32 Texas “Quacks” Arrested for Fraud

Dozens of South Texas residents have been arrested as the result of “Operation Sitting Duck,” aptly named due to Aflac’s mascot. Future arrests are still possible, due to the fact that several other indictments remain partially sealed.

Details of the alleged insurance fraud scheme were made public in indictments that were unsealed on June 16th in the U.S. District Court in McAllen.

According to the Claims Journal, Federal prosecutors stated the next day that they had charged 32 Texans with scamming Aflac out of over $3 million. These people are said to have faked a variety of minor injuries, which include everything from burning an arm while making tortillas to injuring a leg while feeding a dog.

“Simply put, this fraud scheme is a robbery without a gun of the self-insured American taxpayer,” said Cory B. Nelson, the FBI special agent in charge in San Antonio. “The FBI considers it to be a direct threat to the critical U.S. health care infrastructure designed to be available for Americans in their time of medical need.”

Among the accused are a police officer, a former Hidalgo County jail worker, teachers and other county employees. They all face fraud and conspiracy charges for making the fraudulent minor injury claims.

Those people who were charged bought accident insurance with the help of two Reynosa, Mexico doctors, who filed minor injury claims that they thought would be too small to draw suspicion. According to the indictments, the doctors then received small kickbacks in return, about $10 to $15 for each supposed injury.

“Greed, simple and pure, has allegedly driven a police officer, teachers, county government employees and others to participate in a multi-million dollar insurance fraud,” said U.S. Attorney Jose Angel Moreno in a prepared statement.

The indictment also states that between July of 2001 and April of 2010, those arrested submitted about 21,600 fraudulent claims. The doctors would then coach the filers to keep the injuries minor so they could to avoid requests from the insurer for X-rays or medical tests.

“The indictments stemming from the alleged fraud ring in Texas followed lengthy investigations and cooperation with law enforcement to maximize results,” said Jon Sullivan, spokesman for the Columbus, Ga.-based insurer.

According to The Monitor, the police officer who was arrested, Hidalgo officer Steven Betancourt was released on an unsecured bond along with nine other defendants after a detention hearing in federal court.

Betancourt allegedly filed five false claims: cutting his chin after he tripped on a sidewalk, hurting his leg while feeding a dog, burning himself with hot water, burning his arm while burning trash, and dropping a hammer on his toe. All of these claims also supposedly took place between July of 2006 and May of 2009.

Following Betancourt’s arrest, Hidalgo Police Chief Vernon Rosser stated that he is suspended without pay. Rosser also noted that “you could have pushed me over with a feather when they said they had an indictment for him.”

Also mentioned among the indictments was Homer Cedillo, who worked at the Hidalgo County Jail looking for solutions to inmate overcrowding. Sheriff Lupe Treviño stated that he accepted Cedillo’s resignation after learning of the investigation.

“He’s a good guy — he really is — but he got caught up with this (scheme) and that was that,” Treviño said. “If I was called to testify about his character, I’d say he was a good guy, he just messed up.”

Cedillo allegedly filed a fake claim in June of 2007, when he says he hurt himself after slipping on wet cement.

The sheriff added that he sent a bus and 10 deputies to aid FBI agents in rounding up the suspects.

Because none of the 10 defendants at the detention hearing in federal court on the 17th had any prior criminal records, Ormsby gave each one a $20,000 unsecured bond, which allowed them to remain free as long as they appear at all scheduled court hearings.

Each count of conspiracy and wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. Prosecutors stated that anyone who may be convicted will also have to pay back the fraudulently obtained cash.