A list of insurance fraud cases prosecuted in Minnesota and nearby states stemming from our Fraud unit's cases.
A 36-year-old man from Minneapolis, and leader of an outlaw criminal organization that has been active in North Minneapolis for several years, allegedly committed arson-related insurance fraud and mortgage fraud. Within a three-year period from 2004 to 2007, several houses in Minneapolis with ties to the organization were burned. The homes were owned by the man through associates of his organization who were "straw buyers" for the properties. When the property was sold at inflated prices to these straw buyers, the man received monies from both sides of the sales transaction, receiving profits as the seller and kickbacks from the straw buyers. The scheme provided monies to the man through both mortgage fraud and insurance fraud claims on the homes. The homes were destroyed by fire, and officials determined the cause to be arson. The estimated losses were over $1,000,000. Several federal search warrants were issued and executed in the fall of 2009. A cache of weapons were recovered at one of the venues. The Hennepin County Attorney's Office has charged the man in two separate complaints with one count of terroristic threats, two counts of prohibited person in possession of a firearm, and one count of mortgage fraud. Several of his associates have also been charged. The case was investigated with the Violent Offenders Task Force of the Minneapolis Police Department, Internal Revenue Service, Criminal Investigations and Federal Bureau of Investigation.
In February 2010, the owner of a business in Woodbury falsely reported to the Woodbury Police Department that he was assaulted and robbed by three assailants who stole his camera case with several expensive cameras and photography equipment. The 35-year-old man filed a claim with his insurance company stating that his total loss was $11,297. He told police officers that he rented photographic equipment from three different companies. However, each company reported that they had no business transactions with the defendant. A search warrant was executed on the defendant's office and located a camera and photographic equipment that were reported stolen. The defendant admitted that he committed insurance fraud and he was charged by the Washington County Attorney's Office. The investigation was conducted with the Woodbury Police Department.
In Mankato, a man employed as a valet at a casino submitted a claim for long-term disability based upon partial loss of vision. He began receiving long-term disability benefits of $770.00 each month from the insurance company. About six months later, he started a new job, but falsely claimed that he had no income on four different occasions. He obtained more than $34,000 from the insurance company and was charged with four counts of insurance fraud and eight counts of theft by the Blue Earth County Attorney's Office. He pled guilty and was sentenced to prison for 20 days and ordered to make restitution.
A man from Owatonna collected disability payments that he was not entitled to after returning to work. He failed to report his change in work status to the insurance company and collected approximately $22,000 in disability payments that he was not entitled to. He was charged with theft and insurance fraud by the Steele County Attorney's Office.
In December 2008, a 22-year-old woman falsely claimed that she fell down a flight of stairs when the heel of one of her boots had come off. A 52-year-old male acquaintance claimed he was present when the incident happened and attempted to stop the woman from falling. The woman said she was treated for her injuries at a medical center, where she also learned she was pregnant. After claiming to have suffered a miscarriage, the woman and man filed claims with the insurance company of the shoe manufacturer, asking for payment of their medical bills. During the claim process the woman asked for a $25,000 settlement. The medical center determined that she was intoxicated when she was seen by hospital staff and had been found wandering outside by her neighbors who called 9-1-1. She gave the officers from the Brooklyn Park Police Department responding to the scene three different stories, including that her male acquaintance had assaulted her. The medical center reported that she was not pregnant. The Hennepin County Attorney's Office charged both defendants with aiding and abetting insurance fraud.
A 54-year-old woman and 35-year-old man employed by an insurance company devised a scheme to defraud their employer by filing multiple claims for hail damage on the same residence. The woman was employed as an office manager and the man was employed an inspector and adjuster for the insurance company in St. Joseph. She issued a check to herself and her husband for an insurance claim in the amount of $17,195 for hail damage to her home. She sold the house to her co-worker without repairing the damage, but reduced the price of the home for the unrepaired hail damage. A second claim for hail damage on the same home was paid by the insurance company in the amount of $21,270. The office manager signed the check and the inspector acted as an adjuster on the claim. They were charged with aiding and abetting insurance fraud by the Stearns County Attorney's Office.
