More than 450 professionals’ from 20 states attended the two-day event at the Hershey Lodge and Convention Center in Hershey, Pennsylvania. The conference also featured the 2016 Pennsylvania Fraud Fighter awards presented by the Executive Director of the IFPA, Tom Donahue, the President of the Greater Pittsburgh Chapter of the IASIU, Diane Svec.
2016 Fraud Conference Highlights
On behalf of the IFPA’s Board of Directors and the officers and members of the conference co-host chapters of IASIU, IFPA Executive Director Tom Donahue thanked all attendees for their work during the past year and for their help in ensuring Pennsylvania’s continued success in the fight against insurance fraud.
- After his opening remarks, Donahue introduced keynote speaker Dennis Jay, Executive Director of the Coalition Against Insurance Fraud. He has served as chief executive officer since the Coalition’s founding in 1993 and also serves as co-chair of the executive board of the Healthcare Fraud Prevention Partnership (HFFP). Jay has coordinated the drafting of a comprehensive model insurance fraud law which 21 states have passed wholly or in part. In 1996, he initiated the breakthrough research on why Americans do and don’t tolerate insurance fraud. Then, in 2010, he helped to initiate an anti-fraud public/private partnership involving the U.S. Department of Health & Human Services, the Department of Justice, private health plans, state regulators and anti-fraud organizations. Jay has testified before several state legislatures and the U.S. Congress. He has authored more than 100 articles and reports on insurance fraud and currently writes Insurance FraudBlog, a popular blog on issues and fraud topics.
Following Jay’s address, Donahue announced that Pennsylvania’s Fraud Fighters had nominated seven of their colleagues’ work for recognition and was joined onstage by IASIU Greater Pittsburgh Chapter President Diane Svec, of Erie Insurance.
- Donahue presented a 2016 Fraud Fighter Award to Detective Donald Murtha, Insurance Fraud Unit, Philadelphia District Attorney’s Office. Murtha conducted an investigation that led to the arrest of co-conspirators Edward R. Kirby and his son Edward A. (“Eddie”) Kirby, following the death of George Kirby (the brother of Edward and uncle of Eddie). Detective Murtha initiated the inquiry following a referral from the Philadelphia Police Department of a report by the victim’s son. He suspected his father might have been murdered by the defendants in order to collect on a life insurance policy. Murtha and his team utilized an array of tools to uncover and develop the evidence to verify the son’s theory. The investigation revealed that the defendants had indeed fraudulently obtained 10 guaranteed whole life insurance policies on the victim, killed him through the provision of methadone, and collected a total of $100,295 in proceeds on five of the policies.
- Donahue presented a 2016 Fraud Fighter Award to Detective David Jay, Insurance Fraud Unit, York County District Attorney’s Office. Detective Jay joined the York County District Attorney’s Office Insurance Fraud Unit in 2014, following a 29-year career with the Spring Garden Township Police Department. His training and experience as a law enforcement professional, along with an accounting/business degree, provides him with a unique skill set. David also serves as a Tech Services member of the York County Quick Response team where he’s become attuned to modern investigative techniques such as social media and digital information. His professional relationships within the insurance industry, SIUs and law enforcement partners have allowed him to be very successful in his fraud investigations.
- Donahue presented 2016 Fraud Fighter Awards to Ben Beddis, Supervisor-Corporate and Financial Investigator, Independence Blue Cross (IBC), James Devlin, Senior Investigator, IBC, and Detective Steven Bannar of the Delaware County District Attorney’s Office. The three were instrumental in the investigation and prosecution of Lawrence Wean, MD. IBC initiated an investigation after reading postings on a message board frequented by prescription drug-seeking individuals. Internal data analysis found that Dr. Wean had prescribed over 150,000 Class II or III pills to IBC members without ever conducting any evaluations or examinations. In 2014, an undercover Delaware County detective became a “patient” and was prescribed Xanax, Oxycodone and Vicodin without ever being examined. The doctor, who was supplied an IBC insurance card by the undercover detective, also charged the insurance carrier for services never rendered. At the conclusion of the trial, Dr. Wean was found guilty of three counts of insurance fraud, 99 counts of illegally prescribing controlled substances, and sentenced 10 to 20 years in state prison.
- Donahue presented 2016 Fraud Fighter Awards to Senior Deputy Attorney General Robert G. LaBar, Deputy Attorney General Matthew Connolly, Special Agent III, Douglas Hilyard, and Investigative Analysts Stephanie Wable and Cassandra J. Gillies of the Insurance Fraud Section, Pennsylvania Office of Attorney General for their contributions towards the investigation and conviction of osteopathic physician Dr. Stephanie Tarapchak. Between 2008 and 2011, Dr. Tarapchak prescribed and dispensed thousands of Schedule II controlled substances to her patients, including Oxycodone and Hydrocodone. She also fraudulently billed insurance companies for office visits and procedures that were never performed. One of Dr. Tarapchak’s patients, a 52-year-old male, died from the combined effects of multiple drugs, while another, a 16-year-old female, overdosed on Xanax. In 2016, Dr. Tarapchak was sentenced 7 ½-15 years in state prison on charges that included Insurance Fraud, Perjury, Endangering the Welfare of a Child, and Drug Delivery Resulting in Death, among others.
