FLORIDA – Three chiropractors were sentenced for their involvement in a massive auto staging scheme based in Palm Beach and Miami-Dade counties that defrauded insurance companies, officials said Tuesday.
U.S. District Judge Kenneth A. Marra on Tuesday sentenced Kenneth Karow, 54, chiropractor, of West Palm Beach, Hermann J. Diehl, 44, chiropractor, of Miami, and Hal Mark Kreitman, 50, former chiropractor, of Miami Beach.
Karow was sentenced to 11 years in prison; Diehl was sentenced to nine years in prison; and Kreitman was sentenced to eight years in prison, authorities said
After a six-week trial in April, 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 joint federal and state law enforcement investigation, dubbed Operation Sledgehammer, has resulted in charges filed against 93 defendants for their participation in this automobile insurance fraud scheme. Of those 93 defendants, 57 have been charged, according to officials.
This has resulted in court-ordered restitution of more than $11 million to the defrauded insurance companies, and 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, officials said.
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, authorities said.
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.
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.