Three More Defendants Sentenced in Staged Automobile Accident Scheme
Ninety-Two Defendants Have Been Charged to Date in Operations Sledgehammer I-VI
|U.S. Attorney’s Office November 05, 2013|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Jeff Atwater, Florida Chief Financial Officer, Florida Department of Financial Services; and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announce that defendants Aaron Freedlander, 51, licensed Chiropractic Physician, of Broward County, Florida; Luis Ivan Hernandez, 40, clinic owner, in Miami-Dade and Palm Beach County, Florida; and Daviel Castro, 27, staged accident participant, check casher and recruiter, of Palm Beach County, Florida, were sentenced yesterday by U.S. District Judge Kenneth A. Marra for their participation in an automobile insurance fraud scheme involving staged automobile accidents. Aaron Freedlander was sentenced to 40 months in prison, followed by two years of supervised release; Luis Ivan Hernandez was sentenced to 108 months in prison, followed by three years of supervised release; and, Daviel Castro was sentenced to 58 months in prison, followed by two years of supervised release. In addition, Freedlander was ordered to pay $900,697.92 in restitution; Hernandez was ordered to pay restitution in the amount of $4,232,248.04; and Castro was ordered to pay $1,359,208.73 in restitution. Freedlander will also be required to surrender his chiropractic license.
Each of the defendants previously pled guilty to one count of conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349; and multiple counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2. In addition, Hernandez and Castro were charged with one count of conspiring to commit money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1), all in violation of Title 18, United States Code, Section 1956(h). Hernandez was also charged with multiple counts of money laundering, and Castro was charged with one substantive count of money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), and 2.
According to court documents, between approximately October 2006 and December 2012, the conspiracy members staged automobile accidents by recruiting individuals to participate in the accidents. Daviel Castro served as an accident participant and also recruited others to participate in staged accidents. The participants were referred to as “Perro” and “Perra” or “Macho” and “Hembra.” Thereafter, the clinic owners, including defendant Luis Ivan Hernandez, caused the submission of false insurance claims through chiropractic clinics that were controlled by members of the conspiracy. To execute the scheme, the true owners of the chiropractic clinics recruited individuals who had the medical or chiropractic licenses required by the state to open a clinic to act as “nominee owners” of the clinics. The co-conspirators also hired complicit chiropractors, including Aaron Freedlander, and therapists who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme. Luis Ivan Hernandez was the “true owner” of six of those clinics.
Furthermore, according to court records, once fraud proceeds were received from the insurance companies, the clinic owners, including Luis Ivan Hernandez, also recruited individuals, including Daviel Castro, to help the clinics launder the insurance proceeds. Sentencing documents showed that Castro cashed checks worth $27,899.35 in laundered proceeds.
Starting with Operation Sledgehammer I in June 2011 and including the defendants charged in Operation Sledgehammer VI, 92 defendants have been charged for their participation in this automobile insurance fraud scheme. Of those 92 defendants, 56 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $5 million to the defrauded insurance companies. Thirty-six defendants have been charged by the Palm Beach County State Attorney’s Office.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. The federal cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña and the state cases are being prosecuted by the Palm Beach County State Attorney’s Office.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.