g4s compliance & investigations - mo-msia.com · investigator summary: on august 20, 2009 g4s...

G4S Compliance & Investigations Utilizing Online Investigative Tools to Uncover and

Preserve Digital Evidence to Manage Risk

Not Everyone thinks this is a problem!

• One of five U.S. adults — about 45 million people — say it’s

acceptable to defraud insurance companies under certain

circumstances. Four of five adults think insurance fraud is unethical.

(Four Faces of Insurance Fraud, Coalition Against Insurance Fraud,

2008)

Fraud Fighting Toolbox

• Detection of Red Flags

• Open communication with the insured, claims, and investigative functions to

share critical information

• Claims & Compensability Investigations

• Database searches – ISO, hospital sweeps, background searches

• Social Networking (SONAR)

• Surveillance

• SIU Investigations

What is SONAR?

SONAR is a web based investigation solution that uses fully trained

and experienced internet investigators to meticulously examine your

subject’s internet footprint through our “deep dive” techniques. This

enables our investigators to gather information not typically

discovered through conventional investigation methods.

What is SONAR?

SONAR’s ability to assemble significant online networking, social

media and internet specific information provides a cost savings

solution and greater knowledge of the subject’s interests and

activities.

“Today, claimants enjoy the ability to advertise themselves, and we offer the

best opportunity to take notice.” – Michael J. Malone, President, G4S

Compliance and Investigations

Why SONAR?

Social Media usage grew considerably between 2005 and 2010.

86% percent of adults age 18-29 use

the internet.

26% of adults 65 or older use the

internet, up from 5% just five years

ago.

Why SONAR?

• Personal, self-incriminating data posted on social networking sites has grown significantly

• Searches are global in scope

• Provides validation for surveillance expenses

• Use SONAR as a stand-alone solution or in conjunction with follow-up surveillance to maximize investigation efforts and results.

• Reduce reserves

• Decrease loss ratio

• 1-2 week turn around time (working to reduce)

SONAR vs Background Check

• How is SONAR different from a Background Check?

– A Background Check will provide you with high level detail about

a claimant. You will receive the exact report that G4S receives

from the database.

– A SONAR provides a “snapshot” of the Background Check,

summarizing the information obtained. A full copy of the

background check is not included.

Every $1 invested in workers compensation

anti-fraud efforts has returned $6.17, or

$260.3 million total in 2006-2007.

(California Insurance Department, 2007 annual report)

Investigation Makes Good Business Sense

Surveillance Assignment Checklist

Recent Photo of the Subject, Known Aliases, ID information

Unique physical features (tattoo, scars, hair, excessive weight)

Social Networking Activity (Facebook, My Space, Twitter, Etc.)

Medical limitations stated by claimant (bending, lifting, driving)

Orthopedic devices (cane, brace, wrap)

Scheduled Physician/Legal appointments

Fields of Employment (construction, Nursing, laborer)

Residences of relatives (if in close proximity to claimant)

Criminal Records (local, state, federal)

Motor Vehicles (cars, boats, jet skis, motorcycles)

Professional Licenses (general contractor, realtor, broker)

Bankruptcies, Tax Liens or Judgments

Claimant Statement & ISO Data (prior claims)

Significant family dates (children’s birthdays, mother’s birthday)

Children’s sporting / recreational events

Locally frequented establishments (church, restaurants, bars)

Hobbies (golf, fishing, gardening, civic & social organizations)

Level of suspicion towards investigative activities

Social demographic (welfare, blue collar, white collar, socialite)

Tips For a Claim Examiner

• Never conduct an investigation without first securing all

available intelligence on the subject from your file or

available database resources.

• You should know WHY, WHERE, and, if possible,

WHEN to conduct the investigation.


