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Gallagher Announces More Arrests in Ongoing Investigation of Tampa-Area Fraud Ring


TALLAHASSEE – Florida Treasurer and Insurance Commissioner Tom Gallagher and Statewide Prosecutor Melanie Ann Hines announced today that six more individuals are facing fraud and grand theft charges stemming from a three-year investigation into a Tampa-area ring that staged dozens of auto accidents and bilked insurance companies out of thousands of dollars.

Four of the six suspects – four from the Tampa Bay area, two from Dade County – were arrested early this morning by Department of Insurance fraud investigators. Similar charges were filed last June against 22 other suspected members of the group, which insurance department investigators infiltrated by working undercover. More arrests are anticipated.

"Auto insurance fraud is a heavy burden on consumers, both financially and emotionally," Gallagher said. "Reforms that crack down on these costly insurance scams will be a top priority for me in the coming legislative session."

The six suspects named today are accused of helping stage and relocate accidents. They are Neira Craig, 46, Miami; Fidel Franceda, 41, Tampa; Rosalba Franceda, 37, Tampa; Harriet Cuevas Garvey, 47, Tampa; Maria Eugenia Reyes, 47, Tampa; and Hernando Sanchez, 61, believed to be living in Miami now. Garvey and Sanchez are still being sought.

The Tampa ring is suspected of staging about 30 minor, low-speed crashes. Investigators said the group would stage the accidents in a private location and then carefully scoop the debris and relocate the wreckage to a public roadway.

Gallagher said that after setting up a staged accident, the participants would call local police, file an accident report and then seek treatment for bogus injury complaints on the personal injury protection (PIP) portion of their automobile insurance policies. The Tampa ring is suspected of fraudulently billing 10 insurance companies for more than $396,000 in PIP claims and receiving at least $200,000 in payments.

Auto insurance fraud is estimated to add as much as $246 to the average family's auto policy premium. Gallagher said he is putting together a team of regulators to review the state's insurance fraud laws for ways to make it harder for such crimes to occur.

Under Florida law, all drivers must be insured for a minimum of $10,000 in PIP coverage, which pays for treatment of injuries resulting from an auto accident.

Insurance department investigators have been assisted in the case by the Florida Department of Law Enforcement, Hillsborough County Sheriff's Office, Nationwide Insurance Company and Progressive Insurance Company. Hines' office will handle the prosecution.

The insurance department's fraud division was originally formed in l976 by the Legislature to investigate automobile insurance fraud claims. In the past five years alone, investigators have received nearly 5,000 referrals of PIP fraud and made more than 500 arrests. The division's conviction rate for PIP fraud is nearly 80 percent.