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HomeMy WebLinkAbout99-099RESOLUTION AUTHORIZING DISTRIC"h ATTORNEY ~['O UNDERTAKE GRANT' AWARD AGREEMENT WHEREAS, the Butte County Board of Supervisors desires to undertake a certain program designated "Workers' Compensation -California Insurance Code Section 1872.8, California Code of Regulations Subchapter 9, Article 4, Suction 2698.65 administered by the California Department of Insurance. NOW, 'T'HEREFORE, BE IT RESOLVED that the District Attorney of the Btirtte County District Attorney's Office is authorized, on its behalf to submit the attached proposal to the California Department of Insurance and is authorized to execute on behalf of the Board of Supervisors the Grant Award Agreement upon award including any extensions or amendments thereof. BE IT FURTHER RESOLVED that grant funds received hereunder shall not be used to supplant expenditures controlled by this body. I hereby certify that the foregoing is a true copy of the resolution adopted by the Butte County Board of Supervisors in a meeting thereof held on the 27 day of July, 1999, by the following vote: flYES: Supervisors Beeler, Houx, .Iosiassen, Davis, and Chair Dolan NOES: None NOT VOTING: None ABSENT: None AT"PEST: ,; \ , l,l .1~NF, DO ;AN, Chair Butte County Board of Supervisors .JOHN BLACKLOCK, Chief Administrative Officer and Clerk of the Board of Supervisors _~ DEPARTMENT OF INSURANCE GRANT APPLICATION TRANSMITTAL Office of the District Attorne~~. C:ount5~ of Butte., herelay mal:cs application far funds under the T~rnrkcr~r' Cr~ntpci~scttivlt fraud program pursuant to Section 1872.5 of the Insurance Code. Contact: l;d Srcndrey Address: 2~ C'ounty ('enter Drive Oroyille, CA. 9~96~ {l j Pro~rulrr Tltlc "oI'I<ers- Cor~~pensation Fraud Prosecution Pro~~ram (4) 1'rn;rrum _'lltnau,~c~1. ~~lichacl L. Ramsey District Attonlev `~~ County Center Drive Oroyille. C:~. 9~96~ (6) /)rclrici.-lftn~'rlc~~~'s,~~i,~~l~trtru•c~- ~-elephone: (j ~0} >>8-7460 ~~~ U1"Lill( PCI'JOC-~ 711199 - 6 X0'00 ( ~) Grant amount ~89.4~9 --- --- (~~ 1'117(171CtCt~ ~~fflC('1' Constance Carter-,~~Il~~o~~e District !~ttorncv !1dmulistratiye Of-nicer 2> County Center Drive (h-~~~~ille. CA. 9>96~ ~'~ r-~_ ` ~- '?~am ~: ~,lichael 1_. R~ is `I itle: District Attorney County: Butte Address: 2> C~~unty Center Drive Oroville, C;1. 9~96~ Pl~c~ne: (~ 0} 8-741 l DatC: ~ul1e I?. I99~) Butte County District Attorney APPLICATION FOR A PROGRAM FOR THE INVESTIGATION AND PROSECUTION OF WORKERS' COMPENSATON INSURANCE FRAUD Fiscal fear 1999-00 TABLE OF CONTENTS 1. tiI~;C'TION ONE 1. Gs•ant 'Transmittal 2. Board of Supervisors Resoll~tion 3. Pro~ran~ Contact Information Il. lI[DGET ELEMENTS A. Personnel (Salary and Benefits) I3. Operating E~Penscs C. Equipment i I L I3L1T"I'E COUNTS' PLAN A. Qualifications B. Problem Statement C. Program Strategy 1). Objectives E. Orbanizational Chart I~-'. .IOINT INVESTIGATIVE PLAN PROGRAM CONTACT FORM Provide the name, title, address and telephone number for the person having day-to-day responsibility for the program. Name: Guy Georgianna Title: Senior District Atton~ey Investigator Address: 25 County Center Drive Oroville, CA. 95965 Telephone Numbers (530) 538-7735 Fax Number: (530) 538-7071 2. Provide the name, title, address and telephone number of the Chair of the County Board of Supervisors. Name: Jane Dolan Title: Chairman, Butte County Board of Supervisors Address: 25 County Center Drive Oroville, CA. 95965 Telephone Number: (530) 538-7643 Fax Number: (530) 538-7120 3. Provide the name, title, address and telephone number for the District Attorncy~s Financial Officer. Name: Const~~ce Carter-Angove "1 itle: District Attorney Chief Administrative Officer Address: 25 County Center Drive Oroville, CA. 95965 Telephone Number: (530) 538-7207 }`'as Number: (530) 538-i071 4. Provide the name, title, address alld telephone number for the person responsible for the data collection reporting for the applicant agency. Name: Donna Dulyea 'I~itle: District Attorney Investigator II Address: 25 County Center Drive Oroville, CA. 95965 Telephone Number: (530) 538-2046 Fax Number: (530) 538-7071 II MIDGET ELEMENT DEPARTMENT OF INSURANCE WORKERS' COMPENSATION INSURANCE FRAUD FY 99140 BUDGET CATEGORY AND LINE- ITEM DETAIL A. Personnel Services - SalarieslEmployee Benefits COST Deputy District Attorney III/IV (.25FTE) Program Attorney. Oversees Program -Salary 16,510 Devotes 25% of time to this program during -Benefits 3,817 last half of fiscal year. Deputy District Attorney III/IV {.25 FTE) Program Attorney. Devotes 12.5% of time -Salary 14,261 to program during last half of fiscal year. -Benefits 2,683 District Attorney Investigator II (.40 FTE} Program Investigator. Devotes -Salary 18,054 40% of time to this program. -Benefits 7,107 District Attorney Investigator II {.10 FTE} Program, Investigator. Devotes -Salary 4,514 10°fo of time to this program. -Benefits 1,777 Legal Secretary {.10 FTE) Clerical support for program. -Salary 3,284 Devotes 10% of time to this program. -Benefits 719 Chief Deputy District Attorney {.03 FTE) Supervisor of Program. Devotes 3% of Time -Salary 2,312 to oversight of program. -Benefits 509 District Attorney Administrator {.Q2 FTE} Devotes 2% of time to Program -Salary 1.289 grant managemenf. -Benfits 276 TOTRL -Personnel Services 77,112 DEPARTMENT OF INSURANCE WORKERS' COMPENSATION INSURANCE FRAUD E-ITEM DETAI B. Operating Expenses Communication Expense COST 1,217 Transpartation,Travel, and Training 1,600 Travel for meetings, case investigation, and program related fraining for investigator. ;Office Expense General office supplies. 