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Viaticals Fraud > Grand
Jury Final Report
IN THE SUPREME COURT OF THE STATE OF FLORIDA
JULY TERM, 1999
CASE NO. 95,746
November 16, 2000
I. INTRODUCTION
The Fifteenth Statewide Grand Jury was impaneled on September 22, 1999, and
was seated in the Ninth Judicial Circuit: Orange County. The panel was drawn
from around the State. The Grand Jury met on twelve (12) occasions to investigate
allegations of multi-circuit, organized criminal activity. The Grand Jury's
original term expired after twelve months, but was extended to March 20, 2001.
The Grand Jury is adjourning early, subject to recall, if necessary.
The purpose of this report is to record for posterity the work of this Grand
Jury, with the hope that its collective voice will be heard and that the citizens
of this State will benefit from its efforts.
II. INVESTIGATIONS
Since September of 1999 we have received testimony regarding investigations
into viatical insurance fraud, personal injury protection insurance fraud,
fraud against the government, and trafficking in controlled substances. As
a result, we issued six (6) indictments charging thirteen (13) defendants and
two (2) corporations with a total of one hundred thirty-eight (138) crimes.
The indictments allege the following criminal offenses: racketeering; grand
theft; organized scheme to defraud; false and fraudulent insurance claims;
trafficking in cocaine; conspiracy to traffic in cocaine; and conspiracy to
introduce or possess unlawful articles in prison.
A. Insurance Fraud
During our term, the Statewide Prosecutor has worked with the Department
of Insurance's Division of Insurance Fraud, the State Comptroller's Office
and
numerous private insurers in the investigation of many insurance fraud
cases related to our investigations. The Statewide Prosecutor has filed forty-one
(41) additional criminal charges against twenty (20) criminal defendants
in nine (9) direct informations related to viatical fraud and fraud in
the
personal injury protection insurance line. Taken together, these criminal
defendants were responsible for the theft of over one million one hundred
eighty-five thousand dollars ($1,185,000.00) from a variety of private
insurers in the State of Florida, all of which is ultimately passed on to the
citizens
in increased rates.
B. Fraud Against the Government
Working with the Fight Fraud Task Force, a group of twenty five local, state,
and federal investigative regulatory and prosecutorial agencies created
in 1998, the Office of Statewide Prosecution has been investigating a number
of complex fraud cases involving government contracts. During our term
this
work focused on State road building contracts which lead to our returning
an indictment of a major road builder accused of defrauding the State of
over $30 million.
C. Drug Control
The Office of Statewide Prosecution has also been active in the prosecution
of drug cases and money laundering during our term. Since August of 1999
the Office of Statewide Prosecution has worked with local, state, and federal
law enforcement agencies in the investigation and prosecution of criminals
for possessing, selling and trafficking in cocaine, marijuana, heroin,
GHB, MDMA ("ecstasy") and other illegal substances. These criminal investigations
resulted in the filing of 80 informations charging 231 defendants with a
variety of drug trafficking and money laundering offenses.
III. REPORTS AND PRESENTMENTS
The Grand Jury issued three reports during its term: (1) Fraud in the Viatical
Industry (Viatical Fraud); (2) Insurance Fraud Related to Personal Injury Protection
(PIP Fraud); (3) An Analysis of Florida's Drug Control Efforts (Drug Control).
Our report on Viatical Fraud was released in January of this year. That report
focused on the practice of "cleansheeting" where terminally ill individuals
applied for insurance without disclosing their true medical condition, and
then sold the policies to viatical providers for a profit. The providers then
knowingly sold these fraudulently procured policies to unwitting investors.
Numerous recommendations were directed to the 2000 Legislature. We are gratified
that the Legislature implemented most of our recommendations for reform detailed
in the Viatical Fraud report.
In August of this year we issued our report on PIP Fraud which detailed extensive
fraud in the area of personal injury protection insurance. We found that runners
were accessing police reports in order to illegally solicit accident victims
for treatment and for filing PIP claims. We also found rampant fraud in the
diagnosis and treatment by medical providers who use runners to solicit.
Our latest report released this month concerns drug control efforts in Florida.
That report concludes that the war on drugs can only be won in Florida if there
is broad support from government officials as well as the public at large.
We also concluded that treatment, prevention, and education are as essential
to the equation as continued efforts to interdict the supply of narcotics and
prosecute drug dealers and traffickers, and that therefore a successful conclusion
to our State's drug control efforts will require strong action on both the
demand and supply side of the drug problem.
Both of our latest reports contain various recommendations including legislative
proposals. We have asked our legal advisers to present our proposals to the
2001 Legislature. We hope the Florida Legislature will give our findings and
recommendations on these topics the same consideration as previous reports.
IV. CONCLUSIONS AND ACKNOWLEDGMENTS
While the work which we were asked to perform has been difficult, the issues
complex, and the schedule exhausting at times, we have enjoyed our service
and are proud of our contributions to the State of Florida.
We wish to thank the following individuals and their respective offices for
assisting us in the performance of our responsibilities:
The Honorable Jeb Bush, Governor
The Honorable Bob Butterworth, Attorney General
The Honorable Bill Nelson, Insurance Commissioner
The Honorable Robert Milligan, Comptroller
Commissioner Tim Moore, Florida Department of Law Enforcement
Secretary Michael Moore, Department of Corrections
Secretary Tom Barry, Department of Transportation
State Courts Administrator Ken Palmer
The Honorable Belvin Perry, Jr., Presiding Judge
The Honorable Alice Blackwell White, Alternate Presiding Judge
The Honorable Linda Chapin, Clerk of the Circuit Court
The Honorable Kevin Beary, Orange County Sheriff
Orange County Court Administrator Matthew Benefiel
Respectfully submitted to the Honorable Belvin Perry, Jr., Presiding Judge,
this ______ day of November, 2000.
________________________________
ROLAND P. PICCONE
Foreperson
Fifteenth Statewide Grand Jury of Florida
___________________________________
HOLLY EARHART
Recording Secretary
Fifteenth Statewide Grand Jury of Florida
I, MELANIE ANN HINES, Legal Adviser, Fifteenth Statewide Grand Jury for the
State of Florida, hereby certify that I, as authorized and required by law,
have advised the Grand Jury which returned this Final Report this __________
day of November, 2000.
__________________________________
MELANIE ANN HINES
Statewide Prosecutor
Statewide Grand Jury Legal Adviser
Fifteenth Statewide Grand Jury of Florida
I, Oscar R. Gelpi, Legal Adviser, Fifteenth Statewide Grand Jury for the State
of Florida, hereby certify that I, as authorized and required by law, have
advised the Grand Jury which returned this Final Report this __________ day
of November, 2000.
___________________________________
OSCAR R. GELPI
Special Counsel
Assistant Legal Adviser
Fifteenth Statewide Grand Jury of Florida
THE FOREGOING Final Report was returned before me in open court, this ________day
of November, 2000.
__________________________________
BELVIN PERRY, JR
Presiding Judge
Fifteenth Statewide Grand Jury of Florida
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