Operation Sledgehammer, now in its sixth chapter, has put more Personal Injury Protection (PIP) fraudsters behind bars and fined them millions of dollars. A massive effort by federal, state, local and private investigators is paying big dividends; this type of action should be commended and receive regular funding from public and private sources.
Between June 2011 and now, 92 defendants have been charged for their participation auto insurance fraud. Federal prosecutors have charged 56 of them and won more than $5 million. The Palm Beach County State Attorney’s Office has charged the other 36.
Here are the results Operation Sledgehammer VI, according to an FBI announcement:
- Elias Sebastian Munguia — 102 months in prison, three years of supervised release, restitution of $3.49 million
- Aleida Capdevila — 53 months in prison, three years of supervised release, restitution of $1,04 million
- Yenisleydi Ramos — 50 months in prison, three years of supervised release, restitution of $1.67 million
- Juan Francisco Avon — 38 months in prison, three years of supervised release, restitution of $$866,801
- Oscar Montiel Martinez — 76 months in prison, three years of supervised release, restitution of $1.36 million
- Teresita Mena — 66 months in prison, three years of supervised release, restitution of $1.32 million
The defendants pleaded guilty to a number of charges related to mail fraud and money laundering. Here’s how the criminals operated, according to the FBI:
Between approximately October 2006 and December 2012, the conspiracy members staged automobile accidents by recruiting individuals to participate in the accidents. Martinez and Mena served as accident participants and Martinez and Contino recruited others to participate in staged accidents. The participants were referred to as “Perro” and “Perra” or “Macho” and “Hembra.” “Perro” is Spanish for dog and “Hembra” is female.
Clinic owners, including Munguia, submitted false insurance claims through chiropractic clinics that were controlled by members of the conspiracy. The true owners of the chiropractic clinics, including Munguia, recruited individuals who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics.
The co-conspirators also hired licensed chiropractors and licensed chiropractic physicians’ assistants, including Avon, who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Those employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services.
The FBI says that 21 clinics participated in this scheme. Munguia was the “true owner” of three of those clinics. Munguia’s aunt, Aleida Capdevila, served as the office manager of two.
Once fraud proceeds were received from the insurance companies, the clinic owners, including Munguia and Capdevila, also recruited individuals, including Martinez, Ramos, and Mena, to help the clinics launder the insurance proceeds.
The U.S. Attorney’s office in Miami thanked the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force “for their outstanding work in this case.” The office also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance.