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Personal Accident Injury Fraud Becoming Rampant in Florida

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In the state of Florida, which has already garnered a national reputation for Medicare fraud and abuse, a Jacksonville health clinic was shut down over charges of personal injury protection (PIP) fraud. The Florida Department of Financial Services says that the owner of the illicit health clinic, Sandy Morales, staged car crashes, and then, Morales subsequently paid other criminal conspirators to pose as auto accident victims, who by necessity then sought treatment for dubious, if non-existent injuries at Morales’ health clinic.

According to investigators, Morales then turned around and filed $100,000 in false claims to 20 different insurance companies, say investigators. Prosecutors have also alleged that Morales’ fraud was hardly an isolated incident but rather, Morales actively marketed and find participation by an additional twelve (12) illegally operating PIP clinics in the Jacksonville area. Ultimately, the arrest of Morales, despite the magnitude of his criminal enterprise’s reach, was only one of another 179 such organized criminal fraud arrests made in the state since September of 2012. These arrests have led to 115 convictions and over $1 million in restitution, coverage for investigative costs, and fines.

More disturbingly, however, is the revelation that this is the second arrest for Morales, who was also charged with a March 2010 fraudulent accident that resulted in $46,000 being wrongly billed to insurance companies. Should Morales be convicted on his outstanding charges, he will face up to 45 years in prison.

This is not the only such instance of personal injury protection fraud existing in the state of Florida. Other recent notable cases of personal accident injury fraud involving medical professionals includes:

  • A two-year investigation has led to five arrests in a Central Florida PIP fraud scheme. Investigators posing as patients were able to prove that a clinic in Bradenton was charging insurance companies for non-existent injurie in the end of its investigation
  • The owner of a Miami PIP rehabilitation center was arrested in connection with allegedly staging accidents, and then fraudulently billing insurance companies to cover medical costs in scheme similar to that perpetrated by Morales
  • Orlando Chiropractor Dr. Troy Godsey was arrested and charged with operating a PIP scheme at his clinic, Spine Health Solutions.
  • The personal injury protection fraud problem in Florida have reached levels of notable national prominence that the PIP and other fraud problems were recently featured on the A&E television channel’s series, American Takedown

The National Insurance Crime Bureau states that Florida has some of the highest rates of personal injury protection frauds in the nation.

Legislation passed in 2012 under HB 119, however, has led to a 13.6% decrease in fraud claims. Specifically, HB 19 under Florida law stipulates that all injured parties are required to visit a physician, chiropractor or dentist (as needed) within 14 days of an accident. Otherwise, they won’t be able to use their PIP coverage.  Under the law, physicians convicted of insurance fraud could lose their licenses for up to five years, and from receiving PIP insurance coverage for ten years. Meanwhile, insurance companies are now allowed to investigate a fraud claim for up to 90 days (the previous limit was 60 days).

One consequence of these commonly perpetrated types of fraud cases is that the cost is ultimately passed on from the insurance companies to their customers in the form of higher premiums since they must recoup the expenses of investigating and prosecuting these illegal actions.



What You Need to Know About Accident Fraud