Gov. Fights Insurance Fraud

Continuing his commitment to tackling insurance fraud in New Jersey, Governor James E. McGreevey Friday announced that the state is launching a civil action against a former chiropractor convicted of submitting hundreds of falsified insurance claims to collect over $2 million from 36 automobile and medical insurance companies.

“About 10 percent of the insurance bill of every New Jersey family goes to the cost of insurance fraud,” said Governor McGreevey, at a press conference where he was joined by Acting Attorney General Peter C. Harvey and Department of Banking and Insurance Commissioner Holly Bakke. “This is unfair to those who play by the rules -- and we have adopted a zero tolerance policy towards those who cheat the system.”

“Corruption in the form of insurance fraud is one of the reasons New Jersey's auto insurance rates are among the highest in the nation," said Acting Attorney General Harvey. "Today's actions place additional weapons in the arsenal to combat insurance fraud and represent a significant step forward in the battle to curtail insurance fraud. We are taking direct aim at corrupt schemes and will investigate, arrest, prosecute, and seek civil payment to recoup dollars illegally obtained through insurance fraud.”

“New Jersey can't be a place where some people save money by lying about how far they drive to work or whether there's a teenager driving the car,” said Commissioner Bakke. “If you lie to save a few dollars, someone else's insurance bill goes up. Under our proposal, auto insurance companies will have the unquestioned ability to cancel policies when they find this kind of fraud and those who get caught will find their next auto insurance policy costs a lot more.”

In addition to announcing the state’s action, Governor McGreevey called on the State Legislature to act swiftly to pass legislation providing more tools to fight insurance fraud. Specifically, he called for the creation of a new crime of “Insurance Fraud;” the establishment of a hotline and an “Insurance Fraud Detection Reward Program; increased fines for drivers without insurance identification cards; and the implementation of his proposal to impound the cars of those who drive without insurance.

“Clearly, we must do even more to protect New Jersey’s consumers,” said McGreevey. “I encourage the Legislature to act quickly to pass legislation consistent with my vision for reforming auto insurance: we must protect good drivers by rooting out fraud and abuse.”

The civil action seeks to impose a $5,000 penalty for each of the 478 patients for whom Daniel Fontanella admittedly falsified insurance claims and medical records. Fontanella is currently serving three years in New Jersey State Prison as a result of pleading guilty to charges of second-degree theft by deception. Civil penalties recovered, under the Insurance Fraud Prevention Act, are deposited in a fund administered by the Department of Banking and Insurance.

The criminal and civil enforcement actions against Fontanella stem from the joint investigative efforts of the Division of Criminal Justice’s Office of Insurance Fraud Prosecutor and the Passaic County Prosecutor’s Office. At the guilty plea hearing, Fontanella admitted falsifying chiropractic patient records and insurance billings in the amount of $2,264,190 submitted to 36 automobile and health insurance carriers involving 478 patients during a two year period from January, 1996 through December, 1997. Fontanella also admitted that approximately 45 percent of the insurance billings from his former chiropractic office located at 335 Union Boulevard in Totowa were false.

The Office of Insurance Fraud Prosecutor is aggressively fighting insurance fraud through the filing of civil law suits against individuals convicted of insurance fraud. The Office’s approach seeks to recoup funds illegally obtained by defendants who have defrauded insurance companies and maximizes the civil provisions of New Jersey’s insurance fraud statutes.

The Office of Insurance Fraud Prosecutor has realized a 143 percent increase in indictments filed, a 91 percent increase in defendants charged, a 79 percent increase in convictions (trial convictions and guilty pleas), and a 60 percent increase in civil sanctions in 2002. The Office of the Insurance Fraud Prosecutor charged 225 defendants in 2002, versus 118 defendants in 2001. Additionally, the Office of Insurance Fraud Prosecutor has imposed sanctions in 3,723 civil fraud cases in 2002, compared to 2,063 civil sanctions obtained in 2001. The Office of Insurance Fraud Prosecutor collected $20.6 million in penalties in 2002, up from $15.8 million last year.

Article continues below

---

advertisement

---

Author: Press Release-Micah Rasmussen