Recruiter/Manager Pleads Guilty to Mail Fraud, Money Laundering, and Structuring for Role in Staged Accident Scheme

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division; Michael K. Fithen, Special Agent in Charge, U.S. Secret Service; and Florida’s Chief Financial Officer Jeff Atwater, Division of Insurance Fraud, announced that defendant Oscar Luis Franco Padron pled guilty today to one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349, one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h), and one count of conspiracy to structure transactions, in violation of Title 18, United States Code, Section 371, for his role in a staged accident scheme. At sentencing, Padron faces up to 20 years in prison for conspiracy to commit mail fraud, up to 20 years in prison for conspiracy to commit money laundering, and up to five years for conspiracy to structure transactions. Sentencing is scheduled for March 30, 2012 at 10:30 a.m. in West Palm Beach, Florida before U.S. District Judge Kenneth A. Marra.

According to documents filed in the case and statements made in court during the plea, Padron admitted that he and others would recruit individuals who owned automobiles and had certain automobile insurance to participate in staged automobile accidents. The recruiters coached the participants on how to stage the accident, what to say to the police officer at the scene, and how to claim that they have been injured. After the staged accident, a police officer was called and a police report was filed. Then, the participants filed false claims with their insurance companies, alleging that they and their family members were injured.

The staged accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants filled out paperwork falsely asserting that they suffered injuries during the staged accident. In addition, Franco Padron and the other defendants advised the participants on how to fill out the paperwork and what to say if an insurance investigator interviewed them about their injuries or treatment. Some staged accident participants received no treatment at all, or may have received only a short exam or treatment, but the paperwork completed at the clinics indicated that a full and lengthy exam and treatment had been provided. Franco Padron was identified as a recruiter of patients, and he also served as an office manager who prepared forms for submission to insurance companies, mailed those forms via registered mail, deposited reimbursement checks received from insurance companies, and cashed checks drawn on the accounts of the chiropractic clinics.

Franco Padron also admitted that he knowingly avoided triggering banks’ $10,000 Currency Transaction Reporting (“CTR”) requirement when converting the deposits of the mail fraud proceeds into cash. For example, to avoid triggering the CTR requirement, two of the co-defendants would write a series of checks, typically for $9,000 each made payable to different individuals, that would be cashed on the same day, or made payable to one individual that would be cashed on successive days.

In total, 15 individuals have been charged in two separate federal cases involving the staged accident scheme. In the first case, in addition to Padron, the superseding indictment charges defendants Vladimir Lopez, Lazaro Vigoa Mauri, aka Lazaro Vigoa, Joaquin Ross, aka Joaquin Ross Vasquez or Quinito, Lisbet Leon, aka Lisbet Leon Machado, Aureliano Diaz, Carmen Venegas, Yida Bello, aka La Gorda, Gloria Patricia Cintron, aka Patty, and Veronica Riofrio, aka Vero. Lopez and Vigoa Mauri are fugitives. The remaining defendants have all pled guilty to conspiracy to commit mail fraud and are awaiting sentencing.

Defendant Ross previously pled guilty on November 4, 2011. Sentencing is scheduled for February 17, 2012 at 10:30 a.m. before U.S. District Judge Kenneth A. Marra. Defendant Bello previously pled guilty on November 29, 2011. Sentencing is scheduled for February 24, 2012 at 1:30 p.m. before U.S. District Judge Kenneth A. Marra. Defendants Cintron and Leon each previously pled guilty on December 2, 2011. Sentencing is scheduled for March 9, 2012 at 10:00 a.m. before U.S. District Judge Kenneth A. Marra. Defendants Riofrio, Diaz, and Venegas each previously pled guilty on December 20, 2011. Sentencing for these defendants is scheduled for March 16, 2012 at 2:00 p.m. before U.S. District Judge Kenneth A. Marra.

In the second indictment, which was unsealed on Friday, January 6, 2012, defendants Ketty Gonzalez, Ernesto Miralles, Julio Fernandez Delgado, Alex Anoldo Flores, and Zachary Keith Stuhler were charged with one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349, and nine counts of mail fraud, in violation of Title 18, United States Code, Section 1341. Each charge carries a maximum sentence of 20 years’ imprisonment.

Mr. Ferrer commended the investigative efforts of the FBI, IRS-CID, USSS, Florida’s Department of Financial Services, Division of Insurance Fraud, and issued a special thanks to the National Insurance Crime Bureau (NICB) for its assistance in this investigation. The cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña.