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Oops! The September/October issue of The John Cooke Fraud Report (How the West Fights Fraud, page 16) erroneously reported that the State of Alaska does not have a fraud bureau. The following information was forwarded by Rick W. Jones, Chief Investigator for the State of Alaska Division of Insurance Fraud Investigation Unit. Our apologies to Rick and his associates.
According to Jones, not only does the State of Alaska have a fraud bureau, but Alaska laws mandate the reporting of insurance fraud and provide fraud reporting immunity. The ultimate goal of this unit is to educate the public as well as insurance and medical industry personnel that fraudulent insurance activity cannot be tolerated. Those who would perpetrate fraud need to weigh the consequences of their illicit actions.
The fraud investigation unit consists of two investigators, Jones and John F. Jansen, both of whom boast many years of experience in investigation and law enforcement. The unit answers directly to the director and deputy director of the State of Alaska Division of Insurance but is considered a separate unit. Certain rules of procedure apply when information is shared between the fraud investigation unit and other agencies.
These fraud investigators may be called upon to investigate anything from fraudulent claims submitted by policyholders or claimants and medical bills submitted by providers to violations of state statutes or regulations by insurance companies or agents. In addition, since the Alaska Division of Workers’ Compensation does not have its own investigator, the fraud investigation unit is also responsible for investigating cases of suspected workers’ compensation fraud.
The State of Alaska has given the fraud unit investigators a special commission to obtain and execute public search warrants and the authority to use subpoena duces tecum to collect information. All investigations are conducted following the criminal rules of procedure and Alaska Rules of Court to ensure that all facts and evidence collected are admissible in a court of law regardless of whether a case is being processed criminally or administratively.
Guidelines for the investigative unit are defined by Alaska Statutes Title 21, while the workers’ compensation guidelines are defined by Title 23. Criminal penalties and classes of offense are determined by the amount of money involved. Amounts of up to $500 are generally classified as misdemeanors. Those involving over $500 are considered felonies. But, sometimes, in a effort to save time and money, the investigation unit will agree to prosecution of cases involving up to $5,000 as misdemeanors, providing restitution is ordered for the full amount of the loss. The suspect is often more willing to accept a misdemeanor conviction. This policy results in cases moving through the system at a savings of time and money for all involved.
The Division of Insurance realizes that most fraudulent insurance cases fall between $500 and $5,000. Since cases involving less than $5,000 are often not prosecuted, the system is susceptible to abuse. Prosecution of these cases as misdemeanors appears to be the best use of valuable resources and sends a message to those who might consider engaging in fraud.
To assist in investigations, Jones and Jansen have direct computer access to multiple databases, including the Federal Bureau of Investigation Nationwide Law Enforcement Telecommunication System (NLETS); the National Crime Information Center (NCIC); the Alaska Public Safety Information Network (APSIN); the National Insurance Crime Bureau (NICB); the National Association of Insurance Commissioners database (NAIC) and the State of Alaska Occupational Licensing and the State of Alaska Corporation Commission databases.
Prior to investigation of a claim, the fraud unit requires the following items:
1. A detailed letter of complaint explaining who the subject was the victim of or what information the subject has concerning a fraudulent and/or criminal insurance act.
2. Corroborating documents and evidence, including the following:
A witness list including all information necessary to contact the witnesses, adjusters, agents, etc.
A copy of the insurance policy clearly showing what the subject’s policy covers and showing that there was a policy to be defrauded.
A sworn statement supporting the loss and showing the subject’s signature for a benefit material to the claim.
Available photo or video including copies of negatives.
A copy of a settlement check showing exactly how much the subject was paid, date of issue and subject’s signature of endorsement on the back which clearly shows the subject received the money.
Tapes and transcripts of any interviews to allow the investigator to read rather than listen to a tape.
Reports of suspected fraud are submitted to the State of Alaska Department of Law. Prosecutions are handled through the Office of Special Prosecution and Appeals for complicated, high-dollar cases or through the District Attorney’s office. Insurance fraud cases are generally handled by one District Attorney with a good understanding of insurance laws. The Attorney General’s office participates in cases involving administrative action.
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