NEW YORK— A former insurance agent who changed the addresses on his customer’s life insurance policies so he could embezzle $109,000 was arrested last week. Jian Zhang was arrested by the Special Prosecutions Division of the office of Queens District Attorney Richard A. Brown following an investigation by the New York State Insurance Department’s Frauds Bureau. Zhang, 50, of Elm Ave., Flushing, is accused of changing the addresses of customers so that mail in connection with their policies could be sent to his home address in Queens. Then he submitted loan requests against the life insurance policies and cashed checks for the money when he received them in the mail.
Ten insurance policyholders were victimized. Some of their accounts were targeted multiple times. The investigation revealed that Zhang arranged to have money paid to him in amounts ranging from $1,500 to $10,000. A former MetLife agent, Zhang endorsed and cashed a total of 29 checks diverted to his home address between 2007 and earlier this year. The scheme was uncovered after the insurance company noticed the large number of address changes and looked into the accounts. Zhang was then fired.
Zhang was charged with second degree forgery and grand larceny. He could be sentenced to up to 15 years in prison if convicted. A hearing will be scheduled in Queens County Court. The case is being prosecuted by Assistant District Attorney Rosemary Buccieri.
NYSIF’s La Pointe Addresses NY Dairy Leaders
Larry LaPointe, director of the New York State Insurance Fund Division of Confidential Investigations (DCI), addressed the executive committee meeting of the Northeast Dairy Association Safety Group, representing five dozen of the region’s major dairy companies, about workers’ compensation fraud, on December 3. As head of one of the state’s most successful special investigation units fighting insurance fraud, La Pointe led NYSIF DCI investigations of workers’ compensation and disability benefits insurance fraud resulting in 148 arrests and $20.7 million in restitution and estimated potential savings. In over a decade fighting workers’ compensation fraud, La Pointe and DCI have accounted for more than 1,300 arrests and over $166.5 million in restitution and future savings. “We provide our policyholders fraud protection in ways that no other carrier in New York can match,” Mr. LaPointe, a former prosecutor who previously directed the New York State Insurance Department Frauds Bureau, told the business leaders.
The Northeast Dairy Association Safety Group, one of three safety groups in NYSIF managed by Keevily Spero Whitelaw, Inc., started with NYSIF in 1949. Comprised of 60 New York dairy manufacturers, processors and distributors, its members are some of the more recognizable dairy businesses in New York State, including Tuscan, Farmland, Elmhurst, Byrne, Queensboro Farms, Dairy Barn stores, Stewart’s and Upstate Farms. It is part of a larger trade group started in 1928 and based in Syracuse, NY, the Northeast Dairy Foods Association, Inc. (NEDFA), comprised of 111 members including international businesses as well as small and family-owned companies.
“Ensuring conformity to workers’ compensation laws and regulations is important to our group,” NEDFA Executive Vice President Bruce Krupke said. “Fraud is not a regular occurrence, but it can happen and we recognize the need to practice fraud prevention among our members. We appreciate the state’s effort in fighting fraud.” Mr. Krupke said the trade group discusses fraud prevention with its members every year, but this is the first year they have asked NYSIF’s anti-fraud director to speak at their annual meeting.
Mr. LaPointe’s talk addressed some of the more common fraud fact patterns, or “red flags,” that lead to DCI cases. These include sketchy claims details or discrepancies in accident/injury reports, a claimant’s behavior or employment history, and the timing of a claim. “Generally, if you find clusters of ‘red flags’ connected with a claim, the claim should be examined to determine if the claimant has lied about any material fact,” Mr. LaPointe said.
In addition to claimant fraud, NYSIF aggressively investigates policy fraud, which can take on several variations including premium fraud by a policyholder to conceal payroll, the nature of a business, or number of employees, Mr. LaPointe said.
