$600K Miami-Dade Home Insurance Fraud Scheme Dismantled, Officials Say

An insurance fraud scheme in Miami-Dade – the type of scam that leads to increased insurance premiums for all consumers – has been dismantled, according to officials.

Source: NBC6 | Published on May 2, 2019

Nine people have been arrested over the $600,000 Miami-Dade homeowners insurance fraud scheme. The arrests were the result of a year-long fraud investigation named "Operation Rubicon."

"Arrests include individuals and business owners allegedly involved in a large-scale organized scheme to defraud insurance companies out of more than $600,000 in fraudulent insurance claims," Florida Chief Financial Officer Jimmy Patronis said in a statement.

Miami-Dade County State Attorney Katherine Fernandez Rundle announced the arrests on Tuesday during a press conference. She said the homeowners insurance scam was related to water damage claims.

Rundle identified the leader of the alleged scheme as public adjuster Barbara Maria Diaz de Villegas. The nine people arrested are the alleged organizers of the scheme, including Diaz de Villegas, an insurance agent and a plumber.

Officials will later arrest 25 homeowners accused of participating in the scheme. Rundle described Diaz de Villegas as the "essential element of the fraud."

"Everyone's a victim in one way or another," Rundle said. "Every dollar that is stolen by these fraudsters is replaced by the dollars taken from your pockets. Every single one of us ... and we pay for it in the form of higher insurance premiums."

Fraud costs the United States up to $80 billion a year and U.S. families up to $700 a year in increased premiums, according to Rundle.

"It's scams like the one we are describing today that play a huge role ... in what many believe are exploding insurance rates," Rundle added.

Rundle detailed the scheme in an example. She said Diaz de Villegas would recruit a homeowner who would agree to participate in the scheme.

Diaz de Villegas would send a contractor to create damage at the property and then contact an insurance agent to ask he take out more coverage on the policy or create a new policy if there was not enough money under the current policy to cover the damage, Rundle said.

The homeowners who participated had no insurance or insufficient insurance. Damage – which could occur before a policy existed – would be exacerbated and the fraudulent claim would be increased, according to Rundle.

Depending on the individual cases, those arrested face charges of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), conspiracy to violate RICO, filing a fraudulent insurance claim and grand theft – facing up to 30 years in prison.

Prosecutors are seeking a $500,000 bond for Diaz de Villegas.

The investigation was launched after insurance companies in South Florida and the Tampa area contacted authorities about possible fraudulent residential insurance claims.

Diaz de Villegas "allegedly utilized the services of unscrupulous Florida companies, including water mitigation and restoration companies, insurance agencies and agents, appraisers, and willing homeowners to allegedly commit the fraud," Patronis' office said.