Each year, the Coalition Against Insurance Fraud releases the newest Insurance Fraud Hall of Shame inductees, the worst of the worst in insurance fraud scams, and 2020 has not been spared (why would it be?). The list serves as a deterrent, a conduit to bring awareness to the $80 BILLION per year impact on all of our pockets, and also to demonstrate that these crimes are certainly not victimless.
Here we share the 10 newest inductees for 2020 according to Kendra Smith of the Coalition Against Insurance Fraud:
1. “Binge burning, false flooding wreck homes in Texas”
Patrick Wayne Bronnon of Port Arthur, Texas ran a $1.7 million insurance fraud scheme with 40 recruits by purchasing, torching, flooding, and “burglarizing” old homes after taking out large insurance policies.
Here are multiple examples of Bronnon’s indiscretions according to the Coalition Against Insurance Fraud:
“After Bronnon’s flaming match lit up one home, the straw owner lied she was frying pork chops. She suddenly had chest pain, went to the hospital and forgot about the pork chops. The frying meat ignited and finished off the home, she lied to her insurer.”
“Foil-wrapped chicken cooking in a microwave supposedly ignited when another owner left and forgot about the chicken. A faulty hotplate purportedly caused yet another fire.”
“Bronnon broke the water pipe of another home, flooding the place. His stooge homeowner claimed the pipe accidentally burst. Bronnon then lied that thieves stole more than $29,000 of possessions while the water-soaked house was being repaired. Fake furniture, construction materials, tools, an air conditioner unit, appliances, cabinets and personal items were falsely claimed as stolen.”
“Bogus burglaries also brought in stolen insurance money. Someone entered a home through the garage while out, an “owner” told his insurer. The burglar stole more than $80,000 of personal belongings, including high-end clothes and electronics. Yet many were the same possessions that ring members claimed in other setup burglaries.”
Bronnon was sentenced to 78 months in federal prison, but did not serve his full jail term, as he died in summer 2020.
2. “Sham Navy SEAL fakes combat heroics to steal disability”
Richard Meleski of Chalfont, PA provided explicitly detailed combat heroics as a Navy SEAL in Beirut, Lebanon to insurers to fraudulently collect over $300,000 of federal veteran medical benefits, as well as monthly disability checks.
Here are some of Meleski’s claims when submitting his application for benefits according to the Coalition Against Insurance Fraud:
Meleski wrote, “18 hr hostile takeover. Became POW, during this tour. Beaten, shot, head injury, tortured. Hospitalized in Germany for injuries sustained. Crushed hand. Shrapnel.”
“Meleski claimed post-traumatic stress disorder and wounds he supposedly incurred while fighting terrorists in the 1980s.”
“He injured his left knee jumping out of a window while carrying a dead SEAL comrade on his back, he said. He also suffered a serious brain injury when he jumped through the window. The ordeal was so traumatic that Meleski couldn’t speak for three months though he did earn the Silver Star medal for gallantry in combat, he insisted.”
“Meleski’s disability claim included the obituaries of real Navy SEALs he falsely claimed he served with.”
Turns out, Meleski never served in the military at all, and he was living in New Jersey when he was allegedly serving in combat in Beirut, Lebanon. The term is “Stolen Valor,” when an individual creates/embellishes military service. However, Meleski tacked on fraudulent disability, as well.
According to the Coalition Against Insurance Fraud, “As a seeming former POW supposedly suffering from PTSD, Meleski was given priority for medical treatment over real veterans who urgently needed healthcare for their own military injuries. He received free treatment with no copays or premiums while true vets waited in line.”
These aren’t Meleski’s only discretions. He was also convicted of arson 4 times, one of which entailed him setting fire to a home “where a priest and nuns devoted their lives to solitary prayer,” and was sentenced to 19 years total in prison.
Meleski is now facing up to 68 years in federal prison at sentencing.
3. “Sex, relapse and fraud in unsober sober homes”
Christopher Bathum built his own network of sober living homes in the Los Angeles, CA area under the business name of Community Recovery, and reassured thousands of his drug and alcohol-addicted residents that they were in good hands. Instead, Bathum used and abused (literally) his residents in an attempt to collect $175 million in fraudulent insurance billing.
