8 indicted for food stamp fraud: 'Small percentage' abuse system, but cost Alabama millions

Eight north Alabama residents have been indicted on felony charges in Morgan County after a Department of Human Resources investigation determined they fraudulently used food assistance cards, court records show.


Joyce Workman, 44, of Decatur, Cherokee Clem, 19, of Decatur, Joshua Edward Priest, 26, of Lacey's Spring, and Ali Alsamawi, 40, of Decatur, each are charged with public assistance fraud, a Class C felony that's punishable by up to 10 years in prison. Four other suspects also have been indicted, but their identities are being withheld pending arrest.
Three of the suspects, Workman, Alsamawi and Clem, are accused of having and using multiple food assistance cards, which were provided to them by the other five suspects, according to the indictment.
Alabama's food assistance program for low-income families is called SNAP, or the Supplemental Nutrition Assistance Program, and is administered by DHR.


In Alabama, 383,923 households received more than $1 million in July, according to the most recent data available.


The fraud reportedly occurred in Morgan County from January 2015 to April 2016, court records show.

"We don't really comment on something that's under prosecution," said the Department's spokesman Barry Spear. "We have a fraud investigation unit to work with local and state agencies when something like this might be going on."


Just during the first eight months of this year, DHR has collected more than $5.7 million due to fraud and administrative error, Spear said. The Department has confirmed 886 fraud claims during that same period, he said.


Spear said the department relies on the public for tips and information about individuals or businesses who may be misusing SNAP benefits.


"You see people complaining about it, but they have to let us know," Spear said. "If we don't know about it, we can't very well investigate it."

"The thing a lot of people don't realize is it's not just individuals, but also stores that can be responsible for some of the fraud," Spear said. "If you believe a store is allowing people to purchase items that are not eligible for the program or making cash transactions with SNAP benefits, report it. We can stop a whole lot of fraud by stopping a store — tens or even hundreds of people."


Earlier this year in Jefferson County, a Bessemer grocery store owner agreed to pay $5.2 million back to DHR when he pleaded guilty to fraud, money laundering and other charges.

Former Santa Barbara Police Officer Guilty of Workers' Comp Fraud

Jacob Finerty, 28, of Hesperia, California, entered an open plea to four counts of fraud on Friday.
Officer Finerty claimed to have injured his back in an off-duty accident while he was employed with the Santa Barbara Police Department. He also claimed that he could not perform his usual and customary employment duties as a police officer due to his back injury.

Sergeant Jill Beecher of the Santa Barbara Police Department investigated Finerty's claims. She discovered that during the same time Finerty claimed he couldn't do his job, he was seen on multiple occasions lifting heavy weights, engaging in strength competitions and competing in MAS Wrestling events.  Many of those activities were captured on video and photographs and posted on social media.
Sgt. Beecher sent her findings to Deputy District Attorney Gary Gemberling who filed the four felony counts against Finerty.

Finerty entered the open plea to all charges and there was no plea agreement.

Judge Clifford Anderson sentenced Finerty to 120 days in jail, placed him on five years probation and ordered him to payback $115,669.86 to the City of Santa Barbara.

Santa Barbara County District Attorney Joyce Dudley stated, "The fraud committed by the defendant was paid for by the taxpayers of the City of Santa Barbara, the very same people the defendant was hired to protect. His criminal actions caused a significant breach of the public's trust and resulted in his status changing from Santa Barbara Police Officer to a Felon."

Interesting Facts about Insurance Fraud

A shocking truth that many people don’t realize is that insurance fraud has become a ‘norm’ in our society. You read news stories about insurance fraud and watch them on TV regularly. The number of people making fraudulent claims is increasing every year. As a result, insurance companies raise their premiums and every policyholder has to pay the price of damage a few black sheep inflict.

It is not possible for every person to hire an insurance fraud specialist every time they suspect someone is committing insurance fraud, but you can learn more about insurance fraud, so you can protect yourself. You can contact NSIU, one of the top private investigation firms in the country, when the occasion calls for it.

Facts about Insurance Fraud

·       -  It is estimated that in the U.S. about $80 billion worth of fraudulent claims are filed every year.

·         $50 billion of these can be attributed to medical insurance fraud.

