RD72 - 2010 Annual Report on the Insurance Fraud Program


Executive Summary:
Victories, both large and small, made 2010 another successful year for the Virginia State Police (VSP) Insurance Fraud Program (IFP), which continues to make significant strides against the crime of insurance fraud.

The greatest victory of 2010 was the Red Flag: Investigation and Prosecution of Insurance Fraud training. This five-day training session brought together IFP special agents, special investigation units from insurance companies and commonwealth’s attorneys. Funded by the VSP Insurance Fraud Program, the training provided team building activities as well as the opportunity to gain more knowledge about the role each of the disciplines plays in investigating, arresting and prosecuting the crime of insurance fraud.

As was emphasized in the training, the impact of insurance fraud can be felt on all levels of both the Virginia and U.S. economies. With the exception of tax evasion, no other white collar crime robs Virginians more than insurance fraud. Since the IFP was established in 1999, the insurance industry, law enforcement and private citizens have submitted more than 17,000 notifications of suspected insurance fraud to the IFP.

Insurance Fraud special agents opened 425 cases in 2010 and made 196 arrests for insurance fraud and other related offenses. Over the 12 years the program has been operating, 3,863 fraud investigations have been undertaken, and agents have made a total of 1,854 arrests for insurance fraud and related offenses. In 2010, more than 150 cases were presented to the commonwealth’s attorneys, an increase of almost 14 percent; and 132 cases made it to court, a 21 percent increase for 2010.

The IFP received 2,095 notifications in 2010, which is a slight increase over 2009. More than 1,700 of those notifications were received through the secure reporting system on the IFP Web site, http://www.StampOutFraud.com.

As required by Virginia law, the VSP investigates suspected fraud in property and casualty lines of insurance, as well as suspected workers’ compensation fraud. The 2010 statistics show 1,282 property fraud-related notifications were received by the IFP. Notifications involving injury and casualty fraud totaled 678. Of those 678 notifications, 183 were for fraudulent workers’ compensation claims.

In 2010, the courts ordered restitution of more than $181,000. Court-ordered restitution since 1999 has reached $14.1 million. Suspected false insurance claims reported to the IFP, both attempted and collected, have topped $120 million.

In his first year in office, Governor Robert F. McDonnell signed a Certificate of Recognition proclaiming the week of May 9, 2010 Insurance Fraud Awareness Week. It was presented to the insurance industry at the Virginia Chapter of the International Association of Special Investigation Units (VA IASIU) Annual Seminar. Insurance Fraud Awareness Week has been recognized in Virginia since 2002.

The IFP continues to partner with the Help Eliminate Auto Theft (H.E.A.T.) Program – sharing “billboard” space on the H.E.A.T. salvage examination vehicle and participating in VIN etching activities.

In 2010, the IFP expanded its “new media” marketing and public awareness efforts by producing three short “victory dance” videos based on real cases and posting them on the IFP’s YouTube Channel and Facebook Fan pages that were created in 2009. These viral videos posted on the Internet’s social networks are a unique way to educate the public about insurance fraud and promote the IFP’s “Sharp Eye” Reward Program.

We look forward to 2011 and continuing the fight against insurance fraud. As the number of notifications, arrests and prosecutions continues to rise, the IFP would like to thank everyone who has contributed to our success – citizens; commonwealth’s attorneys; local, state and federal law enforcement officials; legislators; and insurance industry personnel. Working together, with a “sharp eye” for criminals, we can continue to Stamp Out Fraud in Virginia.