- Donahue presented 2016 Fraud Fighter Awards to Chief Deputy Attorney General Laura Ditka of the Criminal Prosecution Section and Senior Deputy Attorney General Mark A. Bellavia and Special Agent III, Douglas W. Hilyard, Insurance Fraud Section, Pennsylvania Office of Attorney General for their combined efforts in the investigation and prosecution of Dr. Richard Lenhart, a psychologist who used the guise of treatment to sexually assault two female patients under his care. The charges state that, between 2008 and 2011, Dr. Lenhart prescribed “touching therapy,” which involved inappropriate contact. Dr. Lenhart also fraudulently billed Highmark Insurance Company for these “services” by using claim codes associated with more traditional psychological services and treatments, submitting more than 700 claims for payments totaling $71,500. After a series of prosecutions and appeals, Dr. Lenhart was sentenced to three to six years in state prison, ordered to pay restitution and listed as a sexually violent predator.
- Greater Pittsburgh Chapter, IASIU President Diane Svec and Past President Tom Cesario recognized James Wabby with a lifetime achievement award. A member of the Greater Pittsburgh IASIU community, “Wabby” – as he is known, will be retiring. He holds more than 16 years in the Office of Attorney General’s Insurance Fraud Section, where his efforts have helped the section grow in terms of arrests and reputation. After military service, Cesario had a successful 33-year career with the Allegheny County Police Department, and during his tenure with the Attorney General’s office had more than 160 successful prosecutions. He previously received the Variety Club Award in Allegheny County for the arrests of three individuals arising out of an insurance fraud conspiracy. Cesario has been an active member of the Greater Pittsburgh Chapter, serving for many years as a member of the Board of Directors and as an organizer of the chapter’s annual golf outing.
- Donahue presented a 2016 Fraud Fighter Award to Senior Deputy Attorney General Robert G. LaBar and Special Agent III, Douglas Hilyard of the Insurance Fraud Section, Pennsylvania Office of Attorney General for their contributions towards the investigation and arrests of numerous individuals in a multistate conspiracy to fraudulently obtain cheaper insurance for commercial bus carriers. LaBar was appointed a Special Assistant United States Attorney for the Middle District of Pennsylvania and Hilyard was appointed a Federal Homeland Security Task Force Officer. The case is being prosecuted in the Middle District of Pennsylvania.
- The defendants charged in the conspiracy are alleged to have misrepresented that numerous bus carriers were headquartered and operating in Pennsylvania when in fact the bus carriers were based in New York City. By falsely misrepresenting the fact that the buses were located and garaged in Pennsylvania, the defendants involved in the conspiracy are alleged to have not only saved significant costs on insurance by committing rate evasion, but were also able to fraudulently obtain operating authority for the bus carriers along with licenses, stickers and other authority indicating that the bus carriers and the buses met federal and state standards. To the contrary, in many cases, the buses used by these defendants had not been properly maintained and did not meet the safety requirements to transport travelers in interstate commerce. Inspections of buses routinely revealed unsafe and hazardous conditions on the buses, which caused them to be routinely shut down and their licenses and operating authority terminated by the U.S. Department of Transportation.
- These unsafe and hazardous conditions were knowingly concealed from Pennsylvania and Federal authorities and over the years, the defendants fraudulently impeded and obstructed the proper administration and enforcement of bus safety regulations by authorities. The indictment also seeks the forfeiture of all assets of the criminal organization.
The arrests of the defendants involved with the commercial bus carriers continued an ongoing investigation by state and federal law enforcement which previously resulted in July 2015 charges against eight restaurant owners and managers in the State College, Pennsylvania area who were engaged recruiting, placing, harboring, concealing and transporting unauthorized aliens by use of buses, vans and other vehicles to and from restaurants in the State College area, where they would work and be housed during their employment. Those charges resulted in guilty pleas by all eight restaurant owners and the forfeitures of various property and cash.
Throughout the two-day conference, attendees benefited from 14 additional educational breakout sessions that included healthcare fraud, professional ethics, SIU safety, property fraud, interview and interrogation techniques and many more topics. Exhibitor booths provided attendees many idea sharing and new business opportunities.
An added feature at this year’s conference took on a more “social” tone with the inauguration of our Facebook contest, where attendees were invited to submit stories of the most bizarre fraud schemes they had encountered during the course of their career. The top three were then chosen, posted to the IFPA Facebook page and judged by number of “likes” received during the conference. By overwhelming majority, “The Dangling Needle” -— submitted by Jeremy McFadden, Senior Fraud Program Administrator for Erie Insurance — took top honors. His story recalled a Commercial Liability claim where a hotel patron allegedly reached into the cushions of a couch in her room, was stuck with a used hypodermic needle and had to be rushed to the hospital. As it turns out, this claimant had dozens of claims involving Slip n’ Fall and syringes in hands and feet, and even several claims involving children with used condoms and needles. You can’t make this stuff up.