770 Transportation -Motor Vehicle 3,000 X500 per month is allocated for the use of vehicle assigned to project investigator. (500 X 12 = 6, 000 X 50% = 3000) jAudit Annual expense for Program Audit 1,500 Administrative Overhead 4,260 5% of total direct costs. Cost allocation plan in accordance iwith l=ederal OMB Circular A-87 is on file tivith the State Controllers Office. ~TOTA~ -Operating Expenses ~ $12,347 DEPARTMENT OF INSURANCE WORKERS' COMPENSATION INSURANCE FRAUD BUDGET CATEGORY RND LINE-ITEM DETAIL C. EQUIPMENT COST None TOTAL - Equipment Q PROJECT TOTAL $89,459 D. CARRY-OVER FUNDS There are nc~ carr~°-~ti~er finds frort~l prior fiscal nears. III B~TTTE COUNTS PLAN A. Qualifications COUNTY PLAN WORKER'S COMPENSATION INSURANCE FRAUD QUP.LIFICATIONS The Butte County District Attorney's Office has been a participant in the Department of Insurance, Worker's Compensation Insurance Fraud Program for the last year. During the period of 1998j1999, the department developed its first year program, in that, we were able to actively plan and implement strategies to investigate and prosecute worker's compensation :insurance fraud. We intend to continue to build on this foundation for 1999j2000 with new ideas and. programs. This office is committed to its responsibility to address the general issues of insurance fraud. Within its population of more than 200,000, Butte County has a number of conditions that foster an environment ripe for a number of fraud issues. There is high unemployment. There i.s a substantial permanent welfare population. Included within this subculture are a high number of subjects who fraudulently submit welfare claims. The. local drug culture is significant, with Butte County posting extremely high statistics for methamphetamine production and use, as well as large scale ~,arijuana cultivation. I1.lici_t drug use often accompanies fraudulent claims and as a result, the Butte County District Attorney's Office investigates and prosecutes large numbers of fraud, perjury and tax evasion cases. 'ihere are a number of industries (i.e. lumber), government agencies and other businesses which have high incidents of worker's compensation claims. Add to this scenario several small and very large gambling establishments and the combination of these types of violations, criminal conduct and vices, worker's compensation fraud has become an expected result. i;~e ..~=>ed the resource funded by t:r~is grant to ad~:~ress the issu~_> o` w7orker's compensation insurance fraud in a positive, prc;fessional_ ;r,anner. The District Attorney 7_~eali.zes t~:e mind-set of this office has t0 be t0 aggr~ssi Vet y ad ~, etc, t-}1 P_ 1SSU~' Of i rtc,~..ra~1Ce ~~'aU" C:? a continuing basis. Effective use of the funding and services provided by t~le Department of Insurance has allowed this office to bring cases to disposition. This office c1_early recognizes that witt,. the resources of the Department of Insurance, combined with the current resources of this department, we can maximize an aggressive continuation in the fight against work:er's compensation -nsurance fraud. Needed to address the issues of insurance ~^raud are adequate resources for prosecution, follow-up investigation, outreach, clerical support and program coordination. Fxper_~enced staff in the form of. Deputy District Attorney Kevin Maloney, Deputy District Attorney Frank Horowitz, Senior Investigator Guy Georgianna, Investigator Donna Dulyea, Investigator ~7os Van Hout, and the Major Crimes tTni_t secretary wou]_d be made available for insurance fraud cases. Whenever possible, we utilize graduate sr-udents from nearby 1 Chico St=ate to assist. Funding available through this grant alone, would not be sufficient to hire a full time ir_vestigator in addition to the prosecutorial and clerical demands of an effective program. However, with the approval of this grant and the funding available through the Automobile Insurance Fraud Program, suffi- cient resources would be in place to fully staff the insurance fraud. demands. The cverall plan is to provide 50o FTE of a Deputy District Attorney's time in the form of 25o Deputy District Attorney Kevin Maloney' s time and 25 0 of Deputy District Attorney Frazik Horowitz' time. The structure of the Butte County Consolidated Courts necessitates dividing the case load between two attorneys. l00 of Senior Investigator_ Guy Georgianna's time, 100 of Investigator Donna Dulyea's time, 400 of Investigator Jos Van Hout's time, and l00 of the Major Crimes Unit secretary's time. Funding available through this grant combined with funding available through the Automobile Insurance Fraud Program, would go a long way i_n helping the Butte County Office of the District Attorney address insurance fraud issues. *~A~ic~ *x-i: ;_ is *it***xic ~n ****~: 3,*>F A: :F*:F is ~r i_ x~kx xi' kx~c ;F x'A 7r:k ~3: 4r of 7r :h ~~-Jc*9c :r -k**t:h 9: *** QUALIFICATIONS CONTINUED 'i I f t}~_E? d~strlct attO"-ney }1aS r eCe 1_VP._d 3 QY'ant 7 '_~O'T'. Ci 1 prlOr CO t}pis application, list only those achievements Trade possible by the use of grant funds. Also complete t}~_e Summary of closed and pending prosecutions for FY 1998-99. A page listing program achievements realized with the use of ot}ler funds may be included in the Appendix. ?_ 2. In FY 1994-95, 10 Investigations were initiated and involved an average of 1 identified suspect per investigation. In FY 1995-96, _d investigations tivere initiated and involved an average of I identified suspect per investigation. In FY 1996-97, 9 investigations were initiated and involved an average of 1 identified suspect per investigation. In FY 1997- 9$, 5 investigations were initiated and involved an average of 1 identified suspect per investigation. from July 1, ] 998 to June 15, 1999, 7 investigations were initiated and involved an average of ]identified suspect per investigation. 3. In FY 1994-95, Cl ~-arrants/indictments were issued, involving an average of 0 suspects and/or defendants. In FY 1995-96, O warrants/indictments were issued, involving an average of 0 suspects and/or defendants. In FY 1996-97, 0 warrants/indictments were issued, involving an average of 0 suspects and/or defendants. In FY 1,997-98, 1 w~arrantlindietment was issued, involving an average of .1 suspect andlor defendant. From July 1, 1998 to June 15, 1999 (1 warrantslindictments ~~-ere issued, involving an average of 0 suspects and /or defendants. 4. In FY 1994-95 0 arrests and 0 surrenders were made. In FY 1995-96 0 arrests and _0 surrenders were made. In FY 1996-97 0 arrests and fI surrenders here made. In hY l 997- 98 0 arrests and 1 surrender were made. From July 1, 1998 to June I5, 1999, f1 arrests and O surrenders were made. 5. Itl hY 1994-9.5 0 convictions were obtained involving 0 defendants. Of these convictions tl were obtained by trial verdict, 0 were obtained by plea or settlement. In FY 1995-96 0 convictions tivere obtained involving r? defendants. Of these convictions 0 ~~cre obtained by trial verdict, _© were obtained by plea or settlement. In I~ Y 1996-97 <) convictions were obtained involving ~ defendants. Of these convictions O t~~cre obtained by trial verdict, 0 were obtained by plea or settlement. In FY 1997-98 I convictions ~a~ere obtained involvin<~ ~ defendants. ~f these convictions 0 were obtained by trial verdict. 1 was obtained by plea or settlement. hl~oui July 1, 1998 to June 15, 1999. 0 convictions were obtained involving (1 defendants, Of these convictions 0 were obtained by trial ti~crdict, 0 were obtained by plea or settlement. 6. In FY 1994-95 O defendants were ordered to pa}~ $ _0 in fines and penalty assessments. Of this amount $ ~ was collected from ©defendants. In F~' 1995-96 0 defendants tivere ordered to pay ~ ~ in fines and penalty assessments. Of this amount $ 0 was collected from 0 defenda~lts. In h'Y 1996-97 fI defendants were ordered to pay $ (I in fines and penalty assessments, Of this amount $ ©was collected from 0 defcnclants. In FY 1997-98 1 defendants were ordered to pay $ 100.00 in fines and penalty assessments. Ofthis amount $ 100.00 was collected from 1 defendants. From July I, 1998 to .lone 15, 1999, 0 defendants were ordered to pay $ 0 in fines and penalty assessments. Of this amount ~ 0 was collected from 0 defendants. 7. In h1' 1994-95 0 defendants were ordered to pay restitution in the amount of $0 to victims. Of this amount $fI was collected from 0 defendants, benefiting tI victims. In l~ Y 1995-96 0 defendants were ordered to pay restitution in the amount of ~(~ to victims. Uf this amount $0 «~as collected from 0 defendants, benefiting (1 victims. In FY 1996-97 0 defendants were ordered to pay restitution in the amount of $(1 to victims. Of this amount $d u~as collected from ©defendants, benefiting ©victims. In FY 1997-98 1 defendants were ordered to pay restitution in the amount of X192©.©© to victims, Of this amount $192(1.~t1 was collected from 1 defendant, benefiting 1 victim. From July ], 1998 to June 1 S, 1999, ©defendants were ordered to pay restitution in the amount of $ ©to victims. Of this amount $ d was collected from 0 defendants, benefiting 0 victims. c o ~ o '~ ~- o ~ o 0 0 0 0 0 0 0 0 0 0 0 N ~ ~ ,__ CC LL .a L ,N V -Q ~~ O ~- O O O O O O O O O O O O ~ 0 Z U ~_ T~ L r!~ y Q~ ~/~/ ~ N O O O O O O O O O O O O O O .~ D f- ~ 4 Q U Z o ~ W ~ ~ ~ ~ W ~ N ~ U~ ~ .i1 N o r- a o 0 0 0 0 0 0 0 0 0 0 0- Qj ~ ~ Q ~ ~ ~ i ~ Z ~ Z Q ~ ~ Z ~ W - ~ Z ~ 0~ a d- v v v v v v- rr v v v v v ~ ~, _ E- U ~ V r r- r- ~ r- r r- r ~ r- r r- r- r- CU o~ o~ ~ co o~ m as co ~ o~ c~ ~ o~ o~ W `~ ~ ~ r Q ~ ~ ~ U O~~ m ~ ~ ~ ~ U a. 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(~ U c~ a~ ~ a~ ~ a? C ~ ~ ~ ~ C/~ CLS ~ ~ RS C ~ ~ -~.~ ~ ~ ~ (~ O ~ ~ ~ ~ ,F, ~ ' ~ U O ~ ` N O ~ N = U ~ ll ~ ~ ~ ~ ~ ~ (0 ~ ~ W ~ ~ Y 1- W > ~ > > > > ~ C~ - ~, ~ ai ~ ~ ~ ~ ~ ~ E ~ ~ c -~ U ~ U ~ ~ U m BUTTE COUNTY DISTRICT ATTORNEY WORKER'S COMPENSATION FRAUD PROGRAM STAFF DEPUTY DISTRICT ATTORNEY: DDA Kevin Maloney, formerly with Mendocino County District Attorney's Office, extensive knowledge of Worker's Compensa- tion investigation and prosecution. Kevin will be handling i~~ast all prosecutions. Kevin is a graduate of the San Fran- cisco School of Law. His first year of law practice was spent as a defense Attorney in Glenn County, followed by fourteen years as a prosecutor at Mendocino County District Attorney's Office, and was that office's Insurance Grant Administrator and prosecutor. DDA Frank Horowitz, formerly with Las Angeles City Attorney's Office will be providing the backup and support that Kevin will require. Frank is a graduate of UCLA School of Law, l=aving spent five years with the Los angeles Public Defender's Office and eighteen years with the Los Angeles City Attorney's Office. In 1997 Frank accepted a job as Deputy District Attorney for the County of Butte. SENIOR INVESTIGATOR: Senior Investigator, Guy Georgianna, supervises tl~e Major Crimes Unit of the Butte County District Attorney, Investiga~~ tiara Division. Mr. Georgianna is responsible for the s~_.~ervisicn of the program i nvestigators and responsible fo.T_ the management of the program grant and grant reporting proc•~~ss . 1.0 o of "~Ir . Georgianna' s time is devoted to the p;=ogram. He has held this position since December 1997. Guy graduated fironi L":e Ui~~'Jer~~~ty a` :~cd~czndS with a B~as~ nc~. r Degree and has more than twenty five years experience in both stat.~e and federal law enforcement. PROGRAM INVESTIGATORS: Jos Van Hout, Investigator II, is the Worker's Compensation grogram investigator. Under the grant r~G ~ of his t=ime wi_11 b~a devoted to the program. Investigator Van Naut was placed in this assignment in .iar.uary of 1998 , Prio}° to his current position, Sos spent thirteen years in specialized computer and electronics fields and six years with the Butte County Sheriff's Department. 1 Donna Dulyea, Investigator II, is the primary investi.gatar for the Automobile Fraud Grant. She will, however, be the back up investigator far Investigator Van Hout, covering periods of illness, vacation, court or requests for assistance. After receiving a degree in Criminal Justice, Donna spent a short time as a police officer for the city of San Diego. She spent the next twenty-two years as an investigator with the San Diego District Attorney's Office, before accepting a position with the Butte County District Attorney's Office in 1998. PROGRAM SECRETARY': Gloria Lind, Legal Secretary, has been so employed for eighteen years and is also a Supervising Legal Secretary currently assigned to the Major Crimes Unit. 2 III BUTT~'~ COUNTY PI1AN B. Problem Statement COUNTY PLAN PEOBLEM STATEMENT Butte County is a semi-rural county with a population of 201_,596 people. The largest city is Chico with a population of 52,746 (93,000 is claimed by the city for the Chico greater urban area); fall.owed by the Township of Paradise 26, 357 (with a claimed area of influence of 40, 000) Oroville 12, 603 (45, 000 is claimed for the greater Oroville area); then Gridley 4,91.2 (with a claimed area of influence of 22, 000) . Major employers include the University of California at Chico, various municipal, county, state and federal agencies. Rice almond, and walnut farming, along with lumber are the major industries of the area. The county has above average unemployment and an above average welfare population. It follows that, as an economically depressed area, fraud is a major concern. The advent of Indian Gaming has also had a negative impact. Two casinos have opened in the Orovil_le area. A small increase in bad check, theft embezzlement and fraud has been attributed to those suffering gambling losses. We have just completed our first year under a Department of Insurance Worker's Compensation Fraud Grant. We have implemented ne~r~ ideas and strategies to build a strong foundation on which the Debarr_me.t of Insurance and the Butte County District Attorney' s Office can expand over the years. By adopting a strategy of blare}.et a~vert1s~ng, personal contact;, participating in Department of Insurance p}-esentations and assisting other police agencies with insurance related investiga- tions, w~._, are slowly but consistently bui.ldi_nq a strong base =_or refe,~ra'~s and self initiated investigat-ions. `s'he :utte County District effectively investigate currently establishing a potential victims. This AUgUSt 19y9. Attoiney's Office, in an effort too t ~-~e and prosecute fraud violations, i~= Computer Internet Outreach Program to service is estimated to be on line by Using latest technology, a web site is being desig?zed to allow potential victims to log onto the web site and contact our office. The web site will allow users to specifically determine what typ4~ of fraud they believe has victimized them. A detailed outline of elelr:ents and a description of specific crimes will also be available. The web site will also have a confidential area to allow users to report suspicious activities or report ~oteritial s~;spects. Types of fraud, w~~ich can be reported are Worker's Compensation Fraud, 11uto Insurance Fra,,zd, and General ~'ansumer FraU . 1 In addition to the web site, a Fraud Line has been installed. W't.en tl~iis standard telephone line is operational, it will allow callers to call in and report potential fraud, similar to the web site . Callers can identify, by selecting the appropriate mail box number, specific types of fraud by which they may have been victimized. This will allow victims, without computer access, to report potential fraud. As on the web site, a confidential mail box number will also be available for reports of fraud and potential suspects. Types of fraud, which can be reported are Gdarker's Compensation Fraud, Auto Insurance Fraud and General Consurer Fraud. In order to better equip the Butte County District A`Utcrney's Office in the administration of the Department of Insurance Grar:ts, we have actively recruited qualified prosecutors, with extensive experience in Department of Insurance investigations and prosecu- tions. Deputy District Attorney Kevin Maloney, was such a hiring. While he once managed Mendocino County's Department of Insurance Grants, he is now our primary fraud prosecutor. Department of Insurance records show there wez:e 58 cases of t^orker's Compensation Insurance F~'raud in Butte County during years 1996f98. This clearly is a substantial caseload. A caseload that cannot be borne by the Department of Insurance alone. It is clear tale District Attorney needs to aggressively Ua~_~ticipate in the solution of. the problem. °d~th t'r~.e available funding, this o`~fi ce manes a commitment of :~~~e ___._ ~ i_~~~vestigator, supported by a back up investigator, and the necessary prosecztori_al, admi_r_i strati_ve and clerical surport '.o aggressively address these suspected fr_a~~tid cases. Based on t'r.e ~ gaud cases G _ai_ __ significant in.^?~easc. in reporte~. insu~~anct~ ~ ".~ 1~ ~ "'~ ~nVE'St~.q~tor 18 ]Listlfl~(~. rVv'E' CC~ntinUE' t0 be. CaL1t1.Gtsiy CZ;tli'1i:`~l~ that Butte, County will qualify fc~r the maximum g~-ar~t, e.~ab~i_ing ~~7~~ appOln'~mr>=7t O~- thar_ fL.ll t1_TTIe ~_nvestlgat0}'. Butte County remains committed to pr.ovidir.g resources and manpower to that end. 2 III BUTTE CC}UNTY PLAN C. Program Strategy COUNTY PLAN PROGRAM STRATEGY The Butte County District Attorney Worker's Compensation Insurance Fraud Investigation and Prosecution Program strategy is based on staffing, resource development, communications and pro-active programs. Staffing: Placing the most qualified persons in key positions. Prosecution of Worker's Compensation Insurance Fraud cases will be the responsibility of two Deputy District Attorneys. The division of the case load is necessitated by the structure of the Butte County Consolidated Courts. Because of this, all case loads in the Butte County District Attorney's Office are divided alphabetically. Deputy District Attorneys Kevin baloney and Frank iorowitz w~ll make up the prosecution element of the staff. Investigation responsibilities will be preformed by Investigators Jos Van Hout and Donna Dulyea. Senior I_nvestiaator Guy Georc~ianna will supervise InvestigatorC Dulyea ar_d 'Van. Hout and be responsible to see r_hat all ~~equirements of the program are carried out. Clerical responsibilities for the progran; belong to Gloria Lind. Resource Development: 'he development of resources for the Butte County D~.strict Attorney ~~9orker's Compensation Insurance Fraud Prosecution Program has been underway since the 1998j1.999 grant period. Investigators C~eoraia- nna ar!d Van Rout 'r!ave developed new _deas and prog~~arr,s to reach) she public and provide education. New strategies and outreach, as described elsewhere in this grant, such as websites, mailings and phone reporting and information lines, have been the direct result of planning anal irlplementation. We rlciVE? COntlnue ~ t0 access manaGerS Of sUCCP_SSfUl 1TiS'~,Zra:~C:e grar!t programs, established ir! other counties. Gur policy r as been to tape advantage of every possible resource and point of contact. Investigator Van Hout is the pivotal. key to the successful adminis- tration of our Worker's Compensation Insurance fraud Protection Program. It i.s his responsibility to maintain. open lines of communi_cati.on between the Department of Insurance, Deputy District Attorneys, various insurance carriers and this office. Investiga- tor Van Hout will utilize ail resources available to effectively manage the Worker's Compensation Insurance Fraud case load. 1 As the newest member and back up investigator for the Investiga- tions Team, Investigator Dulyea will be instructed to make routine contacts and visits with the Sacramento Office of the Department of Insurance, Fraud Division, and whenever possible will accompanied by Investigators Georgianna and Van Hout to Department of Insurance sponsored training. Investigator Jos Van Hout has developed a computerized case tracking system, whic'rl is being ut=ilized to track insurance fraud cases. Investigator Van Hout will be responsible far reporting new cases and case dispositions to the Department of Insurance. Investigator Dulyea will assume the role as back up investigator. As part of the Butte County District Attorney's Office strategy, a mail education program has been initiated throughout Butte County. 131 letters, introducing the new insurance fraud investigation unit, have been mailed. Businesses contacted were key insurance related businesses within Butte County. This mailing was conducted during April, May and June of 1999. Even with minimal response, cases obtained from this procedure, i.n addition to cases from local police agencies, will greatly increase numbers of overall investigations for year 1999j20QQ. I'o familiarize In~.Test~gator Dulyea with these resources, and to prepare her assist in this program, this office will make her available to spend two to four days with ti7e Shasta County District attorney ? nsurance Fraud Unit : to atte-~d all carrier sponsored training everts; and all specialized training provided b~~ the Departrne:~ of Insurance. Communications: From Otir `.'lt'w Of the Overall program, COfli?h.~1r11Cat10ns 13 t}`le }Coy element to not only insure adequate investigation and prosecution, ~illt. 15 r"'S~eTltlal t0 a`~'Ol~.a CtUTJ1lCatlOn OL effort and COOrdlricltE joint ventures with the Departr~;ent of Insurance. In our Join`: Investigation Flan, specific guidelines have been established regarding communications between investigator, the attorney and the Department of Insurance. We will insure these guidelines are met. Please refer to tine attached Joint Investigation Plan. All c:as~s wi.il be reviewed by Deputy District Attorneys Kevin Maloney or Frank Horowitz, and the follow up i_nvestigati_on will be coordinated betv.7een Mr. Maloney, Mr. Horowitz, Investigators Van Rout, Dulyea and the Department of Insurance. 2 BUTTE COUNTY DISTRICT ATTORNEY INSURANCE FRAUD PROGRAM YEARLY HIGHLIGHTS FY 98j99 » »> During April 1999 a mailer went out to more than 130 letters went out to major corporations and insurance related businesses within Butte County. See attached copy. » »> Butte County District Attorney hosts a bi-monthly area wide investigator's meeting, averaging more than 40 state, federal and local investigators. Current training to include Butte County's Insurance Fraud Program is presented and each investigator discusses current cases and can make requests for assistance. » »> Creation of an Internet Web Site for public education and instruction regarding insurance and major fraud. »»> establishment of a telephone fraud line, enabling the public to report suspected insurance and major fraud. » »> 4~e are currently scheduling public speaking engagements addressing insurance fraud issues and education. Two presentations have been scheduled within the next 30 days. » »> Provided agents to work in undercover capacities for other State agencies conducting insurance fraud investigations. » »> Currently assisting Tehama County District Attorney's Office in the preparation of Department of Insurance grants. » »> Butte Caunty District Attorney's Office has maintained an aggressive prosecution program for other forms of insurance fraud, not covered within the confines of the grant, such. as staged burglaries, arson for profit and medical insurance fraud. rY » »> At least three of our current cases involve multiple agencies and jurisdictions, requiring coordination and cross training to achieve common goals. » »> The hiring of Deputy District Attorney Kevin Maloney, formerly Mendocino County District Attorney's Office, as our lead prosecutor of insurance fraud. » »> Have assisted DOI Investigator Larry Sewell with insurance fraud presentations at our local CHP office. » »> Significant auto fraud cases include a local auto body shop adding hours to repairs bills, defrauding all insurance companies with which they conduct business. Another case required the use of informants and pretext phone calls to obtain necessary evidence and leads. .., 4 April 1 ~, 1999 -.:. To whom it may concern; :-, ~~ ~utte Count LAND OF hJATURAI G;'CAITH AND BtAU~i ~;~ IlTICHAEL L. RAIt7SEY District Attorney EDWARD J. SZENDREY I~2ANCISCO R ZA.R.ATE Chief Investigator Chief Deputy District Attorney "I-he Butte County District Attorney's Office a1on~~ ti~~ith the Department of IIlSUranCe has recently developed a working relationship to combat the growing abuses in the insurance industry. VJe will jointly investigate and prosecute violators who take advantage of these insurance agencies ~~nd the companies they serve. The District Attorney's Office will investigate and prosecute Workman's Comp insurance cases and Auto Insurance cases in the. Butte County area. If'you have any potential cases, please contact the District Attornev's Office or the Department of Insurance. Sincerely Fours. C. J. Van Ilout District Attorney Investi~~ator 030)53&-2046 (~ c5 County Center Drive Oravil!e, California 95965-3385 ~ 655 Oleander Avenue Chico, California 9592fr392A ~ T31 (530} 538-741 1 Fax: (5307) 538-7071 ~ Tel: (530) 891-2712 ~ Fax: (530) 891-2715 III BI.JTT~ COUNTS PL~.N I). Objectives COUNTY PLAN FY 1999/2000 OBJECTIVES 1. 1.2 new investigations will be initiated during FY 1999f2000. 2.. 4 new prosecutions will be initiated during FY 1999/2000. Our r_ur_rent mailing program and web site, may actually increase the numbers in category 1. and 2. dramatically, but more conservative numbers at this juncture would be appropriate. 3. 3 investigations will be carried over from the previous grant period. 4. 1 prosecution will be carried over f_r.om the previous grant perlOd. 1 III BUTTE COUNTS PLAN E. Organizational chart BUTTE COUNTY WORKERS' COMPENSATION INSURANCE FRAUD ORGANIZATIONAL CHART MICHAEL L. RAMSEY DISTRICT ATTORNEY ED SZENDREY CHIEF INVESTIGATOR FRANCISCO ZARATE CHIEF DEPUTY DISTRICT ATTORNEY MAJOR CRIMES UNIT GUY GEORGIANNA SENIOR INVESTIGATOR DONNA DULYEA FRAUD INVESTIGATOR KEVIN MALONEY DEPUTY DISTRICT ATTORNEY III FRANK HOROWITZ DEPUTY DISTRICT ATTORNEY III JOS VAN ROUT FRAUD INVESTIGATOR IV JOINT INVESTIGATIVE PLAN JOINT INVESTIGATIVE PLAN Memorandum of Understanding I . Introduction (a) The "partiesn to this joint plan are the California Department of Insurance -Fraud Division, and the Butte County District Attorney's Insurance Fraud Unit. (b} The parties of this joint investigative plan recognize that the C.D.I. -Fraud Division was established to investigate allegations of insurance fraud throughout the State of California, and is the primary investigative agency in this field. However, while the headquarters for the Fraud Division in Central Northern California is based in Sacramento, its investigative responsibilities encompass twenty-five central and northern counties. Due to this considerable geographical territory, the number of referralslcases, and the fuute number of investigators available, the Fraud Division cannot reasonably be expected to devote its efforts in any one county. Thus the important need for an effective joint plan to address the problem of insurance fraud in each jurisdictional territory. 2. Statement of Goals (a) To promote a close working relationship between the DAs insurance fraud unit and the Fraud Division, based on dedication to the common goal of fighting insurance fraud, commitment to the highest professional and ethical standards, and mutual respect as law enforcement officers devoted to the pursuit of justice and the protection of the citizens of Butte County and the State of California. (b) To investigate in a timely manner, using professional standard and procedures, and prosecute when appropriate, as many identifiable cases of suspected insurance fraud as we can. (c} To achieve the best possible anti-insurance fraud program we can produce, through the efficient and effective use of the limited resources provided, and the promotion of awareness in this community that the serious problem of insurance fraud is being addressed in a meaningful way by law enforcement. 