In what may become an annual rite, Florida's Department ofFinancial Services Division of Insurance Fraud (DIF) conducted astatewide, three-day fraud sweep in late January. The operation,which stretched from Pensacola to Miami, drew upon staff at thevarious regional offices of the DIF and involved months-longinvestigations with millions of dollars in potential losses. Of the84 individuals targeted for suspicion of various forms of insurancefraud, including health, life, auto, property and workers'compensation insurance, the teams succeeded in bringing chargesagainst 62 of them. Twenty-one of these suspects were charged withworkers' compensation insurance fraud.

"Insurance fraud causes real financial pain and hurts Florida'sfamilies, businesses, and communities," said Florida ChiefFinancial Officer Alex Sink, who oversees the state Department ofFinancial Services and initiated the January sweeps last year."Criminals need to know that we will not tolerate insurance fraudof any kind and we will aggressively pursue those who commit fraudagainst innocent Floridians."

The sweep is an unabashed effort to draw attention to theproblem. "The idea is that many of these cases would not drawattention singularly, but all together, they do," said FLDFSSpokesperson Nina Banister. "In this three-day sweep, we compiledone-tenth of our average annual arrest numbers for fraud." The DIFmade more than 800 insurance fraud-related arrests in the lastfiscal year.

Workers' compensation insurance fraud appears to be an equalopportunity employer. Banister said that about half of the casesare fraudulent injury claims by employees, and half are employersoperating without proper coverage. For those who do not plead out-- the majority do, according to Banister, because cases are oftenbacked up by hard-to-dispute surveillance -- charges are prosecutedby state attorney offices in the various jurisdictions. Florida's"speedy trial" statute dictates a trial in 180 days, although thatrequirement can be suspended by either party.

"Sentences depend on the severity of the fraud," Banister said."In cases of employer fraud where employees have been seriouslyinjured or died, employers frequently go to jail."

Banister noted that the DIF does not typically initiate activityin suspected fraud cases. "When workers' compensation fraud issuspected, it is usually the claims administrator's specialinvestigations unit (SIU) that does the initial surveillance. Thenthey bring us the evidence. Florida Law requires that they reportsuspected fraud."

Even with the groundwork evidence provided by private SIUs, theDIF logs considerable hours doing its own follow-up investigations."This recent sweep included a case where we were brought clearevidence that this gentleman had a prior injury relating to hiscurrent injury," Banister reported. "Still, our investigator logged28 hours to get it to the point where he could be arrested."

The claimant, an employee of Rotti Construction in Jacksonvillethrough a PEO arrangement with SouthEast Personnel Leasing, Inc.,reported a work-related injury in May 2006, just a few months afterhe was hired. The worker said he injured his left leg, groin, andlower extremities when he was struck on the left leg by a wrenchthrown at him by another employee. At a deposition in Feb. 2007, hereiterated his claims and denied prior injury to his leg.

Packard Claims Administration, Inc., handles claimsadministration for SouthEast. When Packard subpoenaed medicalrecords, it discovered the employee had been involved in a similaraccident in 1996. "He claimed not to remember the accident, eventhough files and medical reports revealed that in the earlieraccident he had been airlifted by Trauma Flight Services to theUniversity Medical Center in Jacksonville," said Deborah Eldridge,vice president of litigation management.

"Based on his deposition and the medical records, our adjustersent the file over to RSight Investigations to see if it wasappropriate to pursue," Eldridge said. RSight's surveillancedocumented the claimant "conducting activities in conflict of hisstated medical condition," according to company president SteveCassell, and DIF was notified. "We paid out quite a bit of money onthis claim," Eldridge said. "Total medical, lost wages, andsurveillance amounted to more than $40,000."

With the new evidence in hand, DIF, Packard, and SouthEastpulled off a legal "hat trick": In March 2007, Packard Claimsdenied the claim in its entirety. In June, the claimant's attorneydismissed his petition for benefits without prejudice. And inJanuary, the state charged the claimant with workers' compensationfraud and perjury.