OFFICE OF THE INSURANCE FRAUD PROSECUTOR - … · New Jersey Department of Banking and Insurance...
Transcript of OFFICE OF THE INSURANCE FRAUD PROSECUTOR - … · New Jersey Department of Banking and Insurance...
OFFICE OF THE
INSURANCE FRAUD
PROSECUTOR
NJSBA Annual Meeting and Convention
Handling the Insurance Fraud Case
May 18, 2017
State of New Jersey Departments
1. Agriculture
2. Attorney General’s Office (Law and Public Safety)
3. Banking and Insurance
4. Children and Families
5. Community Affairs
6. Corrections
7. Education
8. Environmental Protection
9. Health
10. Human Services
11. Labor and Workforce Development
12. Military and Veterans Affairs
13. State (Lt. Governor)
14. Transportation
15. Treasury
Department of Law and Public Safety
• Division of Criminal JusticeoStatewide Prosecutions
oOversight of County Prosecutor’s Offices
• Office of the Insurance Fraud Prosecutor
• Division of LawoRepresentation of all State Departments and Agencies
• Division of Consumer AffairsoProfessional Boards
▪ Board of Medical Examiners
▪ Board of Chiropractic Examiners
▪ Board of Nursing
▪ Board of Pharmacy
Office of the Insurance Fraud Prosecutor
• Created in 1998 by the Automobile
Insurance Cost Reduction Act (AICRA)
• Mission: to conduct full and fair investigations to
ensure successful criminal prosecutions, civil
adjudications, licensing sanctions or other
appropriate dispositions and to serve as the focal
point for the coordination of all anti-insurance
fraud activities statewide.
Office of the Insurance Fraud Prosecutor
• Private Insurance
oHealth
oAuto
oWorkers Compensation
oRate Evasion
• Medicaid
oHealth
oPatient Protection
oFalse Claims Act
New Jersey Statutes
• Health Care Claims Fraud N.J.S.A. 2C:21-4.2
oMaking or causing to be made a false, fictitious,
fraudulent or misleading,
oStatement of material fact in,
oOmitting (or causing to be omitted) a material fact from,
oAny a record, bill, claim or other document,
o In writing, electronically, or any other form,
oAttempts to submit, submits, or causes to be submitted
or attempts to cause to be submitted
oFor payment or reimbursement for health care services.
New Jersey Statutes
• Health Care Claims Fraud N.J.S.A. 2C:21-4.3
oPractitioner
▪ Second Degree – knowingly commits
▪ Third Degree – recklessly commits
▪ Fine up to five times the pecuniary benefit obtained or sought to
be obtained.
oNon-Practitioner
▪ Second Degree – knowingly commits five or more acts and at
least $1,000
▪ Third Degree – knowingly commits
▪ Fourth Degree – recklessly commits
New Jersey Statutes
• Insurance Fraud N.J.S.A. 2C:21.4.6o Knowingly makes, or causes to be made, a false, fictitious, fraudulent
or misleading statement of material fact,
o Omits a material fact from, or causes a material fact to be omitted from,
o Any record, bill, claim, or other document,
o In writing, electronically, orally or in any other form,
o That person attempts to submit, submits, causes to be submitted or attempts to cause to be submitted,
o As part of, in support of or opposition to, or in connection with:
▪ Claim (payment, reimbursement or benefit)
▪ Application
▪ Payment
▪ Affidavit, certification, record or other document
New Jersey Statutes
• Insurance Fraud N.J.S.A. 2C:21.4.6
oSecond Degree – five or more acts and at least $1,000
oThird Degree – otherwise
oFourth degree – motor vehicle subsection
▪ Operates a MV in this state, policy in another state, principal
residence/garaged
New Jersey Statutes
• Commercial Bribery N.J.S.A. 2C:21-10
o Solicits, accepts, or agrees to accept any benefit as consideration,
o For knowingly violating or agreeing to violate a duty of fidelity.
• “Duty of Fidelity” – not defined in NJ case law
o United States v. Lee, 359 F.3d 194 (2004) – “a person who owes a
duty of fidelity or loyalty may not engage in self-dealing or
otherwise use his or her position to further personal interest rather
than those of the beneficiary”
New Jersey Statutes
• Use of Runners N.J.S.A. 2C:21-22.1
oRunner
▪ Person who, for pecuniary benefit, procures or attempts to
procure a client, patient or customer,
▪ At the direction of, request of or in cooperation with a provider,
▪ Whose purpose is to seek to obtain benefits under a contract of
insurance or assert a claim against an insured or an insurance
carrier for providing services…
▪ Does not include individuals who procures (or attempts) clients,
patients or customers through public media.