• The interview should obtain:

– substantial background data on the claimant

– detailed injury information

– detailed information on the claimant’s physical capabilities prior

to and after the injury

– detailed work/occupational duties


• Detailed background data on the claimant may

contribute to a successful future surveillance

– It can provide additional leads for the field investigator

conducting the surveillance

– The information may allow the investigator to properly plan for

the surveillance


• Detailed information on the claimant’s injury will provide the

investigator with additional information that may be utilized in the

field while obtaining video documentation of the claimant’s activity

• Detailed information concerning the claimant’s physical capabilities

prior to the injury can aid the field investigator in utilizing appropriate

leads to plan for the surveillance assignment


• One of the most important documents in the claim examiner’s file

you may wish to request is a medical narrative report by either the

claimant’s primary care provider, or a report by the IME (QME, AME,

DME) medical provider.

• A report that reflects a medical exam within the past 30-60 days is

best!


• Is the claimant engaged in an activity that would contradict the

physical restrictions and/or limitations provided by themselves or

their medical provider?


• The claim representative should have a detailed discussion with the

case manager or field investigator to effectively communicate the

objectives of the investigative assignment and any specific tasks

associated to the field assignment

• The claim representative should communicate, in advance, any

potential legal issues, considerations or restrictions prior to sending

the investigator into the field to conduct the assignment

Typical Court Test

• Courts typically consider the following four factors when considering

legality of enhanced view surveillance

• Position of the investigator

• Position of the claimant or subject

• The type of device used during the surveillance

• The circumstances under which the view was obtained

Privacy Rights Outside the Home

• Private Clubs

• Private Acts in Public Areas

• Balconies

• Restaurants

• The Workplace

The Test of Reasonableness

• Souder v Pendleton Detectives, Inc. • “constantly shadowed, watched, eavesdropped and trespassed”

• Alabama Electric Co-op v Partridge • Videotaped family moving about inside their home

Tortuous Stalking

• Harassment

• Trespass

• Intrusion Upon Seclusion

• Invasion of Privacy

– Wolfson v. Lewis (Inside Edition),

– 924 F. Supp. 1413 (E.D. Pa 1996)

Unreasonable Investigation

• Intrusion into Seclusion

• Intentional Infliction of Emotional Distress

• Defamation

• Trespass

State Stalking Statutes

• A person commits this crime when he:

– Engages in a course of conduct towards another person; including, following the

person under circumstances which demonstrate either of the following;

• An intent to place a person in fear of reasonable bodily injury; or

• An intent to cause substantial emotional distress to that person.

– 18 Pa. C.S.A. s.2709

State Stalking Statutes

• A person commits the offense of stalking if the person willfully on

more than one occasion follows or is in the presence of another

person without legal purpose and with the intent to cause death or

bodily injury or with the intent to cause emotional distress…

• NC Statute 14-277.3

Surveillance Pre-Trial Discovery

Impeachment

vs.

Substantive Evidence

Surveillance Pre-Trial Discovery

• Minority Rule:

– Not discoverable, protected as work product; impeachment

purpose

• Majority Rule:

– Surveillance evidence is relevant for substantive as well as

impeachment purposes

– But defendant may conduct deposition of plaintiff before

disclosure

– Snead v. American Export, 59 F.R.D. 148 (E.D. Pa 1973)

A Professional Investigator Must…

…avoid exposures to:

– Allegations of harassment

– Detection

– Invasion of privacy

Evidence from Surveillance

• Under normal operations evidence from the surveillance exists in

three forms:

– eyewitness testimony

– written documentation

– photographic documentation

Remember

All actions of the investigator and all aspects of the investigation must be:

• REASONABLE

• ETHICAL

• LEGAL

Conviction Notice

Type of Claim (LOB): Workers' Compensation

SYNOPSIS OF CLAIM: The wife (beneficiary) of the Claimant (deceased), was collecting the Claimant’s survivor benefits after his

death. She then passed away on November 6, 2008; however, the insurance company was never notified of her death. The

checks continued to be issued into 2009 and were cashed by their daughter. The benefit checks received and cashed totaled

$4,578.12. She had been cashing the checks at a local market for several months when she moved from the area.

