Insurance Scandal Rocks Houston and New Jersey

United States Attorney Kenneth Magidson filed a case against a chiropractor and 4 other individuals in an insurance scam worth approximately US$3 million. This case covers 31 counts of fraudulent claims against auto insurance companies like AIG, Farmers, State Farm, and USAA.

Chase Lindsey, the chiropractor and his cohorts recruited persons who were in auto accidents and order medical treatments that were completely unnecessary. Lindsey also forwarded bills to the insurance companies for treatments that were never done. From 2007 to 2009, Lindsey and his team were able to collect over $1.5 million from the insurance companies. If convicted, all 5 face 10 years in jail and fine of at least $250,000 each for conspiracy and another 20 years in federal prison and another $250,000 per person for each of the 30 other counts.

In Somerset, New Jersey, Maria Demeter pleaded guilty to insurance fraud after she was caught lying on her auto insurance applications. She was ordered to do 50 hours community service and was placed on probation. Her lies were about living alone when she was in fact living with her husband. She lied because her husband is ineligible for company insurance and she was paying a lower premium as a single adult. She also made an insurance claim in 2010 for over $4,000 using the false information.

Demeter may have to pay almost $40,000 to the New Jersey Business and Industry Association which provides affordable Insurance to its members. She will also have to pay for court fees. Her charge was noted as 3rd degree insurance fraud and the exact amount to be charged to her will be known by February 2013.