The Coalition Against Insurance Fraud, a Washington, D.C.-headquartered association of academics, consumer groups, insurers, and government agencies involved in the fight against insurance fraud, made its annual pronouncement of top insurance fraudsters for 2021, adding seven new members to the Insurance Fraud Hall of Shame.
Included in this year’s class are those who staged trucking accidents, drowned children, burned a neighborhood and mutilated women, all to collectively steal nearly $700 million of insurance proceeds. The fraud schemes spanned life, health and property and casualty lines.
Topping CAIF’s list is Damian Labeaud who led an organized ring of drivers and passengers, in consultation with a personal injury lawyer, to defraud commercial truckers who passed through New Orleans. After multiple setup wrecks and injury claims, federal prosecutors dismantled Labeaud’s scheme in court and secured multiple convictions or guilty pleas from ring members. Labeaud may spend up to five years in federal prison when sentenced. CAIF credited the dashboard camera in a commercial truck with providing the irrefutable evidence of at least one of the many staged accidents.
Imad and Bahaa Dawara’s arson to keep their failing hookah bar business afloat destroyed several properties in a scenic historic neighborhood in Philadelphia. The Dawara brothers owed several months of rent, and the landlord forced them to shut the business down. Having operated their business several years without insurance, the Dawaras bought a $750,000 accidental fire policy 16 days before the blaze they set in the basement in the middle of the night. The gasoline-fueled fire flared out of control, spreading flames and smoke to nearby businesses, hotels and apartment buildings. It took more than 400 firefighters to combat the fire. About 160 people were evacuated and several pets died. The neighborhood remained shut for months, and several restaurants closed permanently. The brothers were sentenced by a federal judge to nine years in prison and ordered to pay $22 million in restitution.
Ali F. Elmezayen made CAIF’s list for drowning his two autistic children, ages 8 and 13, in a car he drove off a Los Angeles fishing pier in an attempt to collect millions in life and accidental death proceeds on policies purchased two years and 12 days prior to the accident. Elmezayen’s ex-wife, who was also in the car, was rescued by fishermen and survived the accident. Elmezayen, who earned less than $30,000 a year in wages, paid $6,000 in life insurance premiums annually for two years in an attempt to avoid the insurer’s fraud investigation. A federal judge sentenced Elmezayen to 212 years in a federal prison.
Dr. Javaid Perwaiz, a Chesapeake, Virginia OB-GYN, performed many unnecessary hysterectomies and other surgeries to make himself $21 million richer from false and inflated insurance billings. He made phony cancer threats, performed up to 30 surgeries a day, botched many procedures and left patients with chronic pain, large scars and other complications. Perwaiz was sentenced to 59 years in a federal prison. The Virginia attorney general assisted in the case, providing reports from more than 150 women who were subjected to unneeded surgeries or induced labor without a valid medical reason.
Wade Walters, a Mississippi pharmacist, siphoned more than $510 million from health insurers, including Tricare, the federal military insurer, by selling hand-mixed compound medicines for pains, scars and vitamins. Tubes of the pain creams were billed to the insurer for as much as $14,000. Walters enticed service members into the scheme by claiming to make them part of a drug trial, paying them $300 a month for their participation, as they provided their health insurance information. According to CAIF, Walters’ criminal network expanded across the U.S. His scheme collapsed when one patient was paralyzed and hospitalized after ingesting one of Walters’ custom-made vitamins. Walters pleaded guilty in federal court and was sentenced to 18 hard years in federal prison and ordered to pay $287 million in restitution.
Joshua Ryan Joles, a key player in a Miami-based drug ring, stole drugs from cargo transports and pharmacies, then repackaged and resold lifesaving drugs for HIV, cancer and psychiatric illnesses at discounted prices to unwitting pharmacies and Medicaid and Medicare beneficiaries. Joles’ network reached to Florida, Arizona, Delaware, Washington and Puerto Rico. The ring’s scheme include removing labels and forging new labels so the drugs would appear to be legitimately obtained. Drugs were stored in unsafe conditions, and many were resold after their actual expiration dates. Joles pled guilty in federal court and drew a 76-month prison term. Other ring members were also prosecuted, convicted and jailed.
More than 250 pregnant women from Mexico believed they bought affordable health insurance from San Diego duo Melissa Alvarez Torres and Jose Luis Olmos Hernandez. The Mexican women crossed into the U.S. on work or tourist visas hoping to give birth in a safe and legal way to their babies who would gain U.S. citizenship by birthright. After collecting premium from the women, Torres and Hernandez registered them for maternity care through Medi-Cal, the state-run healthcare program for which, as foreign nationals, they were not eligible. Torres and Hernandez each face up to 20 years in federal prison and must repay $1.5 million. The investigation was prompted by one woman who called authorities to report she was a fraud victim when she discovered her insurance was through Medi-Cal and not the private insurer she had been told. Her baby was born in Mexico.