·      -   This costs every policy holder about $400 each year, because of increased premiums.

·      -   Most common type of insurance fraud is premium diversion; insurance agents don’t send the premiums to underwriters and keep them for themselves.

·    -     Natural or accidental disasters can often invite fraudulent claims. People try to take advantage of the disaster and make fabricated claims about their property damage and lost possessions.

·      -   Many states, or state fraud bureaus, offer rewards to individuals for reporting ongoing insurance scams.

·  -       Sometimes a service provider will offer free service to you, but later bill your insurance company for the same service. This type of insurance fraud can commonly go unchecked.

·       -  A large number of insurance fraudsters pose as insurance agents and scam people out of their money, while they never actually provide any insurance.

·         Contacting the insurance company regarding the insurance agent who has contacted you will help to mitigate this type of scam.

·    -     A mechanic or body shop worker may exaggerate the damage and charge the insurance company more, making you an unwitting insurance scammer.

-The information above will help you learn more about insurance fraud schemes around you and how it will hurt you as a policy holder. If you suspect that you or your organization is being targeted for insurance fraud, then you should contact NSIU immediately.

Company Introduction

National SIU (Special Investigation Unit) is a professional investigation firm that specializes in surveillance and other services specifically for risk managers and insurance professionals. The organization’s main goal is to provide their clients with effective evidence which can be used to uncover the truth.

For more information, please visit http://www.nsiu.com/Home

Insurance Fraud Scheme Sheds Light On Deeply Troubled Compounding Pharmacy Industry

Last month, eight people in Florida were charged in a massive insurance fraud scheme that ran into the hundreds of millions of dollars.

A number of compounding pharmacies in the Tampa Bay and Miami areas were found to be submitting fraudulent reimbursement claims and covering them up with bribes and kickbacks; experts believe that thousands of consumers had their personal information misused in the scheme. All of this comes as a key federal agency is considering stricter oversight of the growing—and dangerously under-regulated—field of compounding pharmacies in the United States.

Compounding is a practice in which a pharmacist or physician combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient, according to the Food and Drug Administration (FDA). Compounding allows changes in medications to avoid allergies or other adverse reactions, or to convert dosage (such as from a pill to a liquid) one patient at a time. Or at least it used to be. Large-scale compounding pharmacies today are acting as quasi drug manufacturers, and the industry has grown in recent years. With that growth, problems of health and safety for consumers have increased as well. These aren’t corner drug stores any more, where trusted neighborhood pharmacists prepare individualized compounds for regular customers. Compounding has been taken over by behemoth facilities churning out thousands of compound medications. And as we’ve found out in recent years, these compounders need far greater oversight.

In 2012, this captured national attention when contaminated steroid injections prepared by a major compounding pharmacy in Massachusetts caused a multi-state outbreak of fungal meningitis. Sixty-four patients died, 800 were sickened, and the 14,000+ patients who had received the injections lived in a state of fear. Following the outbreak, consumers and legislators called for stricter regulations. The National Consumers League (NCL), which has spent more than 100 years defending the rights of consumers to safe and effective medications, was a vocal advocate of strengthened oversight and safeguards for patients using compounding medications. While some of the regulations were tightened up, compounding pharmacies still lack adequate oversight, and the explosion of these pharmacies has left regulators playing catch-up.

In May, more than 7,300 patients at a San Diego-area hospital “may have been exposed to infection from contaminated medications last year,” which was “traced to the compounding pharmacy lab at Paradise Valley Hospital in National City, California,” according to Kaiser Health News. In 2012, 43 patients developed fungal eye infections linked to contaminated sterile ophthalmic drug products shipped from a compounding pharmacy in Ocala, Florida; at least 29 of these patients suffered partial-to-severe vision loss. Unfortunately, the list goes on and on.

One of the primary concerns is that compounded drugs are not FDA-approved. The FDA does not verify the safety or effectiveness of compounded drugs, which also lack an FDA finding of manufacturing quality before they are marketed. It is state boards of pharmacy that have primary responsibility for the day-to-day oversight of state-licensed pharmacies that compound drugs, and state boards often have limited resources to regulate their licensees. A recent study by the Pew Charitable Trusts found an alarming disparity in how states regulate compounding pharmacies, including that only half of the states require the compounding pharmacies that make sterile medications (those that are injected or ingested into the body) to fully comply with recognized quality standards. Meanwhile, 60 percent of states do not even require compounding pharmacies to report serious adverse drug events and reactions related to sterile compounding.

