carrier cut them off."
The "victims" were also promised huge insurance settlements down the road for their supposed pain and suffering.
Their treatments took place at a medical mill on Main Street in Williamsville.
Who worked there?
Mike: "Professionals, medical professionals. From therapists to doctors to chiropractors."
Brown: "And they all had to be in on it right?"
Mike: "They were all after the same thing, money."
The "victims" of the staged accidents would go to the medical mill for therapy up to three times a week, the amount allowable under the No Fault law.
Brown: "Under state law, what are some of the treatments people would be eligible for?"
"Some of them are very exotic treatments- aroma therapy, acupuncture, massages, whirlpool sessions, physical therapy, it goes on and on and on," said Ed Silvestrini of the State Insurance Fraud Department.
Brown: "And all these services are covered until the No Fault law?"
Silvestrini: "That's correct."
Brown: "Would the therapists actually deliver therapy, or not even?"
Mike: "If he wasn't tired he would deliver the therapy, if he was tired, he would just sign the paperwork."
Brown: "Did the insurance companies not really check into whether people were actually getting treated and even had injuries?"
Mike: "No, all they'd ask for is documentation to be mailed, with a bill, and then a check comes back."
Brown: "So it was that simple?"
Mike: "The majority of the time."
And so, at the medical mill, you had fake patients being treated for fake injuries, sometimes by fake medical professionals.
The billing would go on for as long as six months, which was permissible under the No Fault law.
The mill was billing so much business that it eventually caught the eye of the Western New York Health Care Fraud Task Force, which is made up of law enforcement and the insurance industry.
Brown: "Why did you agree to do this interview?"
Mike: "Hopefully people will hear this, the legislature will hear this, and make changes."
Brown: "If you had the governor, or members of the New York state legislature here, what would you tell them about New York's No Fault system?"
Mike: "It needs to be cracked down, it's too easy to manipulate the system. You need to put stronger, more stringent policies on billing, therapy treatments and reimbursements."
Adds Ed Silvestrini of the State Insurance Department, "It's just too easy to commit fraud, No Fault fraud. Not only with regards to the medical, but to the lost wages, household care."
Brown: "What should be done about it?"
Silvestrini: "More enforcement of course. More documentation is needed to prove these expenses.
"We have people come in say 'I was a barber making 50 grand a year and now I can't cut hair,' but there's no income tax W-2s provided. I think it's just too easy to avail yourselves of the benefits when you're not entitled to them."
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