3. Receipt and Assignment of Cases Present law requires that an insurer who knows or reasonably believes that an act of insurance fraud has been committed, report this information to the Department of Insurance -Fraud Division and the local district attorney (Insurance Code section 1877.3). (a) `w'hen a suspected fraudulent claim (SFC) or a case referral package is received from insurer, it will be entered into a database, available for future reference. Both parties will maintain a case tracking system to monitor all SFC's and case referral packages received. (b) Both parties will communicate on a regular, scheduled basis to discuss SFC's and case referral packages received, with the objectives being to avoid duplication of investigative efforts, and to insure that all referrals are being appropriately addressed. When a case is assigned far investigation, the assigning party will notify the other within ten working days. A monthly report regarding intake of SFC's and assigned cases will be generated by both parties and mailed to one another by the fifth working day of each month. (c) If the SFC or case referral package is sent only to the Fraud Division, the Fraud Division will address the matter, exercising its best discretion on how to proceed. with appropriate notice to the D.A.'s insurance fraud unit of the action taken. If the SFC or case referral package is sent only to the D.A.'s insurance fraud unit, it will notify the Fraud Division and determine what action, if any, the Fraud Division desires to take, as indicated in paragraphs (d), {e), and (f) below. The information shall include the suspect's name, carrier or administrator and the claim. (d) As the primary investigative agency in the field of insurance fraud, the Fraud Division will have "first claim" to any SFC or case referral package sent by an insurer for investigation. There can be an exception to this provision if the referring insurer specifically requests that the investigation be done by the D.A.'s office. The Fraud Division will be notified immediately to discuss the situation and avoid any duplication of investigative efforts. (e} If die Fraud Division elects to pursue an investigation of an SFC or case referral package sent by an insurer, the D.A.'s insurance fraud unit will suspend any fiirther action an the case, pending the outcome of the Fraud Division's investigation, and will notify the insurer of this fact in writing. (f) If the Fraud Division elects not to pursue an investigation of an SFC or case referral sent by an insurer, because of excessive caseloads, resource limitations, or any other reason, or chooses to defer any matter referred, the D.A.'s insurance fraud unit will review the referral for investigation. The referring insurer will be notified of this fact in writing and a copy of the writing will be submitted to the appropriate D.A.'s insurance fraud unit. (g) If the D.A.s insurance fraud unit receives a referral that would be more appropriately handled in another county's jurisdiction, the original receiving D.A.'s office will forward the referral to the appropriate county and notify the Fraud Division. 2 4. Investigations (a) Pursuant to the above provision, and to maximize the expenditure of resources, it is understood and agreed that either party will provide assistance to the ether upon request in any investigation where such assistance is needed. This could include serving search warrants, interviewing witnesses, making arrests, etc. (b) Joint investigations, may be undertaken in cases where the parties determine it is beneficial to combine resources to achieve the most efficient and effective results. This will be determined on a case-by-case basis. (c) It is expected that cases will be developed from referrals by insurers, other Iaw enforcementJgovernmental agencies (CI-IP; EDD; etc.), informants and other responsible sources of information.. Outreach programs are encouraged to promote this aspect of the plan. (d) It is the intent of this joint investigation plan to avoid duplication of investigative efforts by maintaining regular cammunication to discuss caseloads and share information concerning current investigations. The Fraud Division regional supervisors will meet at a minimum of twice a year with the D.A.'s insurance fraud unit's designee to review the working relationship between both agencies. (e) The deputy district attorney of the D.A.'s insurance fraud unit, or his(her designee, will be available to meet with the Fraud Division investigator at any time during the investigation of a case when so requested by the investigator to discuss any aspect of the case. (f) It is the intent of the parties that by maintaining regular communication and adhering to agreed upon plans and procedures, the completed investigation will result in the filing of criminal charges and a successful prosecution. At the same time, however, it is understood that not every case that is investigated will result in prosecution. This can happen when the evidence does not develop as expected, material witnesses are no longer available, the case lacks jury appeal, the reasonable likelihood of conviction is minimal, or other unforeseen circumstances develop. The parties will take all possible steps to avoid such situations, as it is not desirable to expend investigative resources on cases that are not prosecuted in court. {g) Any investigative costs associated with a Fraud Division investigation prior to the complaint being filed, the Fraud Division will incur the cost. Any costs associated with the investigation after the complaint is filed, the District Attorney's Office will incur the cost. Responsibility for costs incurred during a "joint" undercover operation will be determined by the Memorandum of Understanding -see section 5 (c}. 