Suspects Arrested in 1.8 Million Dollar Medical Scam

Phoenix, AZ – Seven arrested in one of Arizona’s biggest healthcare insurance fraud schemes. Over a period of two years, ring leader Nicholas Scaffidi and eight accomplices allegedly targeted six hospitals throughout Arizona and other states seeking a big payout on treatments for illnesses that never existed.

29-year-old Scaffidi bought health insurance for himself, his wife and seven others through Blue Cross-Blue Shield of Arizona (BCBS) on the Affordable Care Act’s Healthcare Marketplace. Scaffidi then allegedly scouted out “out-of-network” hospitals where he and the others would complain that they suffered from fake conditions, such as abdominal pain or fainting problems. In one instance Scaffidi refused to leave an emergency room unless he received diagnostic testing. The hospitals he chose were not preferred providers and the insurance company’s policy was, in those cases, to send checks for treatment directly to the patient who would be responsible to pay the hospitals for the treatment they received. The hospitals were never paid.

Often times, the addresses the suspects gave to the hospitals never existed, while the addresses the suspects gave for payment to BCBS were PO boxes across the US, in Scaffidi’s name. By the time the arrests were made, Arizona Department of Insurance agents discovered over 20 bank accounts tied to the suspects, and were able to execute court orders on the accounts, seizing over $97,000.00.

The Arizona Department of Insurance Fraud Unit, assisted by the Florida Department of Financial Services Bureau of Insurance, Florida’s Edgewood Police Department, New Mexico Department of Insurance, New Mexico’s Torrance County Sheriff’s Department, and the Homeland Security Investigations (BEST) Border Enforcement Security Team, served arrest and search warrants in Florida and New Mexico. Those arrested were Nicholas Scaffidi, Jolene Scaffidi, Darrell Johnson, Melissa Tavasci, Roy Brite, Seralda Johnson and Jeffrey Catren. The investigation is continuing and more arrests are expected in the future.

About the Fraud Unit

The Fraud Unit was established in the Arizona Department of Insurance in 1994 to deter, investigate and facilitate convictions of insurance fraud. By deterring fraud, the Fraud Unit reduces the inflationary impact of fraud that is passed on to consumers through higher costs of insurance products. If you believe you are a victim of insurance fraud or know of someone committing insurance fraud, please contact the Arizona Department of Insurance Fraud Unit at 602-364-2140.

About the Arizona Department of Insurance

The Arizona Department of Insurance, an agency of the State of Arizona, is responsible for the education and protection of insurance consumers and for oversight of the insurance industry in the state.  If you need assistance with your insurance, please contact the Arizona Department of Insurance Consumer Affairs Division at 602-364-2499 (metro Phoenix) or 800-325-2548 (outside Phoenix).

GO-PRO Video Leads to Conviction of Insurance Fraud Suspect

Phoenix, AZ – Robert Atlas falsely reported to GEICO that he had crashed his 2012 Corvette Stingray while exiting the I-10 freeway, on the exit ramp at Wild horse pass in Chandler Arizona. Robert was paid $61,465.11 by GEICO for the loss of his Corvette. It was later discovered that on 10/10/2015, Robert Atlas had actually raced his Corvette Stingray in a drag race at a drag racing event at Wild Horse Pass Motorsports Park. He subsequently lost control of his corvette during the race and crashed into the concrete barrier totaling his Corvette Stingray. This crash was captured on a Go-Pro video and published on YouTube. The policy does not cover damage caused to the vehicle if it was involved in drag racing. Robert was later shown the video footage and he admitted to making the false claim to GEICO Insurance.


On 1-25-17, Robert Atlas pled guilty to Insurance Fraud as a Class 6 Undesignated offense and as required by the Plea Agreement he paid the entire amount of restitution back to GEICO Insurance prior to sentencing. He was sentenced to two years supervised probation and was assessed $1,560.00 in court costs.


The case was investigated by the Arizona Department of Insurance Fraud Unit and prosecuted by the Arizona Attorney General’s Office.