INVESTIGATOR SUMMARY: On August 20, 2009 G4S Compliance & Investigations was contracted to conduct a special

investigation. SIU Richard Ellwood and SIU Kevin Humber conducted the investigation, but did not locate the Claimant’s daughter.

SIU did interview the owner of the convenience store where the checks were cashed and learned the daughter continued to cash

the checks at the store a few months into 2009; however, the store owner was not aware of the death of the Beneficiary until some

time later. On November 15, 2009, SIU Eve Shelton filed a state fraud referral to the West Virginia Office of the Insurance

Commissioner. As a result of the state fraud referral, the West Virginia OIC requested a copy of the claim file on January 19,

2010. SIU Shelton obtained a copy of the file and submitted a documented fraud package on February 1, 2010.

SIU Specialist Eve Shelton conducted periodic follow up with the WV Insurance Commission and provide additional information as

needed. On August 2, 2012 SIU Shelton learned that the case against the daughter was heard by the Cabell County Grand Jury

on June 18, 2012. The daughter was indicted on six counts of forgery and six counts of uttering. On February 6, 2013 SIU Shelton

was advised that the daughter pled guilty to two counts of forgery and one count of uttering. The guilty plea was entered on

September 6, 2012. She was sentenced to 1 – 10 years, which was suspended to 30 days in jail and three years probation. She

was also ordered to pay $4,562.86 in restitution to the carrier.

Arrest Notice

TYPE OF CLAIM (LOB): Disability

SYNOPSIS OF CLAIM: The Claimant alleged a cumulative trauma injury / loss to her left foot resulting from prolonged weight

bearing with a date of loss of August 31, 2010.

INVESTIGATIVE SUMMARY: On February 29, 2012, the G4S Compliance & Investigations’ Special Investigations Unit was

requested to review the claim file for possible criminal insurance fraud violations. The claims examiner stated she identified red

flags associated with this claim in that the Claimant may have been concurrently employed while receiving indemnity benefits, as

evidenced in recent surveillance video. Preliminary investigation and our initial SIU suspect file review confirmed reasonable belief

of possible fraudulent activity and therefore warranted filing a state fraud referral / FD-1. On March 30, 2012, Investigations

Manager Joe Morgan submitted the G4S internal mandatory reporting form to our SIU compliance department for immediate filing

of a state fraud referral/FD-1 to the California Department of Insurance and the San Bernardino County District Attorney’s Office.

SIU Analyst, Sarah Whigham completed and filed the state fraud referrals / FD-1s on April 2, 2012.

In response to the state fraud referral, the San Bernardino County District Attorney requested a copy of the claim file on April 12,

2012. SIU Joe Morgan obtained the claim file documents and completed the claim file demand package, which was submitted to

the DA on May 31, 2012. SIU Morgan conducted periodic follow up and provided additional information as needed. On April 13,

2013, SIU Morgan learned this case had been submitted to the court for the prosecution of the claimant for violation of 664/118 of

the California Penal Code - Attempted Perjury and 1871.4(a) (1) of the California Insurance Code - Workers’ Compensation

Insurance Fraud. The case number is FWV1301124. The Claimant was arrested on April 4, 2013. The Claimant has not yet

submitted a plea in regard to the court case and the arraignment of the claimant is pending.

Conviction Notice


SYNOPSIS OF CLAIM: The Claimant alleged that while servicing an account in the field, he was assaulted and stabbed. He

alleged while going out to a storage shed behind the customer’s location, two gang members confronted him and demanded that

he relinquish his money and his cell phone. When he refused, he was stabbed by one of the assailants. The claim was reported

and accepted and the Claimant began receiving workers’ compensation benefits. The police responded to this incident and based

on the factors involved, the case was referred to the “Gang” unit for further investigation. During the course of the investigation the

Claimant confessed he staged the incident to impress a female employee with whom he had a romantic interest. He admitted

there were no assailants and his wound was self-inflicted. The Claimant was arrested and charged with filing a false police report.