3 5. Undercover Operations (a) Both parties recognize the importance of undercover investigations in those cases where it is felt this technique is a viable means (often the only means) of developing evidence to prove a suspected insurance fraud. However, the parties also agree that undercover operations need to be highly organized and carefully monitored by supervisor level personnel to insure the efficiency and integrity of the investigation. It is understood that undercover operations can be very labor intensive and time consuming, and don't always produce the desired results. (b) Either party may decide to conduct an undercover operation in a particulaz case using its own personnel and resources. In a situation where the Fraud Division conducts its own independent undercover investigation in Butte County, the D.A.'s insurance fraud unit will be available to provide any advice or other assistance requested. (c) In a case where there will be a "joint" undercover investigation, there will be a memorandum of understanding (M.O.U.) prepared prior to the start of the investigation, which outlines and specifies the goals and the objectives of the investigation, as well as the duties and responsibilities, including personnel and financial responsibilities, of each of the parties in the investigation. 6. Case Filing_Requirements (a) The investigation of suspected insurance fraud cases should focus not only on the development of probable cause to make an arrest, but also on the obtaining of sufficient evidence to prove the charge beyond a reasonable doubt in a criminal court. It is understood that each case is unique, and that certain action may need to be taken in one case that would not be taken in another. (b) When submitting a case for prosecution, the investigator should present as complete a package as possible, including a detailed report, which outlines the offenses alleged to have been committed, the details of the investigation, and the evidence available to prove the charges, including identification of available witnesses and supporting documentation. In cases involving alleged false statements of misrepresentations, there must also be identified evidence to show materiality of the alleged false statement or misrepresentation to the claim. (c) To promote efficiency in this area, Fraud Division investigators are encouraged to contact the Butte County D.A. early in the investigation of a case to share ideas and develop strategies that will lead to a prosecutable case. (d) The D.A. will ensure that all formal case presentations made by the Fraud Division will be reviewed within ten working days of the presentation or delivery. If additional investigation is believed to be needed by the reviewing D.A., he/she will notify the case investigator immediately. The case investigator will complete 4 the additional investigation as soon as reasonably possible and provide the D.A. with status updates at a minimam of every fifteen working days until the investigation is completed. The D.A. will further ensure that decisions on complaint filings shall be done in a timely fashion but no longer than thirty days from the date of receipt. If a formal case is rejected for prosecution, the D.A. will prepare a letter in writing stating the reasons for the rejection and provide the letter to the case investigator within ten working days following the rejection. 7. Training (a} Bath parties have been, and will continue to be, active participants in the annual CDAAjCDI insurance fraud training seminar. This will provide a significant portion of the ongoing training of both parties in the area of insurance fraud. (b) The parties will participate in joint informal training sessions as necessary on issues important to the investigation and prosecution of insurance fraud cases. (c) The parties will assist each other, when requested, in training sessions for insurance carriers and administrators, or issues important to the detecting, investigation, and prosecution of insurance fraud cases. Both parties will notify each other when there is a request for training by an insurance carrier and administrator. 8. Problem Resolution (a) It is the intent of this joint plan that any problems or differences that may arise between the parties be resolved quickly through early, direct, and open communication by those personnel directly involved in the dispute. If necessary, the Chief Investigator of the Fraud Division and the prosecutor in charge of the D.A.'s insurance fraud program may be called upon to resolve any dispute, concentrating on the best interests of the overall insurance fraud program. -! .~ Edward ). n rey ~' Chief Investigator ` Butte County District Attorney ~/, s,%,~ Date - ~ ~. ~ ~~ K thryn L. Scholz Chief Investigator, Fraud Division California Department of Insurance ~,/~.~-ff~~ Date