| For Immediate Release Case # 09CF1143 May 6, 2009 |
Susan Kang Schroeder Public Affairs Counsel Office: 714-347-8408 Cell: 714-292-2718 Farrah Emami |
FOUR ARRESTED AND CHARGED WITH CONSPIRACY AND GRAND THEFT FOR $1.4 MILLION FRAUD SCAM INVOLVING INSURANCE COMPAINES, INCLUDING AIG
SANTA ANA – Four defendants were arrested today on charges of conspiring to defraud American International Group, Inc. (AIG) and another insurance company out of more than $1.4 million by illegally settling liens on Workers’ Compensation Insurance claims. A 201-count criminal complaint has been filed against Rene Montes, 41, Riverside, Hector Porrata, 45, Moreno Valley, George Martinez, 42, Apple Valley, Cara Cruz-Thompson, 46, Victorville. The felony charges include conspiracy, insurance fraud, medical insurance fraud, grand theft, embezzlement by fiduciary of trust, presenting fraudulent material statements to obtain compensation, failing to file tax returns, and aggravated white collar crime sentencing enhancement allegations for loss over $1.5 million, $500,000, and $100,000.
If convicted on all counts, the defendants face a sentence ranging from probation up to a maximum of approximately 70 years in state prison. The defendants are each being held on $1 million bail and must prove the money is from a legal and legitimate source before posting bail. They are scheduled to be arraigned tomorrow, Thursday, May 7, 2009, at the Central Justice Center in Santa Ana. The time and Department are to be determined.
When a Workers’ Compensation Insurance claim is filed, doctors and hospitals can put a lien on the claim to ensure payment by the insurance company. These doctors and hospitals can negotiate the lien or have a third party negotiate on their behalf. Montes, Porrata, Martinez, and Cruz-Thompson are accused negotiating such liens and meeting each other while working at a claims adjusting firm.
Montes is accused of later owning W.C. Surgery Centers in La Habra and W.C.S.C. & Associates in Riverside. Porrata and Cruz-Thompson are accused of going to work at a Workers’ Compensation Insurance company, Matrix Absence Management. Porrata, Martinez, and Cruz-Thompson are accused of eventually all working together again as Workers’ Compensation Insurance adjusters at AIG.
Between August 2003 and January 2006, the defendants are accused of conspiring to commit insurance fraud and grand theft by settling claims through the insurance companies with Montes’ businesses for liens he did not have the authority to collect. Montes is accused of sending more than 50 letters to Matrix Absence Management and AIG falsely claiming to have authority through W.C.S.C. & Associates to negotiate, settle, and collect payment on pending liens on behalf of doctors and hospitals. Knowing these claims to be false, Porrata, Martinez, Cruz-Thompson are accused of fraudulently settling Montes’ claims and paying him more than $1,170,000 from AIG and $310,000 from Matrix Absence Management. Montes is accused of failing to file tax returns on his fraudulent income.
On Feb. 2, 2007, AIG received a demand letter from a hospital for payment of an outstanding medical lien, which AIG determined had already been paid to Montes. As a result, AIG conducted an internal audit and discovered that Porrata, Martinez, and Cruz-Thompson were the only three claims adjuster in the entire company to have settled liens with Montes and reported it to the Orange County District Attorney’s Office (OCDA) and California Department of Insurance (CDI).