Fraud News: Disaster Relief Scheme, Doctor Scams Workers’ Comp Insurers

Federal Prison for East Texas Family Members Guilty of Stealing Hurricane Relief Funds

An East Texas couple and their adult daughter were each sentenced to federal prison recently for their roles in stealing federal funds that were intended to aid victims of Hurricanes Rita, Katrina, Ike and Dolly.

This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Houston, FBI, Internal Revenue Service’s (IRS) Criminal Investigation, U.S. Department of Housing and Urban Development (HUD), and the Texas State Auditor’s Office.

Walter Diggles was sentenced to nine years in federal prison and ordered to pay $1,326,049.91 in restitution to the government. Rosie Diggles and Anita Diggles were each sentenced to 54 months in federal prison and ordered to pay restitution jointly to the government in the amount of $971,143.57. Walter and Rosie Diggles are from Jasper, Texas; Anita Diggles is from Houston, Texas.

All three were convicted Aug. 3, 2017, of conspiracy to commit wire fraud and wire fraud. Additionally, Walter Diggles was convicted of 11 counts of wire fraud, three counts of theft concerning programs receiving federal funds, and three counts of money laundering. Rosie Diggles was also convicted of 10 counts of wire fraud and one count of money laundering.

U.S. Attorney Joseph Brown, Eastern District of Texas, hopes the sentences will deter future criminals from taking advantage of disaster victims. “The defendants stole from the taxpayers, and these kinds of frauds take money away from real people – disaster victims,” said Brown. “This was an appropriate sentence, and hopefully it will help deter some of this type of behavior the next time.”

IRS Dallas Field Office Special Agent in Charge Tamera Cantu believes the sentences demonstrate the commitment by law enforcement agencies operating in Texas to promote open and honest government and to prosecute anyone who violates the public trust. “Today’s sentences underscore our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violate the public’s trust,” said Cantu.

Contractors, Companies Admit Stealing From Sandy Victims

A New Jersey couple and their home improvement companies have admitted stealing hundreds of thousands of dollars from more than 20 victims who hired them to repair or rebuild their homes after Superstorm Sandy.

Jeffrey Colmyer and Tiffany Cimino, of Little Egg Harbor, pleaded guilty Tuesday to theft by failure to make required disposition of property. Colmyer also pleaded guilty to money laundering on behalf the couple’s companies, Rayne Construction Management Services and Colmyer & Sons Construction.

State authorities will recommend that Colmyer receive a seven-year state prison and that Cimino get probation when they are sentenced Sept. 7. They say the couple stole more than $1.4 million, mostly Sandy relief funds, and used much of the money to gamble and buy luxury items.

California Doctor Charged in Workers’ Comp Fraud Case

The Riverside District Attorney’s Office has charged a doctor with offices in Corona and Wildomar with seven felonies related to a workers’ compensation insurance fraud scheme.

Dr. Sanjoy Banerjee, of Corona, was charged on May 29, 2018, with two counts of insurance fraud and five counts of perjury. He has since posted bail and is scheduled to be arraigned on July 7, 2018, at 8:30 a.m. in Dept. 61 at the Hall of Justice in Riverside.

An investigation conducted by the DA’s Bureau of Investigation found that from November 2014 through December 2016, Banerjee, a Wildomar- and Corona-based workers’ compensation pain management doctor, illegally self-referred workers’ compensation patients to a clinical laboratory and an office-based surgical center he owned. Through that laboratory and surgical center, Dr. Banerjee billed more than $180,000 for urine toxicology testing and/or epidural injections.

Dr. Banerjee also reportedly signed at least five doctor’s reports declaring under penalty of perjury he had not referred patients to his own companies. The investigation revealed that Dr. Banerjee referred some of his workers’ compensation patients to his business, Rochester Imperial Surgical Center, which was located in a patient exam room inside the Pacific Pain Care office suite in Wildomar.

The case, RIF1802535 is being prosecuted by Deputy DA Kristen Allison of the DA’s Insurance Fraud Team.