YouTube video below.


https://www.youtube.com/watch?v=j-xdgp3x4g0

Extension of Major Medical Transitional Policies through Calendar Year 2018

Phoenix - The Arizona Department of Insurance (ADOI) announced today that insurers in the individual and small group[1] major medical health insurance markets can choose to renew transitional policies for a policy year beginning on or before October 1, 2018, provided all transitional coverage ends by December 31, 2018.    Transitional policies are non-Affordable-Care-Act-compliant policies that have been continuously in effect since by or before December 31, 2013.  At least 6 health insurers have individual or small group transitional policies still in effect in Arizona.

This extension is the maximum extension permitted under the Insurance Standards Bulletin issued on February 23, 2017 by the Center for Consumer Information and Insurance Oversight (CCIIO), and gives insurers the option to continue the pre-2014 individual and small group policies covering approximately 70,000 Arizonans through the end of 2018.  Insurers that offer this extension of transitional coverage are required to send each policyholder a renewal notice that explains the offer to continue the transitional policy through the end of 2018 and includes information regarding any related price increase.  Insurers must also send a 90-day notice for the final discontinuation of the transitional plans.

The extension does not affect grandfathered policies issued prior to March 23, 2010.  These policies can remain in effect as long as they maintain grandfathered status.

For additional information on the Affordable Care Act, please visit the Arizona Department of Insurance website or call Consumer Assistance at (602) 364-2499. 

 

[1] Small Group refers to a policy issued to an employer who employs at least two but not more than fifty eligible employees

(ARS § 20-2301(A)(21)).

 

Insurance Agent Arrested for Stealing $80,000 of Premiums

Phoenix, AZ – It seems that between March 2016 and January 2017, Ms. Rosita Johns diverted over $80,000.00 in premiums paid by two companies towards their workers’ compensation and general liability insurance policies.  

On August 10, 2016, Burke Construction Group Inc. filed a complaint with the Arizona Department of Insurance Consumer Protection Division concerning the theft of $11,200 it paid to Ms. Johns for a surety bond.  Johns never issued the bond and appears to have diverted the funds for her personal use.  On October 25, 2016, the Department revoked her individual insurance license as well as the licenses of three of her business entities.  It was at that time, the Consumer Protection Division referred the case to the Department’s Fraud Division.

Further investigation by the Fraud Division uncovered another victim, which paid more than $69,470 for workers compensation, general liability, and automobile policies.  Ms. Johns did not forward the premiums to the insurance company and policies were not issued.  Again, it appears John’s diverted the funds for her personal use.

On April 5, 2017, Johns was taken into custody and booked into the Maricopa County Jail for theft and insurance fraud.  The Fraud Division’s investigation is ongoing as additional victims are being identified.

The investigation is being submitted to the Arizona Attorney General’s Office for prosecution.

Insurance Professional License Number Crosswalk (MS EXCEL)

With the Department of Insurance move off of its old regulatory system to State Based Systems ("SBS"), the license number for each Arizona-licensed insurance professional (insurance producer/agent, surplus lines broker, insurance adjuster, etc.) changed. Attached is a MICROSOFT EXCEL file that contains the name, old (legacy) license number, new license number and National Producer Number for each insurance professional licensed whose license expired/expires on or after 4/30/2016. Use the LICENSE SEARCH menu option at the top of this page to view the license record for a particular licensee or company.

Insurance Professional License Number Crosswalk (CSV)

With the Department of Insurance move off of its old regulatory system to State Based Systems ("SBS"), the license number for each Arizona-licensed insurance professional (insurance producer/agent, surplus lines broker, insurance adjuster, etc.) changed. Attached is a COMMA-SEPARATED VALUES (CSV) file that contains the name, old (legacy) license number, new license number and National Producer Number for each insurance professional licensed whose license expired/expires on or after 4/30/2016. Use the LICENSE SEARCH menu option at the top of this page to view the license record for a particular licensee or company.