Bathum sexually assaulted at least seven of his women patients, encouraged relapses, provided and took drugs with his patients, taught patients how to beat drug tests, secretly purchased multiple health policies for patients to increase fraudulent insurance billings to include rehab that was never provided, charging insurers after patients left treatment, and inflated claims for both real and fake urine testing.
Additionally, Bathum also traded sex with female patients so they could have internships, company cars, and iPhones.
Out of the $175 million billed, Bathum received $44 million. What is remarkable however, is that Bathum had absolutely no medical qualifications or credentials. According to The Coalition Against Insurance Fraud, he “invented his credentials as a psychotherapist” and “he even wrote a widely read psychotherapy book.” Prior to getting into the business, he was a pool cleaner, and had a serious meth and heroin addiction. “He overdosed in a hotel room while shooting drugs with his own patients,” stated the Coalition.
Bathum was ultimately sentenced to 53 years in state prison for sexual assault and 20 years for the insurance scheme.
4. “Wired: Insurance mogul’s bribery plot short-circuits”
Greg Lindberg, a self-made North Carolina billionaire, made his money in insurance and investments, then made a brazen and brash move in attempting to bribe the North Carolina’s insurance commissioner, Mike Causey, while under regulatory pressure. Bad move.
Here’s how it went down according to the Coalition Against Insurance Fraud:
“Lindberg bought more than 100 insurance companies. He diverted $2 billion from his life insurers to prop up other businesses in the form of loans. The profligate self-dealing stretched his life insurers thin, jeopardizing their ability to pay claims.”
"Causey imposed strict limits on Lindberg’s loans, yet the insurance magnate often exceeded the limits. Causey also placed several struggling insurers into receivership.”
“Lindberg wanted to ease Causey’s regulatory pressure. Lindberg also was one of the largest political donors in North Carolina. So he sought to bribe Causey with $2 million of campaign reelection ‘contributions’ to replace a troublesome deputy who oversaw his Global Bankers Insurance Group. It was a conglomerate of insurers Lindberg had acquired. Lindberg wanted to install his own compliant employee in the deputy’s position.”
“Causey went straight to the FBI. He wore an FBI wire to record bribery efforts by Lindberg and several associates.”
Lindberg was convicted of the bribery attempt and was sentenced in August 2020 to more than seven years in federal prison. Several of Lindberg’s associates were also convicted.
5. “Caregiver starves disabled man in Medicare con”
Carl DeBrodie, a Kansas City, MO-area man, was born with a severe developmental disability, was living in a facility, and was “cared for” by Sherry Paulo, manager of Second Chance Homes.
According to the Coalition Against Insurance Fraud, “Paulo supposedly cared for developmentally disabled residents and oversaw day-to-day operations. She was responsible for motoring Carl to medical appointments, and making sure he took the vital meal supplements and medicines his doctor prescribed.”
However, Paulo starved Carl, denied him his medications, stopped taking him to his doctor appointments, forged medical and Second Chance records to hide the abuse, and even went as far as moving him into her home basement, which was unfinished with no running water, sunlight, or fresh air, to avoid investigators who may have discovered him.
During this time, Paulo continued to fraudulently bill Medicaid approximately $107,000 for caregiving that Carl, heartbreakingly, never received.
The Coalition Against Insurance Fraud stated that, “Carl finally suffered an acute medical emergency in Paulo’s squalid basement. He stopped breathing. Paulo was worried she’d be blamed for his malnourishment and death, so she let Carl die even though she knew CPR,” and “Paulo kept Carl’s remains in a bathtub for several days. She finally placed him in a trash can, filled it with concrete and drove his body to the storage shed.”
Paulo was sentenced to 17.5 years in federal prison and is set to pay Medicaid $107,000 in restitution.
6. “Arthritis anxiety: Patients falsely diagnosed, treated”
Dr. Jorge Zamora-Quezada of Mission, TX collected approximately $325 million in fraudulent insurance billings by falsely diagnosing a large number of his seemingly healthy patients with arthritis and subjecting them to unnecessary, painful, and toxic chemotherapy treatments.
