Chapter 3 Defrauding Vulnerable People o David Caplowitz found that the poor were Being overcharged Sold inferior goods People victimized using Deceptive credit practices Complicated contracts Home repair fraud Lawsuits threatening wage garnishment o Occurs when contractors and repair persons rip off individuals for various types of repairs o Ex Unlicensed contractors are preying on Gulf Coast resident whose homes were ravaged by Hurricane Katrina and are in dire need for repair The FBI uncovered phony contractors who collected down payments on repairs bought the supplies and overnight stole the supplies back and left town Consumers can take some precautions to avoid home repair scams including o Get multiple estimates o Check for complaints with the Better Business Bureau o Never pay in full up front especially if cash is the only payment accepted o Make sure the contractor is insured and bonded Auto repair sales fraud o Early 1990s auto repair rip offs were the most frequently reported consumer complaint Estimated loss of 20 billion o Auto repair fraud includes 1 billing for services not provided 2 unnecessary repairs 3 airbag fraud and 4 auto insurance fraud What types of insurance can white collar crime occur in o Health o Auto 2009 the number one cause of death for Americans between the ages of 5 and 34 were auto accidents Over 2 3 million drivers and passengers received treatment in emergency rooms and the costs of those accidents including deaths and disabling injuries was around 70 billion o Life o Long term disability Insurance system crimes And a multitude of other types of insurance such as renters insurance natural disaster insurance and liability insurance 1 Crimes by agents against the insurance company lying about the clients income or assets to get approved for the insurance The agent benefits Investment focused crimes insurance agents commit crimes designed to get consumers to invest in various products 2 Viatical settlement fraud life insurance policies Promissory note fraud IOU interest scam Annuities fraud misrepresent annuities returns clients Could also falsify account information 3 Theft crimes against consumers when agents steal directly from insurance 4 Sales directed crimes agents brokers steal from consumers using fraudulent sales tactics Churning introduce new products service for change Stacking Persuading persons to buy more policies than are needed Rolling over Persuading customers to cancel an old policy and replace it with a more expensive better policy Misrepresentation Deliberately misinforming the customer about the coverage of the insurance policy Switching Where the sales person switches the consumers policy so that the coverage and the premiums are different from what the victim was told Sliding When agents include insurance coverage that was not requested by customers Chapter 4 Professional Crime o Professional occupations Characterized by higher education and training technical knowledge and skills and high degree of autonomy e g Medicine Law Ministry Professors and Scientists o Semi professional occupations Applied to some occupational groups such as secretaries nurses and paralegals support professions Medical crime o Physicians conflict of interest professional role conflicts with own private interests as an individual o Physicians fraudulent activities include Taking or offering kickbacks False and fraudulent billing Unnecessary procedures Rick Scott Governor of FL o 1990s Co founder and CEO of Columbia HCA o To this day the biggest Medicare fraud case in US o Billed Medicare Medicaid for unnecessary lab tests o Created false diagnoses to claim higher reimbursement o Charged for marketing and advertising under community education o 1997 Scott left without charges o 10 million severance and stock worth 300 million Medical crime o Substitute providers occur when the medical services were performed by an employee who was not authorized to perform the services o Upcoding billing for higher procedure codes than performed o Provision of unnecessary services occurs when health care providers perform and bill for tests or procedures that were not needed o Misrepresenting services occurs when providers describe the service differently on medical forms in an effort to gain payment for the services o Falsifying records occurs when providers change medical forms in an effort to be reimbursed by the insurance provider o Overcharging patients refers to situations where providers charge patients more than regulations permit o Family ganging trying to get a whole family in for checkups o Kickbacks occur when providers direct patients to other providers in exchange for a pecuniary response for the other provider o Co pay waivers occurs when providers waive the patients co pay but still bill the insurance company o Medical snowballing occurs when providers bill for several related services though only one service was provided o Unbundling billing for a particular services are submitted in pieces in order to charge more Fraud by the medical fields Fertility fraud o Do doctors commit more or less WCC Why do we as patients invest so much trust in a profession that runs rampant with illegal acts o Medicare federal program to aid elderly citizens with medical costs o Medicaid state program to aid the poor o Fraud vs abuse Fraud intentional criminal behaviors by physicians Abuse unintentional misuse of program funds o Fertility clinic scandal at the University of California Irvine o First report by staff and the university was accused of punishing the whistleblowers and ignoring claims o Second report to the press led to an interval investigation that revealed major breaches of policy human subjects violations financial frauds and unauthorized use of eggs to impregnate other patients o Doctors Ricardo Asch Jose Balmaceda and Sergio Stone o UC Irvine has paid more than 27 million toward at least 140 lawsuits o Stone convicted in 97 of fraudulently billing insurance companies served 1 year home detention o Balmaceda fled to Chile o Asch fled to Argentina Payne pg 64 75 Make sure to review the types of fraud both doctors and pharmacists engage in o Phantom treatment occurs when providers bill Medicare Medicaid or other insurance agencies for services they never actually provided o Pingponging occurs when patients are unnecessarily referred to other providers and bounced around various medical providers o Short counting when pharmacists dispense fewer pills