The FDA has the authority to act when compounding pharmacies break the law, and the agency typically responds when it receives reports of problems or adverse events, but consumers shouldn’t be expected to wait for bad actors to injure or kill people before their right to safe, uncompromised medications are enforced. The FDA and state boards of pharmacy must have the ability to inspect pharmacy records, ensure that quality standards are upheld, and track facilities as they engage in drug compounding. As with all things, this takes money, and the FDA and state agencies have too long been underfunded in many of their oversight roles.

The FDA has issued draft guidance to address some of these issues and, while that guidance is encouraging, I believe we need to do far more to protect consumers who depend on the integrity of the medications they are prescribed. One immediate and significant step forward would be compulsory reporting of adverse events as they happen for compounding pharmacies. Oversight and enforcement lead to better safety and security for patients and their families. We don’t have that right now, and, without it, we remain in the untenable position of putting patients at unreasonable risk.

County Recovers $1.2 Million in Fraudulently Taken Public Money in First Half of ’16

On Aug. 31 Orange County District Attorney David Hoovler announced that a state report shows Orange County outperformed every other county in the state except Manhattan under the Crimes Against Revenue Program (CARP) in the first half of 2016.

The state’s CARP initiative provides funding to district attorney’s offices to enable those offices to enhance the investigation and prosecution of cases involving the theft of state money.
The initiative primarily targets people who fail to remit tax money to the state, but also includes those who commit public benefits fraud, such as welfare and food stamp fraud, and companies that commit workers compensation insurance fraud.

The report from the State Division of Criminal Justice Services (DCJS) says that in the first half of 2016, Orange County’s CARP effort recovered more than $1.2 million in state funds that had been fraudulently taken.

Big Return

Orange County’s numbers are remarkable. Under CARP, DCJS provides the Orange County District Attorney’s Office with a yearly $89,000 grant to partially fund the salary and benefits of one experienced assistant district attorney.

The $1.2 million recovered represents a more than thirteen-fold return on the State’s investment in Orange County’s CARP effort. At this time 30 counties in New York participate in CARP initiatives and the funds recovered by the county represent more than 43 percent of the funds recovered by Long Island and other upstate counties in the program.

Hoovler said this effort was a priority when he took office. “I intended to make the theft of state money a priority for our prosecution efforts. I’m proud to know that my Office’s CARP effort is second in the state, outshining many larger counties, and coming in behind only the county with the largest financial sector in the world.”

The county works with the State Department of Taxation and Finance, the Department of Labor, and the State Insurance Fund on recovering illegally-obtained state money.

Benefits of Surveillance, Social Media in Workers’ Comp Claims Investigations

As workers’ compensation fraud costs top out at an estimated $7.2 billion a year, according to the National Insurance Crime Bureau, insurers are looking at ways to combat the crime.
There are several warning signs that a workers’ compensation claim may be fraudulent. These include Monday morning reports of an injury that happened the previous week, conflicting descriptions of how the injury occurred, no witnesses and a history of claims, according to a 2011 white paper on the subject released by Employers, an insurer specializing in small businesses.
Brad Balentine, SIU director at David Morse & Associates, said that using surveillance and social media are two ways to verify suspicious claims. Though using surveillance in claims handling can be an expensive, it is still an invaluable tool. Hours spent waiting for a claimant to be spotted can increase costs, but a thorough investigation completed prior to surveillance can cut costs and result in success, he said.

“You’re waiting, but what you want to do is proactively do your research as much as possible to make sure that your chances of getting something from the expenses are the best that they can be,” Balentine said.