Basic Investigation – Private Insurance
• Referral from an Insurance Carrier
oDetermine if OIFP should keep the case
▪ Criminal – keep or send to county
▪ Civil – Bureau of Fraud Deterrence
▪ Other disposition – licensing, regulatory, etc.
oSubpoenas
oSearch Warrants
oCharging – complaint summons or warrant
oIndictment
oGlobal Plea Offers
Basic Investigation – Medicaid
• Referral from the Medicaid Fraud Division
oDetermine if OIFP should keep the case or decline
• Same investigation as Private Insurance
oDetermine whether to bring a False Claims Act matter
Contact Information
Acting Insurance Fraud Prosecutor
Christopher Iu
609-633-6978
John Butchko
Chief of Investigations
State of New Jersey
Department of Banking and Insurance
Bureau of Fraud Deterrence
A thirty-five year veteran of New Jersey State government, John began his career with the
New Jersey Department of Banking and Insurance becoming New Jersey’s first insurance fraud
investigator appointed, when the Division of Insurance Fraud Prevention was established in 1983.
Over the next fifteen years, John worked at the Division of Insurance Fraud Prevention
serving as Investigator and Supervising Investigator before rising to the rank of Deputy Director
in 1990. In 1998 the Division of Insurance Fraud Prevention and the Insurance Fraud Unit in the
New Jersey Attorney General’s Office, Division of Criminal Justice, were merged into the newly
established Office of the Insurance Fraud Prosecutor, under the authority of the New Jersey
Attorney General.
John transferred to the new Office of the Insurance Fraud Prosecutor, where he served as
a Special Assistant to the Prosecutor and Chief of the Liaison Section until 2010 when the
Department of Banking and Insurance re-established a section to investigate insurance fraud,
named the Bureau of Fraud Deterrence.
John returned to the Department of Banking and Insurance and on July 1, 2012, was
appointed to the position of Chief of Investigations for the Bureau of Fraud Deterrence. In
December 2016 John assumed the position of head of the Bureau and its staff of 94 Investigators,
Managers, and support personnel.
John is a founding member of the New Jersey Special Investigators Association serving as
its first President from 1989 – 1994 and as a member of the NJSIA Board of Directors until 2010.
John was named a Life Member of NJSIA in 2012. Additionally, John was the recipient of the
NJSIA Annual Achievement Award in 1993, 1995, and 1996 and the NJSIA Presidents Award in
2000, 2003 and 2015.
In 2005, John was presented with the International Association of Investigative Units
Outstanding Service Award.
In his spare time, John serves on the Board of Directors for Villa Victoria Academy, a K-
12 all girls Catholic school in Ewing, New Jersey. He also owns and operates Poet’s Farm, a choose
and cut Christmas tree farm in Cream Ridge, New Jersey where he lives with his wife Ginny.
Acting Insurance Fraud Prosecutor Christopher Iu Acting Attorney General John J. Hoffman appointed Christopher Iu to serve as New Jersey’s Acting Insurance Fraud Prosecutor in December 2015. Under New Jersey law, the Insurance Fraud Prosecutor is charged with investigating all types of insurance fraud and coordinating the anti-fraud activities of state and local investigating agencies and prosecutors. The insurance Fraud Prosecutor also leads New Jersey’s Medicaid Fraud Control Unit, which recovers large sums annually on behalf of the state through criminal and civil actions. In this position, Prosecutor Iu supervises a staff of 100 and manages an annual budget of $20 million.
Iu joined the Attorney General’s Office in 2011, serving as Special Assistant to the Attorney General. Prior to that, he was an Assistant Prosecutor in the Essex County Prosecutors Office.
In his capacity as an Assistant Prosecutor, Iu was assigned to the Juvenile Unit, Trial Team and Homicide Squad, and prosecuted hundreds of cases including narcotics distribution, aggravated assaults, armed robberies and homicides. Prior to becoming an Assistant Prosecutor, Iu clerked for the Honorable Joseph A. Falcone, J.S.C., then Assignment Judge of Essex County.
In the Office of the Attorney General, Iu works with the Juvenile Justice Commission, Office of Homeland Security and Preparedness, Division on Civil Rights, and on special projects with the Division of Criminal Justice and the Division of State Police. Iu also serves as a liaison with the Governor’s Policy Office and other departments of State government. Iu received his undergraduate degree in 2000 from the State University of New York at Binghamton, and his law degree in 2003 from Seton Hall University School of Law.