NEW YORK, N.Y., October 20 – A joint investigation conducted by the New York State Insurance Department, Otsego County District Attorney John Muehl, and State Fire Administrator James A. Burns has resulted in a guilty plea to felony insurance fraud in connection with a suspicious fire at a dairy barn.

The investigation was the first conducted under a new pilot program initiated by Superintendent of Insurance, Howard Mills, according to the Insurance Department. Under this program, Mills explained, the state lends an experienced insurance fraud prosecutor to local counties to act as an assistant district attorney. In this case, the fraud prosecutor was charged with responsibility for investigating and evaluating the merits of the fire and corresponding insurance claim. William Andrews, an attorney with the Insurance Departments Office of General Counsel, served as a special assistant district attorney to the Otsego County DAs office, and presented the case to a grand jury that brought indictments for arson, insurance fraud, and witness tampering against Peter Mravlja, of Decatur, N.Y.

According to the guilty plea, Mravlja called 911 on April 20, 2003 to report a fire in the dairy barn at Mravlja Farms, owned jointly by Mravlja and his father. Thereafter six local fire departments and 53 volunteer firemen responded and battled the barn fire for almost seven hours. During the course of the fire, one fireman was physically injured and 23 beef calves perished. The farm subsequently closed.

The fires origins were listed at the time as undetermined because an electrical malfunction could not be ruled out as a potential cause. Otsego County Patrons Co-Operative Fire Relief Association of Schenevus, New York, the insurer, paid Mravlja Farms a total of $143,555.81 to compensate the Mravlja family for the losses they incurred. Given a confidential tip that the Mravlja Farms fire may not have been an accident, the association subsequently asked the New York State Insurance Departments Frauds Bureau to revisit the case.

The Office of Fire Prevention and Control joined the investigation, assigning Investigator James Ryan to review the cause and origin of the fire.

The joint investigation resulted in the three-count indictment, followed by the negotiated guilty plea to one count of felony insurance fraud. The terms of the plea agreement are that Mravlja repay the carrier the sum of $50,000, perform a period of community service, and serve an anticipated five-year felony probation period.

Mills stated, The department is ready and willing to offer whatever resources it can to stop insurance fraud. This pilot program fills a gap between the ability and the desire to stop bogus claims. By offering our dedicated fraud fighters, we can assist the counties with the tools they need to stop the cheats. I am proud to announce the creation of this program and its rapid success. Through cooperation and partnerships we will continue to win the fight against insurance fraud.