The Insurance Fraud Bureau of Massachusetts recently published its Annual Report outlining the work it did to combat insurance fraud in the Commonwealth during 2011. As the only fraud bureau in the entire country organized and funded by the insurance industry, the IFB celebrated its 20th anniversary last year by recording its highest number of cases being referred to prosecution.
Here are some of the highlights from the report:
- In 2011 the Bureau referred some 205 cases for prosecution, the highest number in the organization’s history;
- In June of 2011, the IFB received its 50,000th referral;
- Overall, in 2011, 187 individuals were charged;
- In addition, 213 individuals reached a final disposition in 2011, including 42 convictions;
- The IFB Seminar entitled Insurance Fraud, Money Laundering and Terrorist Financing held on June 23, 2011 was attended by 136 individuals from insurance companies, the banking community, public agencies and the private sector;
- The IFB also hosted the Fraud Directors Conference in October 2011. Thirty-four individuals representing 22 state fraud bureaus were in attendance.
- A meeting was held in November 2011 with representatives of the major workers’ compensation carriers in Massachusetts to better assist in efforts to fight workers’ compensation premium, classification and claimant fraud. Seventeen representatives from eight insurance companies participated;
- An IFB investigator was one of the 113 recipients recognized by the Massachusetts U.S. Attorney’s Office at the Law Enforcement/Public Service Awards Ceremony held in March 2011 which recognized outstanding federal, state and local law enforcement officials;
- Eleven new billboards publicizing the fight against insurance fraud were posted in the Cities of Lawrence and Chelsea;
- IFB management participated in and/or presented at the Fraud Directors Conference, the Insurance Fraud Managers Conference, Travelers SIU Awareness Day, Andover Companies, Insurance Auditors Association of New England, Quincy College, Worcester State College and local police new recruit and roll call training.
Referral Activity
In 2011, the Insurance Fraud Bureau received a total of 3,583 referrals. It declined to investigate 2,262 of those cases and accepted a total of 1,319 in which to pursue.
The main ways in which the IFB receives referrals to cases are through direct submissions by the insurance carrier or from the public via its IFB hotline at 1-800-32FRAUD or through the IFB website. In addition, the IFB says that it also receiving an increasing number of referral to fraud cases from the National Insurance Crime Bureau website.
Automobile claims continue to make up the lion’s share of fraud referrals the IFB receives. The Bureau says that approximately automobile insurance claims total approximately 73% of the total number of referrals received.
Interestingly, in 2011 the IFB saw a drop in the number of referrals for the first time in three years. It says that the number of yearly referrals to its organization peaked in 2007.
Case Activity
The IFB activated 854 cases during 2011 with 663 closing before going to prosecution. Some 205 cases were eventually referred to prosecution and a total of 148 cases were completed with prosecution and 28 were declined.
The Bureau says the inventory of cases awaiting assignment and the active workload of the Bureau changes on a daily basis. Generally, the type of fraud involved in the case determines the speed and process by which it is resolved. The IFB does note, however, that cases referred to prosecution are still considered an active case for an IFB prosecutor who often aids the prosecution with location of witnesses, witness interviews, delivery of subpoenas and other aspects of the investigation and prosecution of a fraud case.
Cities and towns with the highest caseload activity in 2011 include Boston, Springfield/Holyoke, New Bedford/Fall River, Worcester, Lynn, Lawrence and Randolph.
Prosecution Activity
The Bureau referred 205 cases to prosecution in the past year, resulting in 187 individuals being charged. Another 95 individual cases were disposed of either by pre-trial probation, acquittal, dismissal or nolle prosequi. The Bureau says another 76 individuals were prosecuted without a finding. A total of 42 individuals were convicted as a result of the IFB’s efforts in 2011.
The IFB also emphasized that with the creation of its Community Insurance Fraud Initiative program in 2003, an ever-growing number of cases are now also referred to the offices of district attorneys as well. In 2011, 174 of the 205 were referred to district attorneys. Seven cases in all were referred to the U.S. attorney’s office and 24 to Attorney General Martha Coakley’s office.
Access the Insurance Fraud Bureau’s entire annual report here.
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