In May 2008, a severe thunderstorm produced large hail in Hennepin County and roofing contractors began contacting homeowners to determine the extent of hail damage. A 31-year-old roofing contractor inspected the roof of home in Maple Grove and advised the homeowner that there was damage to the roof, siding and fascia. In September 2009, the roofing contractor and another man made a second inspection on the home and were observed and photographed by another roofing contractor across the street pounding an unidentified tool to the surface of the roof. When asked what they were doing, the roofing contractor stated that they were making the hail damage more pronounced. The insurance company paid $9,909 to replace the roof as a result damage of caused by the defendant. The contractor was charged with insurance fraud and damage to property by the Hennepin County Attorney's Office.
A 50-year-old woman who owned a real state closing services company in Forest Lake misappropriated and converted more than $1.2 million from real estate transactions for her own personal use. From January 2007 to September 2009, she took funds that were intended to pay off previous mortgages on at least 42 real estate transactions. The scheme unfolded when a Forest Lake bank discovered that the funds put in her closing escrow account were never used to pay off her mortgage on an apartment building. The Washington County Attorney described the investigation as the largest theft case in Washington County history and filed 34 separate charges for theft, forgery and racketeering. The investigation was conducted with the Forest Lake Police Department and the department's Market Assurance Division.
A licensed real estate salesperson and insurance agent who worked for a title and real estate service company in Burnsville engaged in a pattern of insurance/mortgage fraud using proceeds intended for mortgage insurance or title insurance. The 40-year-old woman misappropriated, converted and embezzled more than $220,000 in proceeds by issuing checks for her own benefit from trust and title insurance accounts. The Dakota County Attorney's Office charged her with five counts of theft, three counts of theft by swindle, eight counts of insurance fraud and one count of racketeering.
In conjunction with this case, a 34-year-old man from Lakeville, who was employed as a realtor, and a 36-year-old man, who was a mortgage loan officer and broker, conspired with the Burnsville insurance agent in a mortgage fraud scheme. The insurance agent organized a criminal enterprise using sellers, buyers, real estate agents and mortgage brokers. She structured real estate closings to fraudulently obtain mortgage monies of hundreds of thousands of dollars. The insurance agent was the main defendant and charged with the aforementioned felony charges. The other two defendants were charged with theft by swindle and one was also charged with racketeering by the Dakota County Attorney's Office. The main defendant pled guilty to three counts of theft over $435,000. The investigations were conducted with the department's Market Assurance Division.
A 30 year-old man from Bemidji, who owned a mortgage company in Ramsey, and a 37 year-old woman employed as a loan processor at his company, knowingly facilitated a large scale mortgage fraud scheme with other defendants. The defendants found "straw buyers" to purchase residential property, offering them $5,000 for each property that they purchased. The woman used her parents to purchase a total of 16 properties as straw buyers. The mortgage company withheld information from the mortgage company and allowed the loans to be processed. They opened title insurance policies to protect the purchaser and lender on the mortgages, which subsequently were defaulted. The investigation was conducted by the Carver County Sheriff's Office and both defendants were charged with two counts of mortgage fraud by the Carver County Attorney's Office.
A 24-year-old woman from St. Cloud received workers' compensation benefits as a dependant on her father's insurance company, while falsely claiming she regularly attended St. Cloud State University as a full-time student. One of the requirements for her to receive the benefits was attending college as a full-time student. She received more than $12,500 in workers' compensation benefits when she was not enrolled as a student and/or enrolled as a part-time student. The Sherburne County Attorney's Office charged her with workers' compensation fraud.
During a three-year period, a man from Superior, Wisconsin, improperly and illegally obtained his father's workers' compensation benefits from the Minnesota Department of Labor and Industry after the death of his father. The 69-year-old man received his father's bi-weekly workers' compensation benefits totaling more than $79,800 from May 2006 to May 2009. The man failed to notify the State of Minnesota of his father's death and stole his father's identity to illegally obtain workers' compensation benefits. The man was charged with two counts of workers' compensation fraud and two counts of insurance fraud by the Ramsey County Attorney's Office.
In December 2006, a St. Paul man reached a stipulation for settlement on a workers' compensation claim with the State of Minnesota for $13,000, but failed to notify the Minnesota Department of Labor and Industry that he mistakenly received a $55,571 settlement check. The error was discovered by an audit in October 2008 and the man refused to respond to any inquiries. The man had deposited the check in his bank account and depleted the account through large cash withdrawals within five months. The man was charged with theft by the Ramsey County Attorney's Office and has pled guilty.