Texas
Department of Insurance Issues Top Ten Fraud
List
News Release Date: 4/18/2006
Category: Fraud
AUSTIN – Each year the Texas Department of
Insurance (TDI) investigates hundreds of cases
of suspected fraud. Its staff of fraud
investigators (who are licensed peace
officers) investigate fraud alleged to have
been committed by persons engaged in the
insurance business as well as claim fraud
committed by policyholders, service providers
and others.
In 2005 and the first part of 2006, TDI’s
Fraud Unit successfully prosecuted 114 cases
of people who got caught trying to make money
through insurance fraud. Here, in no
particular order, is TDI’s list of the top ten
insurance fraud offenders:
1. Walter Neuls , former Colonial Casualty
Insurance Company President, along with his
wife Deidra who served as Vice President,
schemed to defraud the company out of
$750,000. The Neuls used the money to fund an
elaborate lifestyle, including travel and
extravagant personal purchases, resulting in
the insolvency of Colonial Casualty. TDI
subsequently placed the company in
receivership. Both husband and wife received
120 months deferred adjudication for the
offense of misapplication of fiduciary
property and were ordered to pay $750,000 in
restitution.
2. David Brabandt and his sister Barbara Del
Aguila operated Aguila Insurance Agency in
Dallas. Neither held valid licenses to sell
insurance in Texas (Brabandt had never been
licensed to sell insurance in Texas and
Aguila's license was cancelled in 1998). They
were charged in multiple indictments in April
2005 with taking payments from over 300
victims and not purchasing insurance for them.
They pled guilty on Feb. 1, 2006 to two felony
charges, were sentenced to two years in the
Texas Department of Corrections, and were
ordered to pay $183,861.29 in restitution.
3. Jack Miller Sr., a former insurance agent,
used the identities of unsuspecting consumers
to submit 30 fraudulent applications for life
insurance to two different insurance
companies. Miller’s scheme enabled him to
obtain $21,850.40 in advance commissions on
those purported sales. Miller pled guilty in
Austin to the state jail felony charge of
Aggregated Theft and was sentenced to nine
months in a Texas State Jail Facility.
4. An investigation into a staged accident
ring in the Dallas area netted the
apprehension of nine individuals. The nine
were part of a ring that submitted 71
fraudulent accident claims totaling almost
$600,000. Several of the claims were filed
using identifying information of people
without their knowledge To date, seven of the
nine have been convicted of Engaging in
Organized Criminal Activity. Bobby Williams
received 10 years deferred adjudication and
was ordered to pay $55,021.61 in restitution;
Wallace Williams received 10 years deferred
adjudication and was ordered to pay
restitution totaling $109,729.29; Michael
Williams was sentenced to 7 years in the Texas
Department of Criminal Justice; Kenneth Clewis
was sentenced to 5 years in the Texas
Department of Criminal Justice, was fined
$1,500 and was ordered to pay restitution in
the amount of $598,431.69; Lushiul Charles
Boston received 10 years probation, was fined
$3,000 and was ordered to pay $89,000 in
restitution; Nathaniel Williams received 5
years probation and was ordered to pay
restitution in the amount of $59,913.20; and
Brandon Williams received 10 months deferred
adjudication and was fined $1,500.
5. Donn A. Bauer, using a company name of
International Diagnostic Technologies,
fraudulently submitted 1,371 health insurance
related claims, totaling $425,682 to insurance
companies for his services as a medical
provider. Bauer represented himself as a
licensed Doctor of Chiropractic, when, in
fact, he is not. Before the scheme was
detected, Bauer was able to receive
approximately $344,679.87 from insurance
companies. Bauer received 72 months probation
for the offense of Insurance Fraud, was fined
$14,000 and was ordered to pay restitution in
the amount of $55,113.91.
6. Dirk Rose continued working for almost
three years while receiving Long Term
Disability benefits and Workers' Compensation
benefits. Insurers paid $103,004.60 to Rose
and medical providers during the course of his
scheme. Rose received 120 months probation for
insurance fraud, was fined $2,500 and was
ordered to pay $81,000 in restitution.
7. Rodney Bigler, a passenger in a vehicle
involved in an accident, submitted a
fraudulent statement to the at-fault driver’s
insurance company for $40,000 in lost wages
attributable to the accident. Bigler pled
guilty to the offense of Insurance Fraud and
was sentenced to two years in the Texas
Department of Criminal Justice.
8. Katie James filed a claim on a credit
disability policy using fraudulent medical
records to support her claim. She received
$8,275 in payments before her scheme was
detected. James was sentenced to 30 days
confinement for Insurance Fraud, was ordered
to serve five years probation, was fined $500
and ordered to pay restitution in the amount
of $8,284.
9. Jose Vega, a former Texas Peace Officer,
filed a claim with his insurer for $7,790.50
in items stolen during a burglary of his
residence. The burglary never happened and the
items were not stolen. Vega received five
years deferred adjudication, was ordered to
complete 260 hours of community service, and
was ordered to pay $7,790.50 in restitution.
In addition Vega was ordered to surrender his
peace officer license to the Texas Commission
on Law Enforcement Officer Standards and
Education.
10. Donald “Tony” Brelsford, a former agent,
received insurance premiums from two business
clients, and instead of forwarding the
premiums to the insurance company, used the
money for his own benefit. Brelsford received
10 years deferred adjudication and was ordered
to pay restitution in the amount of $74,021.
Texas Department of Insurance resources:
To look up an agent, agency, or insurance
company: www.tdi.state.tx.us
For consumer assistance or to file a
complaint:
1-800-252-3439
To report suspected insurance fraud:
1-888-327-8818
