RD130 - 2013 Annual Report on the Insurance Fraud Program

Executive Summary:
The Virginia State Police (VSP) Insurance Fraud Program (IFP) is holding steady in the fight against the crime of insurance fraud, with the number of notifications received by the IFP and arrests for 2013 remaining relatively unchanged.

The impact of insurance fraud can be felt on all levels of the economy in both Virginia and the United States. With the exception of tax evasion, no other white-collar crime robs Virginians more than insurance fraud.

In 2013, the IFP received 1,994 notifications of suspected insurance fraud, just slightly more than the number of notifications received in 2012. Since 1999, when the Program began, more than 21,000 referrals have been made to the VSP. Insurance fraud special agents opened 457 cases in 2013, which is consistent with the number of cases opened in 2012, and made 360 arrests for insurance fraud and other related crimes.

Court-ordered restitution was more than $255,000 in 2013, which brings the total of ordered restitution since the program began in 1999 to more than $18 million. Suspected false insurance claims reported to the IFP since 1999, both attempted and collected, totaled more than $159 million.

Over the 15 years the program has been operating, 5,031 fraud investigations have been initiated, and agents have made a total of 2,282 arrests for insurance fraud. In 2013, the IFP presented 96 cases to the commonwealth’s attorneys, and 300 cases were adjudicated – more than double the number of cases adjudicated in 2012. The large number of adjudicated cases can be attributed to additional charges being brought about after being reviewed by the commonwealth’s attorney or it may reflect cases opened in previous years that went to court in 2013.

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 2013 statistics show 1,117 property fraud-related notifications were received by the IFP. Notifications involving injury and casualty fraud totaled 551, of which 36 percent were for worker’s compensation claims, the same percentage as 2012. Vehicle fraud is the largest percentage in both categories.

The IFP’s sponsorship of the Red Flag Training continued for a fourth year bringing together commonwealth’s attorneys, VSP special agents and insurance company investigators to share information about investigating and prosecuting insurance fraud. The four-day training was organized by the Commonwealth’s Attorneys Services Council.

Former Governor Robert F. McDonnell also issued a proclamation declaring the week of May 5, 2013, as Insurance Fraud Awareness Week. The proclamation 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 by Virginia’s governors since 2002.

Banner advertising was used from November 2012 to July 2013, reaching out to consumers via the Internet and directing them to the StampOutFraud.com website for more information about insurance fraud. The ads had more than 10.7 million impressions, which mean the ads were served on the page and had the possibility of being seen by 10.7 million viewers. More than 174,000 viewers actually clicked on the ads and went to the site.

We look forward to 2014 and continuing the successful fight against insurance fraud. The Virginia State Police would like to thank everyone who has contributed to our success .The Insurance Fraud special agents and analysts, the insurance industry, commonwealth’s attorneys and Virginia’s citizens are all to be commended for their efforts to stamp out fraud in the commonwealth. Working together, with a “sharp eye” for criminals, we can continue to Stamp Out Fraud in Virginia.