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Insurance adjusters arrested on racketeering charges

Posted on October 01, 2010 3:00 AM EST

Five local auto insurance adjusters were arrested by the Hialeah Police Department for their involvement in a scheme to defraud the same insurance companies that employed them. The adjusters are accused of inflating estimates in exchange for monetary kickbacks. The adjusters will be arraigned in 21 days, unless prosecutors need more time to investigate the case before deciding which charges they will file. It is unknown whether the defendants will hire a privately retained Miami criminal defense lawyer or whether they will use counsel from the public defender's office.

The police were aided in their investigation by an auto shop owner that was arrested for billing false claims for deployed air bags. Rather than facing jail or prison time, the body shop owner agreed to cooperate with the authorities by setting up the adjusters. According to the police reports, the illegal dealings were captured on videotape. The accused adjusters worked for both Allstate and State Farm. In one of the cases, an adjuster inflated the estimate from $3,201 to $22,149 in exchange for a $2,000 payoff. According to the Miami-Dade County State Attorney, "These adjusters got the cold cash from this crime while everyone else paid the bill." The defendants were arrested on charges of racketeering, grand theft and petit theft.

The case will most likely be prosecuted by the insurance fraud unit at the state attorney's office. While this is not a typical insurance fraud case, e.g. staged accidents, the division appears to be suited to handle the matter. Until the charges are filed and the amount of loss tallied, it is difficult to determine what type of penalties the prosecutors will seek in these cases. It should be noted that racketeering a level 7 offense under the Florida Sentencing Guidelines which dictates a minimum of 21 months in prison. Because the adjusters have no prior record they may be offered pre-trial intervention for first time offenders or probation as long as they make restitution to the insurance companies they allegedly defrauded. On the other hand, the state attorney's office may seek to make an example of these defendants in order to send a message to community which is riddled with fraud.

Prior to plea negotiations, the defense counsel representing the defendants must first review the discovery to determine if a defense exists to the charges. The police reports indicate that some of the transactions were video and audio recorded. It is not clear if all of the defendants were caught on tape. The prosecution will have difficult burden in proving their cases if the sole evidence against a defendant is based on a cooperating defendant. Any competent prosecutor knows that a case cannot be successfully prosecuted unless they have evidence corroborating the cooperating witness's testimony.

Five Auto Insurance Appraisers, Adjusters Charged, The Miami Herald.com, October 1, 2010.
Categories: Fraud