According to the Coalition Against Insurance Fraud, this is what Zamora-Quezada’s patients endured:
“Many patients, including one as young as 13, suffered physical and emotional damage from the chemo and sometimes hours-long intravenous infusions. The invasive procedures could last for years.”
“Zamora-Quezada falsely diagnosed one man with rheumatoid arthritis and started treating him. The patient later developed burns on his skin, lost his fingernails and toenails, and later began to lose his skin from the toxic medicines. Another arthritis doctor said the patient didn’t have arthritis and took him off the medicine. Too late; his health problems kept advancing until his death.”
“Another patient was told he had rheumatoid arthritis. That person was ‘subjected to extensive medical procedures and chemotherapy treatments and other medications…(his) skin changed to a grayish color, he gained nearly 100 pounds of body weight, became depressed, and experienced pain,’ a federal complaint says.”
Zamora-Quezada also kicked patients out of his practice if they questioned the treatments, and forged and hid patient records in an unsecured/rundown barn when they went to other doctors.
Furthermore, with all of the fraudulent insurance money, Zamora-Quezada purchased a private jet, luxury properties in Aspen, CO and other “rich” locations, a Maserati, and more.
Zamora-Quezada is currently awaiting federal sentencing.
7. “Beauty surgery glam scam exposed as skin-deep”
David Morrow, a wealthy Rancho Mirage, CA celebrity cosmetic surgeon, promised his patients that insurance would cover the cost of their nose jobs, tummy tucks, and breast lifts. But how? Insurance companies typically don’t cover glam-boosting, elective surgeries.
Morrow disguised the surgeries as medically necessary with forged diagnoses such as deviated septums, hernia repairs, abdominal rebuilds, and tuberous breast deformities. He billed insurers $50 million, ultimately collecting approximately $25 million.
Here’s how he did it, according to the Coalition Against Insurance Fraud:
“Some patients were pressured to get surgeries they didn’t want in exchange for ‘free’ cosmetic upgrades. Patients still believed Morrow played by the rules, giving them honest surgery and lodging honest insurance billings.”
“Morrow also dummied up test results, medical notes and surgical records to back his surgical fantasy world. In one case, he covered up the text of records for a patient’s ‘abdominoplasty’ (tummy tuck) — hand-writing ‘umbilical & ventral hernias’ on top of the original wording.”
“Morrow billed insurers up to $150,750 for a single cosmetic surgery, and as much as $700,000 if he foisted several procedures on a patient. Sadly for some patients, he botched their procedures. They ended up disfigured or were forced to live with pain and discomfort.”
“Insurers also were billed for fake surgeries. Morrow stole patient names, medical information and signatures — their medical identities — and invented records that falsely claimed successful surgeries the patients medically needed.”
Upon facing trial, Morrow and his wife left the country and went into hiding in Israel. Morrow was sentenced to 20 years in prison, and Israel extradited him and his wife back to the United States in 2020. Morrow is currently in prison serving his sentence.
8. “Rapper’s death riff: Son has mother shot for life insurance”
Oaw’mane Wilson, a young Chicago rapper going by the name “Young QC,” wanted nothing but fame and fortune and would stop at nothing to get it. His biggest fan, his own mother, Yolanda, “showered love and attention on her only child. She bought him a Ford Mustang, jewelry, and designer clothes, and even helped him find steady work,” stated the Coalition Against Insurance Fraud.
However, no matter how much Yolanda spoiled her son, she was worth more dead than alive. Wilson hired Eugene Spencer to shoot his mother so he could collect approximately $90,000 in life insurance and her savings.
According to the Coalition Against Insurance Fraud, “Spencer and Wilson’s girlfriend drove to Yolanda’s apartment; he shot Yolanda as she slept in her bed. ‘Make sure the b— is dead,’ Wilson told him in a cell call. So Spencer returned and stabbed Yolanda.”
