This post appears as part of Goldstein Law Group’s blog series for International Fraud Awareness Week (November 16-22). This week, GLG attorneys address five types of insurance fraud the firm encounters on a regular basis.
“Straw” ownership is nothing new, but it is a growing trend in Florida and across the country as criminals attempt to thwart clinic laws. This makes it an excellent topic for today’s International Fraud Awareness Week blog series.
What exactly is straw ownership? In the insurance industry, it essentially involves setting up a false “store front” for a medical clinic to hide the true identity of the fraudster, as well as the crime.
As you can imagine, clinics handle large sums of money from insurance companies, offering an opportunity for criminals to cash in—if their scheme is elaborate enough. Florida and many other states require that clinics be licensed if not owned by a medical doctor or chiropractor, which invites government scrutiny into the business. When fraudsters can’t get licenses on their own, they often compensate someone with medical credentials to act as the clinic’s shadow owner.
This false representation of ownership allows them to submit fraudulent claims to auto and health insurance companies to reap the monetary benefits, which can sometimes reach millions of dollars. For instance, Goldstein Law Group has handled several cases in which illegal clinics file claims for both real and fictional patients involved in staged or fake auto accidents.
Sadly, the operation also means that those who visit the clinic in the hopes of receiving medical help may not be treated properly, potentially leading to even greater health problems. In other cases, the fraudsters may submit claims on behalf of fictional individuals in order to maximize their payment.
Because these crime rings are funded by deceiving the insurance industry, it is yet another reason why insurance companies are forced to pass along higher premiums to customers. Goldstein Law Group is doing its part by taking an aggressive approach to fighting cases of straw ownership. You can do yours by reporting suspicious activity to authorities.
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