State refers record insurance fraud cases for prosecution [The New Hampshire Union Leader, Manchester]

Jul. 14—CONCORD — State investigators have referred a record 22 cases of suspected insurance fraud for prosecution by state and federal authorities over the past year, according to state officials.

Insurance Commissioner Christopher Nicolopoulos said these cases, representing nearly $283,000 in fraudulent claims, are expected to produce individual indictments in the coming months.

"Our record of prosecutions shows that New Hampshire has zero tolerance for insurance fraud," Nicopoulos said.

Brendhan Harris, fraud investigator in charge at the Insurance Department, said the state prosecutes any fraud over $1,000 as a felony.

"With the rising costs of automobile repairs, for example, the threshold for a felony insurance fraud charge is very low," he said.

This latest report includes two workers' compensation claims, one homeowner's insurance claim, one disability insurance claim and 18 cases of suspected auto insurance fraud.

Each month, the fraud unit receives an average of 25 referrals, opening cases on about 12% of them.

During the state budget year that ended last June 30, the office received 298 fraud referrals, opened 37 cases and referred 22 for prosecution.

Harris, a retired Virginia Beach, Va., police officer, came to the Insurance Department 15 years ago to run the four-person unit.

"One hundred percent of cases we have ever submitted have been prosecuted. We don't want the reputation of a unit that goes after and charges fraud, and then ends up with cases that fail to come to pass," Harris said.

New Hampshire does not have a mandatory auto insurance requirement.

Harris said the most common form of insurance fraud here involves motorists who get insurance coverage after being in an accident and then claim they were covered.

"We solve almost 100% of those cases," Harris said.

Unlike some law enforcement agencies, the New Hampshire Insurance Department has its own subpoena power, so it can immediately ask for and quickly obtain bank or cell phone records that confirm or refute someone's claim they had insurance, Harris said.

In 2020, Harris' office broke the complicated case of Leo Rush, a 76-year-old Pelham man who pleaded guilty in federal court to creating four bogus insurance companies that sold fake surety bonds.

Over seven years, Rush got $633,000 in payments selling phony bonds valued at more than $23 million.

Harris recalls holding a document in his hands that confirmed Rush sent a fake bond to a Connecticut client from a Federal Express store on the New Hampshire border.

"It doesn't get any better than that when you have that piece of paper which nails the case you've been working on for months," Harris said.

Sophisticated fakes

In 2020, Jacqueline Masse of Hampton got 18 months in federal prison for attempting to defraud restaurants and their insurance companies of $400,000, claiming she or a member of her family got seriously ill after eating their food.

Masse was business manager at her husband's law firm and doctored legitimate medical records of his client to file the claims.

Harris said the break in that case came when he called Elliot Hospital and confirmed Masse had claimed as her own a medical record number that belonged to her husband's client.

Since COVID-19, Harris said the level of sophistication of these fraud claims has ramped up.

"People are working from home. They have more time on their hands and access to software to create these incredible documents," Harris said.

"I have never seen so many fake records that look legitimate come across my desk in the past year."

What also changed since the pandemic is many insurance carriers do not send their agents to look into claims in person but rely on documents sent to their offices, Harris said.

Nationally, insurance fraud (non-health insurance) is a $40 billion-a-year criminal enterprise that costs the average U.S. family between $400 and $700 per year in increased insurance premiums, according to the FBI.

About 75% of insurance industry professionals believe that 10% or more of all claims have some element of fraud, according to the 2020 Friss Insurance Fraud Report, a company that provides fraud and risk detection software to insurance companies.

Some industry professionals believe the number of claims with some element of fraud has nearly doubled since the COVID-19 pandemic.

klandrigan@unionleader.com

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