Wilson then quickly withdrew $20,000 from a bank account, tossed wads of money in the air to squealing fans outside of a shopping center, and showed off new expensive items to include puppies he purchased for $1,500, an Air Jordan collection, guns, marijuana, gold chains, etc. Wilson then also filmed a new rap video on YouTube, started a new YouTube show called “The Nick Story,” and continued to flaunt his Mustang and watches in selfies and videos.
His newfound money and expensive tastes were intoxicating. Wilson showed off puppies he bought for $1,500, a new collection of Air Jordan shoes, plus guns, marijuana and gold chains. He filmed a music video for a rap song, which he placed on YouTube.
Wilson has been sentenced to 99 years in prison.
9. “Slip-and-trip shakedown bilks innocent businesses”
The Coalition Against Insurance Fraud identifies Bryan Duncan of New York, NY as the ringleader of a $31.7 million fraudulent slip-and-fall ring, in one of the largest insurance scam takedowns on record.
Hundreds of Duncan’s recruits, either from off the streets or homeless shelters, were offered cash to stage fraudulent slips-and-falls on properties belonging to unsuspecting restaurants, dry cleaners, etc.
According to the Coalition Against Insurance Fraud:
“Duncan unleashed a torrent of insurance claims for the phony falls, fake aches and setup surgeries on uninjured limbs and joints.”
“Many street people were forced into painful and life-altering surgeries, to increase payouts for the false insurance lawsuits. Some ‘patients’ endured two operations.”
“Duncan bribed his recruits with cash. Many were paid extra to get unneeded and invasive surgeries to inflate the insurance payouts. Surgeons wielded scalpels for spinal disc removals, spinal fusions, and knee and shoulder operations.”
“Duncan recruited patients, took them to medical and legal appointments, identified accident sites, paid the recruits, and coached them how to fake injuries.”
“The recruits were stationed in front of businesses around the city. They were shown how to fall into potholes and act hurt. Or seeming trips on cracks in sidewalks.”
“The setup stumbles seemingly caused throbbing injuries to sensitive body parts that plausibly needed surgery — knees, shoulders and backs. All the better to steal large insurance payouts.”
“The low-income recruits were desperate for money. Duncan’s ring paid them tiny sums to get cut up — $1,000-$1,500 per surgery. The recruits needed the little windfalls to survive, no matter how much the surgeons sliced them open.”
“Lawyers also entered the picture, and now the big money flowed. The lawyers sued the victim businesses and their insurers. They sought insurance payouts for medical bills, plus claimed pain and suffering.”
Eventually, the scam got too large in scale for Duncan to handle; there were too many people involved to keep it secret, and Duncan was sentenced to 80 long months in federal prison.
10. “Food fight: Fake poisoning extorts insurance payouts”
Jacqueline Masse of Hampton, NH spent four years victimizing restaurants and grocery stores by fraudulently claiming that she and/or her adult children became seriously ill from “tainted food they’d eaten or bought there,” and demanded approximately $400,000 to pay for fake medical bills and nonexistent pain endured.
Here’s how she did it according to the Coalition Against Insurance Fraud:
“Masse mailed letters to the restaurants, such as grocery stores and other food firms. Often impersonating her adult kids, she demanded the firms pay the letter writer’s claimed medical expenses. The so-called victims didn’t have health coverage, the letters insisted. So, sadly they had to pay the large bills out of pocket or even borrow money, Masse wrote.”
“She also demanded hefty payouts for pain and suffering that she or her unknowing children endured from eating the spoiled food. She forged hospital medical records to back up the insurance claims.”
“Masse’s children didn’t know their mother had stolen their identities in the get-rich insurance plot.”
“Masse was an office manager and paralegal at a local law firm. So she also stole client medical files and checks, then altered them to appear the documents were hers or her children’s.”
“Masse even forged bank account records and credit card receipts to support the illusion that she dined at a given restaurant or bought spoiled food from a store.”
Insurers ultimately paid $206,000 of the $400,000 demand, and settlement checks were mailed to her home or the homes of her clueless children. Masse had her children deposit the checks into their bank accounts then write her a check for the full amount.
Masse was sentenced to 18 months in state prison and owes $206,000 in restitution to the businesses/insurers.
Stay vigilant, and Happy New Year to all!