32 South Texas Residents Charged With Fraud as a Result of “Operation Sitting Duck” More Than 20,000 Allegedly False Insurance Claims Submitted to AFLAC

June 19, 2011

Federal Bureau of Investigation (FBI) on June 17, 2011 released the following press release:

“McALLEN, TX – “Operation Sitting Duck,” an ongoing investigation into fraudulent insurance claims filed with the American Family Life Assurance Company (AFLAC), has resulted in the return of eight separate but related sealed indictments, charges of conspiracy and wire fraud and the arrest of 32 South Texas residents for their alleged involvement in a scheme to defraud AFLAC of millions of dollars by allegedly filing false injury claims, United States Attorney José Angel Moreno announced today along with Special Agent-in-Charge Cory B. Nelson of the FBI San Antonio field office.

“Simply put, this fraud scheme is a robbery without a gun of the self-insured American taxpayer,” said Nelson, “and as such, the FBI considers it to be a direct threat to the critical U.S. health care infrastructure designed to be available for Americans in their time of medical need.”

According to the indictments, which were returned under seal on Tuesday, June 14, 2011, the defendants-who include a local police officer, county employees and school teachers-purchased policies under the AFLAC Accident-Only Insurance Plan from several area insurance agents at various times beginning in July 2001. Under the plan, a policyholder could file a claim with AFLAC and obtain a cash benefit if he or she received treatment from a physician for a legitimate, accident-caused injury including lacerations, bruises, burns, fractures or dismemberment.

“Greed, simple and pure, has allegedly driven a police officer, teachers, county government employees and others to participate in a multi-million dollar insurance fraud,” said Moreno.

That same greed now makes them participants in our criminal justice system and subject to participation in our prison rehabilitation system. Insurance fraud affects every legitimate provider and beneficiary of our healthcare system, and we will vigorously pursue those who seek to profit illegally from it.”

The indictments allege that, from July 2001 through April 2010, the defendant policyholders routinely delivered lists of fake accidents and injuries to two physicians who worked together at a clinic in Reynosa, Tamaulipas, Mexico. The physicians allegedly prepared an “accident report” for each fake injury in exchange for a cash kickback of approximately $15 per accident report. In each report, the indictment alleges the physicians falsely claimed they had provided treatment and prescribed medication for the purported injury. In addition, the physicians and defendants allegedly attempted to conceal their scheme in numerous ways including agreeing to use injuries such as lacerations and minor burns as opposed to more serious injuries that paid higher cash benefits and could potentially attract a greater level of scrutiny by AFLAC’s claims department.

Over time, the defendants-many of whom allegedly recruited one another to purchase policies and join the alleged scheme-submitted approximately 21,600 allegedly false and fraudulent insurance claims, each accompanied by the physicians’ accident reports, to AFLAC’s claims department in Columbus, Ga. Based on the claims, AFLAC disbursed a total of approximately $3 million in insurance proceeds to the defendants.

Each count of conspiracy and wire fraud carries a sentence of up to 20 years in federal prison without parole, a $250,000 fine and mandatory restitution.

The indictments listed below have been unsealed as to each of the following defendants who were arrested by FBI agents yesterday and today:

Indictment #1

Name Age City of Residence
Lucila Alcala

40

Edinburg, Texas

Lilly Perez

32

La Villa, Texas

Desiree Rodriguez

34

Edinburg, Texas

Jose D. Rodriguez

27

Edinburg, Texas

Steven Betancourt

39

Edinburg, Texas

Maria C. Alaniz

39

Elsa, Texas

Patricia Cerda-Flores

44

Palmview, Texas

Dalia Cerda-Delgado

39

Palmview, Texas

Leonor B. Salinas

46

Elsa, Texas

Maria Guzman

40

Edinburg, Texas

Rebecca Castillo

41

Edinburg, Texas

Ninfa Reyes

38

Edcouch, Texas

Noemi Villareal

60

Edinburg, Texas

Indictment #2

Idaleen Sanchez

34

Edinburg, Texas

Norma Sanchez

41

Edinburg, Texas

Valerio Ramos

55

Edinburg, Texas

Jose Guerra, Jr.

37

La Joya, Texas

Eddie Guerra

34

Alamo, Texas

Indictment #3

Mary Cedillo

65

Edinburg, Texas

Martha Ortega

57

McAllen, Texas

Yolanda Segovia

55

McAllen, Texas

Candida Chavez

34

McAllen, Texas

Lori Chavez

30

McAllen, Texas

Anissa Chavez

31

McAllen, Texas

Homer Cedillo, Jr.

41

Edinburg, Texas

Indictment #4

Norma Flores

54

Palmview, Texas

Nora Palacios

53

La Joya, Texas

Georgina Flores

33

Mission, Texas

Indictment #5

Nancy Rodriguez

31

Pharr, Texas

Maria Cantu

56

McAllen, Texas

Indictment #6

Beatriz Carreon

42

Edinburg, Texas

Indictment #7

Minerva Murguia

43

Sullivan City, Texas

The defendants have either made or are awaiting an initial appearance before a U.S. Magistrate Judge in McAllen federal court and either have or are expected to be ordered released on bond pending trial. Four indictments remain partially sealed and warrants remain outstanding for others charged but as yet not in federal custody.

The ongoing investigation is being conducted by the McAllen office of the FBI. Assistant United States Attorney Greg Saikin is prosecuting the cases.

An indictment is a formal accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless and until convicted through due process of law.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red

Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

Bookmark and Share