A 4:00 a.m. on Oct. 10, 1997, 18 arrest teams, comprised of investigators from the Florida Division of Insurance Fraud and augmented by local officers, spread out through Miami-Dade County to apprehend 175 members of a staged automobile accident ring. The ring, which is believed to have staged hundreds of accidents, involved over 500 conspirators, including chiropractors and doctors, and made over $10 million in fraudulent claims.
Despite the size of this operation, it is truly only the tip of the iceberg. It is estimated that fraudulent insurance claims totaled a staggering $6.9 billion in the state of Florida alone in 1995.
Florida has taken a leading role in combating insurance fraud and is only one of 14 states to devote a specific agency to dealing with this problem. The Division of Insurance Fraud (DIF), originally formed in 1976, investigates all types of insurance fraud and related crimes, as well as criminal violations of the Florida Insurance Code.
Former U.S. Congressman Bill Nelson currently wears three hats as the elected head of the Office of the Treasurer, Insurance Commission, and Fire Marshal. The Florida Department of Insurance (DOl) is the primary administrative agency under Commissioner Nelson. The DIF and the Division of the State Fire Marshal are the two law enforcement agencies within the mostly civilian DOI.
Ron Poindexter, a 27-year law enforcement veteran, serves as director of the DIE The Division's top management also includes Assistant Director Mike Ross, who serves as general counsel, and Bureau Chief Jerry Stewart.
The state is divided into North, Central, and South Regions, each commanded by a captain. There are 14 squads, each headed by a lieutenant, located in field offices throughout the state. There are two resident agencies in Key West and Ocala. Investigators are generally assigned to work either general fraud or workers' compensation (We) fraud cases, or may be assigned to a specialized unit.
There are several specialized units within the DIF. In 1992, the Clime Intelligence Unit was created to assist investigators with background checks, provide tactical and strategic intelligence, etc. Most field offices are assigned an analyst, and eventually every squad should have its own analyst. The Insolvency Squad, based in Miami, investigates insurance companies which go bankrupt due to internal fraud perpetrated by owners and corporate officers. The Unauthorized Entities Unit in Tallahassee pursues both criminal and civil actions against insurance companies operating illegally in the state. The Professional and Organized Fraud Investigative Team (PROFIT) Squad, which operates out of Ft. Lauderdale, focuses on organized medical and health-care scams. The newly created 440 Strike Force, in the West Palm Beach Field Office (440 is the section of the Florida Statues dealing with WC), has already had success in arresting and prosecuting employers for WC premium fraud. The Special Operations and Training Section primarily handles in-service training and continuing education, and also manages special areas, such as disaster planning. The Internal Affairs section is located at head-quarters in Tallahasse.
Scope of Investigations
Most case referrals to the DIF involving suspected fraud come from the insurance industry. Other cases are referred to the DIF by other law enforcement agencies and some bein as tips from citizens. In fiscal year 1996/97, the DIF had 5,681 referrals or leads; 1,056 cases opened, 454 arrests; and 295 convictions (the highest in the nation for state fraud agencies). As of June 30, 1997, there were 1.390 active cases pending.
A large percentage of cases worked by DIF are claims fraud cases. Some arson-for-profit cases are jointly worked with the Division of the State Fire Marshal. Other types of cases involve life insurance fraud, liability insurance fraud workers' compensation fraud, as well as crimes committed by insurance companies an their employees, independent insurance agencies, and insurance agents. In terms of seer amount, however, health care fraud is the costliest of all types of insurance fraud. In 1995 health care fraud accounted for $59. 1 billion of the $$85.3 billion total cost of all types of insurance fraud in the United States. In Operation Moneybox, a recent investigation by the PROFIT Squad, it was found that at least 50 insurance companies were defrauded of over $5million from 3,000 fictitious medical claims.
Groups involved in insurance fraud have typically been decentralized and not highly organized. Recently, however, the DIF is encountering more cases involving organized criminal groups, due to the relative low-risk and high-profit potential involved in insurance fraud.
Qualifications, Training and Equipment
DIF investigators armed, sworn state law enforcement officers. Applicants for this position must have at least three years of sworn law enforcement experience, or two years of college. However, the majority of investigators have at least a bachelor's degree, as education and investigative experience are qualities sought by the DIF. Generally, applicant must be Florida-certified law enforcement officers.
Participation in in-service training and continuing education opportunities is encouraged. Every year, in the fall and winter, all sword personnel attend a week of annual training in Tallahassee. This training includes firearms qualification is held in the spring and summer.
All sworn personnel are issued un-marked, take-home vehicles which are equipped with undercover red and blue light and sirens. Depending on the region, vehicles are equipped with undercover red and blue lights and sirens. Depending on the region, vehicles are equipped with either 800MHz or low-band VHF radios with multi-agency communications capabilities. Investigators are issued Sig-Sauer P-228 or P-225 handguns, personal body armor, raid jackets, and other necessary equipment. All employees are issued a personal computer, and all sworn personnel have their own offices. All field offices have body wire and other surveillance equipment.
The Florida Division of Insurance Fraud is a diverse, progressive law enforcement agency and its "fraud cops" are among the most talented, educated, and dedicated in the law enforcement community. Though many local officers aren't aware this agency exists DIF investigators, are becoming more involved in multi-agency task forces are working hard at forging closer working relationships with other law enforcement agencies in their states.
J. Cameron Thurber, a former police officer, has been a law enforcement investigator with the Florida Division of Insurance Fraud in the West Palm Beach Field Office for over four years. He writes extensively on law enforcement issues.