Social media can aid in an investigation by offering a photo of the injured person so the subject can be correctly identified prior to surveillance. In addition, investigators can use social media sites to documents activities in which the injured may be involved. If there is a question as to the residence of an individual, social media may reveal a photo taken in front of a house. Through online research, the address can be determined and verified.
According to a 2011 presentation at the International Association of Special Investigation Units (IASIU) on the effective and ethical use of social media content in insurance investigations, social media can be an effective means to discover information during an investigation.
Roy Mura, an attorney with New York-based Mura & Storm, said that a completed Facebook profile can contain up to 40 pieces of personal information. In his presentation, he noted that insurance investigations are aided by social media in the following ways:

• confirming policy application information;
• confirming facts of loss;
• confirming alibi;
• verifying disability status;
• locating witnesses.

Photos found on social media sites may include metadata that can offer details on a person’s location when the photo was taken.
State insurance departments actively use surveillance and social media in their fraud investigations.
For 2013-2014, California’s workers’ compensation fraud division identified 5,729 suspected fraud cases, made 255 arrests and referred 248 cases for prosecution during the 2013-2014 fiscal year. Potential losses that year alone amounted to $242,669,008.
The Kia Dancing Hamster fraud case was one California case that received wide media attention. Leroy Barnes, one of the dancing hamsters in a series of Kia commercials, was arrested on insurance fraud charges. Barnes allegedly lied to doctors about his employment status while receiving disability benefits. Besides working on the auto manufacturer’s commercials, Barnes performed in a rap group under an alias, recorded a song and worked as a backup dancer for Madonna, Kelly Rowland and Chris Brown under the name Hypnosis. He entered a no contest plea to the charges and was sentenced to 90 days of electronic monitoring, 400 hours of community service and was required to pay $24,000 in restitution.
Ohio workers’ compensation fraud investigators last year used surveillance footage to show a Massillon man trimming trees and repairing cars all while collecting disability. Adelbert Tyman pleaded guilty and was sentenced on one count of  fraud, a first-degree misdemeanor.
The Ohio Bureau of Workers’ Compensation  (BWC) received an allegation that Tyman was working for a tree service company and getting paid under the table.
Investigators obtained surveillance footage of Tyman cutting down trees and hauling logs for a tree service company, repairing cars and moving a large dumpster at an auto repair shop. Interviews confirmed that he was paid for the work. Tyman worked while receiving temporary total disability benefits for a prior workplace injury. (Watch the video here: https://ohiobwcfraud.wordpress.com/2015/03/12/surveillance-footage-shows-massillon-man-trimmed-trees-repaired-cars-while-collecting-disability/)

Tyman was sentenced to three years of probation and was ordered to pay $6,703.21 in restitution to BWC. If he violates the terms of his probation, he may be sentenced to serve up to six months in the county jail.

Also in 2014, an Ohio woman was charged with one misdemeanor count of falsification for filing a false claim, after she filed a claim with the BWC indicating that she fell at work, although she posted on a social media site that she fell at a gas station.
An investigation revealed that Kayla Fortman reported to her employer and treating physician that she fell in a company parking lot, when she actually fell while getting out of her vehicle at a gas station across the street. Fortman was sentenced to 180 day suspended jail sentence and two years’ probation. In addition, she was ordered to pay $200 in court costs and to make restitution to BWC in the amount of $1,908.76.

With a Prompt Evidence Turnover Service, NSIU Delivers Superior Results to Clients

Efficiency is a specialty of NSIU and it is evident in their evidence turnover service, which allows them to deliver favorable results to clients

TBD – Many investigation agencies can offer clients surveillance and investigation services, but delivering timely results is what separates average investigators from the elite ones. Stretched out insurance fraud investigations don’t benefit anyone but the fraudsters. So, it is safe to say that promptness is one of the best qualities that an insurance investigation agency can have.

NSIU prides itself on the efficient and timely services that it offers to its clients. The best part of these timely services is the prompt evidence turnover service, which ensures that the clients receive the proof of any wrong doing, right after the investigators learn about it.

The agency utilizes their innovative virtual CASELINK to accomplish the task of prompt turnover of evidence. NSIU’s CASELINK is a virtual case management system which gives clients access to any and all evidence that the investigators have gathered on the case.

The best part about the CASELINK is that it is accessible to clients from anywhere and it is available 24/7, so the clients can access their case files whenever and wherever they want. And the clients don’t have to worry about the security of the case files either; the CASELINK is secured by a 256-bit encryption, which should give the clients peace of mind about the protection of their access to the CASELINK.

