Office of Statewide Prosecution

Statewide Grand Jury Report

FINAL REPORT
December 8, 1998
IN THE SUPREME COURT OF THE STATE OF FLORIDA -- CASE NUMBER 90,703
(This document has been re-formatted for the Internet)

I. INTRODUCTION

The Fourteenth Statewide Grand Jury was impaneled on August 19, 1997, and was seated in the Second Judicial Circuit: Leon County. The panel was drawn from around the State. The Grand Jury met on thirteen (13) occasions to investigate allegations of multi-circuit, organized criminal activity. The Grand Jury's original term expired after twelve months, but was extended to February 19, 1999. The Grand Jury is adjourning early, subject to recall, if necessary.

The purpose of this report is to record for posterity the work of this Grand Jury, with the hope that its collective voice will be heard and that the citizens of this State will benefit from its efforts.

II. INVESTIGATIONS

The Grand Jury was called to primarily investigate cases involving insurance fraud, with an emphasis on workers' compensation premium fraud, health care claim fraud, insolvency fraud and consumer fraud. We issued thirteen (13) indictments charging seventy-eight (78) defendants and five (5) businesses with a total of five hundred and eight (508) crimes. The indictments allege the following criminal offenses: racketeering; conspiracy to racketeer; grand theft; insurance fraud; organized fraud; insurance solicitation, workers' compensation fraud; failure to secure workers' compensation; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealer; unauthorized transaction of insurance; false evidence of compliance and false entry in books of corporation.

Additionally, in a case unrelated to insurance fraud, the Grand Jury returned one Indictment charging two individuals with one count of first degree murder and kidnaping each.

During our term, the Statewide Prosecutor has worked with the Department of Insurance's Division of Insurance Fraud, the Department of Labor, the State Comptroller's Office and numerous private insurers in the investigation of many insurance fraud cases. The Statewide Prosecutor has filed seventy-seven (77) additional criminal charges against fourteen (14) criminal defendants in seven (7) direct informations.

Taken together, the criminal defendants are responsible for the theft of over forty million dollars ($40,000,000) from a variety of private insurers in the State of Florida all of which is ultimately passed on to the citizens. The attached chart sets forth the number and nature of the charges, as well as dispositions achieved to date. (The names of individuals who have not yet been arrested do not appear on the chart.)

The following case did not reach conclusion and is still under investigation by law enforcement: OSWP Case No. 1997-0433-CFB.

III. REPORTS AND PRESENTMENTS

The Grand Jury issued four reports during its term: (1) Workers' Compensation Premium Fraud; (2) Insolvency Fraud; (3) Health Care Claim Fraud; and (4) Fraud in the Non-Standard Insurance Industry.

We have been advised that the Department of Labor has implemented some of our recommendations for reform detailed in the Workers' Compensation Fraud report. We also understand the legislature has passed new legislation regarding workers' compensation fraud amending and strengthening Chapter 440, F.S., which incorporated many of the recommendations in our report.

Finally, we had the opportunity to review evidence concerning patient brokering in Florida. While time limitations have prevented us from thoroughly investigating these issues, it is clear to us that patient brokering and its potential for fraud poses a serious problem for our citizens. As such we recommend that this topic be studied further by a subsequent Statewide Grand Jury.

IV. CONCLUSIONS AND ACKNOWLEDGMENTS

While the work which we were asked to perform has been difficult, the issues complex, and the schedule exhausting at times, we have enjoyed our service and are proud of our contributions to the State of Florida.

We urge the respective agencies and private insurers to continue this important work. Insurance Fraud affects every citizen of this State and must be diligently pursued by law enforcement.

We wish to thank the following individuals and their respective offices for assisting us in the performance of our responsibilities:

The Honorable Lawton Chiles, Governor
The Honorable Bob Butterworth, Attorney General
The Honorable Bill Nelson, Insurance Commissioner
The Honorable Robert Milligan, Comptroller, Florida Comptroller's Office
The Honorable N. Sanders Sauls, Presiding Judge
The Honorable J. Lewis Hall, Jr., Alternate Presiding Judge
The Honorable John E. Crusoe, Alternate Presiding Judge
The Honorable Dave Lang, Clerk of the Circuit Court
The Honorable Larry Campbell, Leon County Sheriff
Tom Long, Leon County Court Administrator

Respectfully submitted to the Honorable N. Sanders Sauls, Presiding Judge, this ______ day of November, 1998.

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EDWARD D'ARCY ADAMS, III
Foreperson
Fourteenth Statewide Grand Jury of Florida

___________________________________
PHILIPPA KAY BOTTOMS
Recording Secretary
Fourteenth Statewide Grand Jury of Florida

I, MELANIE ANN HINES, Legal Adviser, Fourteenth Statewide Grand Jury for the State of Florida, hereby certify that I, as authorized and required by law, have advised the Grand Jury which returned this Final Report this __________ day of November, 1998.

__________________________________
MELANIE ANN HINES
Statewide Prosecutor
Statewide Grand Jury Legal Adviser
Fourteenth Statewide Grand Jury of Florida

I, Oscar R. Gelpi, Legal Adviser, Fourteenth Statewide Grand Jury for the State of Florida, hereby certify that I, as authorized and required by law, have advised the Grand Jury which returned this Final Report this __________ day of November, 1998.

___________________________________
OSCAR R. GELPI
Chief Assistant Statewide Prosecutor
Assistant Legal Adviser
Fourteenth Statewide Grand Jury of Florida

THE FOREGOING Final Report was returned before me in open court, this ________day of November, 1998.

__________________________________
N. SANDERS SAULS
Presiding Judge
Fourteenth Statewide Grand Jury of Florida