FLORIDA – A jury in West Palm Beach on Tuesday convicted three chiropractors and recruiter who staged vehicle accidents for their roles in a massive staged automobile accident scheme in Florida that defrauded insurance companies, officials said.
After a six-week trial, jurors convicted the defendants – Kenneth Karow, 54, chiropractor, of West Palm Beach, Hermann J. Diehl, 44, chiropractor, of Miami, Hal Mark Kreitman, 50, former chiropractor, of Miami Beach, and Joel Antonio Simon Ramirez, 29, staged automobile accident recruiter, of West Palm Beach – of multiple felony charges, officials said.
The accidents were staged from October 2006 to December 2012 in Palm Beach and Miami-Dade Counties.
The latest convictions are part of a federal and state investigation dubbed Operation Sledgehammer, which has resulted in automobile insurance fraud.
The joint federal and state law enforcement investigation, dubbed Operation Sledgehammer, has resulted in charges filed against 93 defendants for being participants in this automobile insurance fraud scheme.
Of those 93 defendants, 57 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $11 million to the defrauded insurance companies, authorities said.
With Tuesday’s verdicts, 51 of those 57 defendants have been convicted by jury or by guilty plea. The remaining six defendants are fugitives. Another thirty-six defendants have been charged by the Palm Beach County State Attorney’s Office
After the vehicle accidents occurred, the defendants and co-conspirators would file false insurance claims through chiropractic clinics they controlled, according to officials.
The owners of the chiropractic clinics recruited people who had medical or chiropractic licenses to open a clinic and act as “nominee owners,” officials said.
Officials maintain that the defendants, including Simon Ramirez, also recruited individuals, whom they referred to as “Macho” and the “Hembra” or the “Perro” and “Perra,” to participate in the accidents, and others to help the clinics launder the insurance proceeds.
Chiropractors, including Diehl, Karow and Kreitman, and therapists prescribed and billed for unnecessary treatments and/or for services that had not been rendered, authorities said.
Twenty-one clinics participated in this scheme, officials said.
The defendants face a maximum sentence of 20 years in prison for each count of conspiracy to commit mail fraud, substantive mail fraud, conspiracy to commit money laundering, and substantive money laundering.
Sentencing for all four defendants is set for July.
Federal officials say there are more than 7,000 insurance companies that collect more than $1 trillion in premiums each year. The cost for insurance fraud that is not health-related is estimated to be more than $40 billion a year, officials said.