RD91 - 2011 Annual Report on the Insurance Fraud Program


Executive Summary:
As the Virginia State Police (VSP) Insurance Fraud Program (IFP) enters its fourteenth year, tremendous steps against the crime of insurance fraud continue to be made – due in large part to the partnerships that have developed among Virginia citizens, law enforcement, commonwealth’s attorneys and the insurance industry.

In 2011 that partnership submitted 2,035 notifications of suspected insurance fraud. Since 1999, more than 17,000 notifications have been referred to the VSP. Insurance Fraud special agents opened 252 cases in 2011 and made 230 arrests for insurance fraud and other related offenses, which is an 8 percent increase over 2010.

Over the 13 years the program has been operating, 4,115 fraud investigations have been undertaken, and agents have made a total of 2,148 arrests for insurance fraud and related offenses. In 2011, the IFP continues to have an increase in cases taken to trial by the commonwealth’s attorneys and successfully adjudicated.

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 2011 statistics show 1,259 property fraud-related notifications were received by the IFP. Notifications involving injury and casualty fraud totaled 627. Of those 627 notifications, 146 were for fraudulent workers’ compensation claims.

In 2011, the courts ordered restitution of more than $148,000. Court-ordered restitution since 1999 has surpassed $14 million. Suspected false insurance claims reported to the IFP, both attempted and collected, have topped $139 million.

The IFP’s sponsorship of the Red Flag training continued for a second year, bringing together commonwealth’s attorneys, VSP special agents and insurance company investigators to share information about the investigation and prosecution of insurance fraud. The three-day training was organized and presented by the Commonwealth’s Attorney’s Services Council with faculty representing all facets of law enforcement, the legal profession and the insurance industry.

In 2011, the IFP‘s “new media” marketing and public awareness efforts expanded to include a YouTube video contest targeting college students. The IFP teamed up with colleges across the commonwealth to spread the word that insurance fraud is a costly crime affecting all Virginia households. The “Dance Your Fraud Off” video contest was open to college students in Virginia and winners were posted on the StampOutFraud YouTube channel and Facebook Fan Page.

In addition to the video contest, banner advertising was used from February to July to reach out to consumers via the Internet and direct them to the StampOutFraud.com website for more information about insurance fraud. The ads received 33,102 click-throughs to the IFP website. In December, another element was added to the banner ads – “Take A Quiz.” That campaign is still underway, but preliminary results show the click-throughs to the website exceeded 1,560 for the first month.

In his second year in office, Governor Robert F. McDonnell signed a Certificate of Recognition proclaiming the week of May 1, 2011, 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 along with display and training activities.

We look forward to 2012 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 criminal activity, we can continue to Stamp Out Fraud in Virginia.