A representative from the agency was asked to comment on the topic and this is what they had to say, “As soon as our investigators have gathered evidence on any particular case, it is filed in the CASELINK. Clients can then access it from wherever they are. If the clients need us to turn over the evidence in person, then we can also accommodate that request. Our investigators will gather the evidence and deliver it to the client’s location.”

Prompt turnover of evidence is not the only advantage that clients receive, when they work with NSIU. The biggest advantage is the flat-rate pricing that the agency offer to their clients. This pricing method provides clients with the benefit of saving hundreds of dollars during an investigation.

With decades of experience under their belt, the investigators at NSIU know how to handle any type of insurance fraud investigation. They make sure that the truth is uncovered in all the investigations they handle and that their clients can avoid any possible losses.

About the Company

National SIU (Special Investigation Unit) is a professional investigation firm that specializes in surveillance and other services specifically for risk managers and insurance professionals. The organization’s main goal is to provide their clients with effective evidence which can be used to uncover the truth.

Contact Information

Website:             http://www.nsiu.com/home

Toll-free:             800.960.NSIU (6748)

Fax:                        800.293.6748

Email:                   contact@nsiu.com

Address:              National SIU Headquarters, 869 E. Schaumburg Road, Suite 376, Schaumburg, IL 60194

LinkedIn:             https://www.linkedin.com/company/nationwide-s.i.u.

Twitter:                https://twitter.com/nsiuinsurance

5 Most Common Types of Insurance Frauds You Should Know Of

Surprisingly, insurance fraud is viewed as a victim-less offense. When insurance companies are cheated, it is the people who pay premium on a timely basis that suffer the most. This is because their insurance cost goes up. It’s saddening to know that the losses suffered by insurance companies because of perpetrators are in turn borne by honest people.

According to statistics, around $80 billion losses are incurred annually on account of insurance frauds.

However, not many people know that we, as individuals, can play an essential role in preventing insurance frauds. For this, we need to be aware of the most common types. Stated below are the 5 most common types of insurance frauds:

1.     Stolen Cars

Offenders make use of stolen cars to commit an insurance fraud in two ways. Firstly, if a legitimate owner sells the car to a body shop owner for spare parts, it could be considered stolen. Since the body shop is also a faction of the scheme, the legal authorities wouldn’t  be able to find out that an insurance fraud has been committed. Secondly, criminals hide their car and make claims that it has been stolen. Moreover, the insurance company wouldn’t be able to draw out money from the car owner even after the car is located.

2.     Car Accidents

Many of the accidents that happen around us are actually insurance frauds taking place. Insurance fraud accidents are staged where the driver and the victim are co-conspirators. Sometimes, the fraud is planned on such a massive level that it involves fake witnesses and insurance investigators as well. Moreover, in such fraud claims, the value of the car that got hit and the value of the car that hits the victim’s car are greatly hiked. Likely so, the cost of the damages is also inflated.

3.     Health Insurance Billing Fraud

It is quite appalling to know that healthcare professionals are often involved in such conspiracies. Some basic examples of common frauds they commit include billing the insurance company for treatments that was never provided, or hiking the value of the work that was done. For instance, if a patient comes in for a regular checkup, the doctor would bill the insurance company for an in-patient surgery. Here, the patient may be the real victim of fraud but would have no knowledge of it.

4.     Unneeded Medical Procedures

If you ever come across a situation where your doctor is prescribing you tests unnecessarily, or ones you feel don’t pertain to your condition, you might be a victim of insurance fraud. For example, if you are suffering from a leg sore and your doctor asks you to get some blood and stool tests done, you are likely to get confused as to the reason behind this test.

5.     Faked Death

This is one fraud that has stemmed from movies, books and TV shows. In such kind of insurance frauds, the criminal will file an insurance policy of his own life, making the spouse as the only beneficiary. After months, the fraudster will fake his/her own death and all the money and benefits will go to the spouse. Post funeral, the spouse may relocate where they reunite and enjoy the claimed money.

Have you been a victim of a ruthless insurance fraud? If yes, then you surely need the assistance of an insurance fraud investigator such as National SIU. This private investigations firm has a special investigations unit so that you can be provided with evidences that reveal the real side of the case. Browse their website http://www.nsiu.com/home for more information.