It’s on the news, in the papers, even on billboards: NJ is serious about fighting insurance fraud. New Jersey’s “Insurance Fraud Prevention Act” (the “Act”) has been hailed nationally as “model” legislation that is a useful tool of prosecutors and the State to curb insurance abuses.
Even the act’s stated purpose makes it crystal clear that the government is serious: The purpose of this act is to confront aggressively the problem of insurance fraud in New Jersey by facilitating the detection of insurance fraud, eliminating the occurrence of such fraud through the development of fraud prevention programs, requiring the restitution of fraudulently obtained benefits, and reducing the amount of premium dollars used to pay fraudulent claims.”
The Act gives teeth to the Department of Banking and Insurance by providing funding for fraud prosecutions, and creating a department of insurance fraud. Now, insurance fraud which is prosecuted civilly may also be prosecuted criminally. Further, the Act requires that the civil actions be referred to the criminal prosecutor to determine if criminal prosecution is warranted.
The Act provides for some stiff penalties too. In addition to the obvious loss of a license to practice medicine, a person found liable under the act can be fined $5,000 for the first violation, $10,000 for the second, and $15,000 for each subsequent violation. Further, those found guilty will pay not only restitution, but he actual costs incurred by the Dept. of Insurance to make its investigation, to pay it’s attorneys, and any costs incurred. Treble damages may also be awarded under certain circumstances.
Perhaps the only “wiggle room” available to lawyers and their clients is that the prosecuting entity must prove that the fraud was “knowing.” Physicians who filed claims for fictitious patients will satisfy the threshold, and will other similar cases or a “pattern” of fraud over some period of time.
More recently, the Appellate Division of the Superior Court has ruled that those being prosecute under the Act are not entitled to a trial by jury. Rather, the Court will be the sole arbiter.
In 2012, Ronald Chillemi, Acting Insurance Fraud Prosecutor, reported to Governor Christie the following:
|Total Referrals Received:||4709|
|Total Cases Investigated:||463|
|Number of Indictments & Accusations Filed:||47|
|Number of Defendants Charged:||59|
|Number of Defendants Convicted:||56|
|Number of Defendants Sentenced:||56|
|Number of Sentenced who Received Prison Sentence:||23|
|Total years of incarceration:||68|
|Total Criminal Fines and Penalties:||$105,685|
|Total Civil Fines and Penalties:||$20,789,699|
|Restitution imposed in Criminal Cases:||$29,135,018|
And the amount of litigation is growing, not slowing. Drive down the highway, and you can see signs threatening jail for insurance fraud. Those signs are funded by the State Dept. of Insurance.
In short, at the first instance when you are asked for records, or questioned by authorities, reach out to Romanowsky Law. Brian will assemble a team to protect you and your livelihood.