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Tips From Insider Lead to Arrest of 22

Feb 6, 2014 | Fraud

Twenty-two people from across Miami-Dade County were arrested and charged in a fraud scheme that cheated insurance companies out of $7.6 million. The scheme involved setting homeowner’s houses on fire or causing severe water damage to them by creating a flood on the property. This scheme has been going on since November 2006 and has involved approximately 17 different homes.

The average homeowner today owns some type of homeowners insurance to protect their most valuable asset. These insurance policies can insure a home and its contents from the risk of being damaged by fire, theft, or other natural disasters. But what if that fire is set on purpose?

Operation Flames and Floods was a multi-agency investigation that was set out to locate the leader of a fraud ring in Miami-Dade County. After one of the people involved with this ring stepped forward, they proved information in exchange for a lighter prison sentence. This tip from an insider led to the arrest of twenty-two people; they were charged as being part of the fraud scheme that cheated insurance companies out of $7.6 million. One of those twenty-two people was the leader of the fraud ring, Jorge Fausto Espinosa Sr.

Espinosa owned and operated Nationwide Adjusters in Miami-Dade County. It is now learned that Espinosa worked with recruiters and “finders” to locate homeowners willing to allow him to set fires or burn their homes and then file a homeowner’s claim with insurance companies. Since November 2006, it is alleged that Espinosa has staged 17 fires and floods in homes. After the recruiters and finders located the individual homeowners Espinosa would meet with them and decide whether a flood or a fire would work best to destroy their home. Once that was decided, the two parties would agree on a date. Once the plan was completed, Espinosa would file a claim with the insurance company and get a cut of 20-30 percent once the insurance company paid the homeowner.

Authorities reported that the ring of people were able to get away with this scheme for so long because they targeted homeowners with different insurance companies. Espinosa has been charged with multiple charges including grand theft, arson, forgery, and racketeering. He could be facing more than 30 years in federal prison.

Source: Miami Herland, Insurance fraud operation across South Florida nets 22 arrests, Carli Teproff 2/4/2014


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