He pled guilty to this allegation and was charged with a misdemeanor and paid $9,000.00 in restitution. Based on this information,

workers’ compensation benefits were terminated and the claim was denied. The Claimant was subsequently terminated on

December 4, 2010 in a good faith employment action based on the Claimant’s violations of company policy regarding poor

conduct.

INVESTIGATIVE SUMMARY: On January 6, 2011 G4S Compliance & Investigations was contracted to conduct a suspect file

review. SIU conducted the suspect file review and determined that this claim met the threshold for reporting to the DOI as a

suspicious claim. On January 18, 2011 SIU Mindy Marzec completed the state fraud referral / FD-1 and submitted it to the

California Department of Insurance as well as the Ventura County District Attorney’s office. The suspect file review also

determined that there was sufficient evidence to pursue possible criminal prosecution for insurance fraud. On March 17, 2011, SIU

completed a documented fraud package and submitted the package to the Ventura County District Attorney.

On May 17, 2012 SIU learned that the Claimant was arrested on two counts of insurance fraud, one count of grand theft and one

count of attempted perjury. On August 17, 2012 he pled guilty to all four charges. On May 16, 2013 the claimant was sentenced to

pay $5,600.00 in restitution to Sedgwick CMS. The claimant paid $4,800.00 of the restitution at sentencing and will pay the

remainder of the restitution owed at $150.00 per month starting on November 15, 2013. The Claimant was also ordered to pay a

$120.00 fine to the State Restitution Fund. In addition, the Claimant was ordered to serve 90 days of jail time in the Ventura

County Jail. The imposition of sentence for the jail time was suspended until the hearing which is scheduled on August 16, 2013 to

determine if the Claimant qualifies for a work furlough program. The Claimant accepted all the terms and was released on

probation.

Conviction Notice


SYNOPSIS OF CLAIM: This claim involves a now 49 year old female who is employed by the insured as a Senior Office Worker.

It is alleged that on February 2, 2011, while performing her usual and customary duties she injured her lower back, right lower leg,

neck, and ankle when descending a flight of stairs. The Claimant apparently lost her balance, causing the mishap. Since the date

of the alleged incident, the Claimant retained counsel and remained on TTD status.

INVESTIGATIVE SUMMARY: The G4S SIU office noted red flags after initial surveillance operations were conducted which

depicted the claimant as active and without apparent restriction. This was contradictory to obtained medical reports whereas the

Claimant complained to treating physicians her physical condition was very limited. Additional surveillance was requested and

granted due to the discrepancy between these two reports. Several more days of surveillance further verified the Claimant’s

physical activities did not match any physicians’ reports. During this period, the Claimant was observed washing, operating her

motor vehicle, shopping, carrying bags of groceries and other shopping items, lifting, bending and also ambulating in a normal and

unrestrictive manner.

As preparation was under way for the Claimant’s deposition, our office met with defense counsel to discuss questions which need

to be asked of the claimant regarding her physical limitations. During thorough questioning by the defense counsel, the Claimant

appeared to have fabricated much of her testimony, depicting herself as being physically unresponsive to medical treatment, and

being unable to perform but limited physical tasks.

After review of the Claimant’s testimony with defense counsel, the SIU Director, Shaun La Tray prepared a Documented Referral

to the Los Angeles County District Attorney’s office, citing the alleged material misrepresentations committed by the Claimant.

Shaun La Tray and Linda Cass presented the case to the District Attorney’s Office and after investigation, the District Attorney’s

Office, filed charges against Ms. Heredia for Insurance Code Violations. An arrest warrant was issued as the Claimant

surrendered to authorities on November 13, 2012. She was arraigned on one (1) Felony count of Insurance Fraud, 1871.4, and

one (1) Felony count of 664.118(a), Attempted Perjury. She pled Not Guilty to both charges.

Thank You.

Questions or Comments?

Brad Tracy

Sales Manager, Central Region

G4S Compliance & Investigations

[email protected]

630.433.6053

g4s compliance & investigations - mo-msia.com · investigator summary: on august 20, 2009 g4s...

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