A Doctor and 532 Others Indicted for Mail and Social Security Fraud Conspiracy

This press release from the FBI includes a statement that 84 counts of a 709-count indictment related to misuse of children’s or dependents’ Social Security numbers in furtherance of the fraud scheme:

SAN JUAN, PR—A federal grand jury has issued a 709-count indictment, charging 533 defendants with mail fraud conspiracy, mail fraud, social security fraud and one forfeiture count, announced Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. Doctor Ubaldo Planell-Pabon, of Lares, Puerto Rico, is the lead defendant in this indictment. The victim of the offenses charged in the indictment was American Family Life Assurance Company (AFLAC), which paid out nearly $7 million to its policyholders as a result of the fraudulent scheme.

The indictment, which was presented on Jan. 18, 2011, alleges that between the years 2004 to 2008, Planell-Pabon falsely completed and signed the physician statement section of AFLAC’s Accidental Injury Claim Form and/or prescription form, falsely certifying injuries for AFLAC claimants and/or policyholders. He falsely represented that the claimants had suffered injuries, when in fact they had not sustained any such injuries, and Planell-Pabon never conducted a physical examination of any of the claimants. Planell-Pabon was paid between $10 and $20 by the AFLAC claimants for each false claim form that he completed and signed, and caused a total disbursement by AFLAC of at least $6,926,374.00, by way of checks, that were sent to the policyholders through the U.S. Postal Service.

Counts 625 to 709 charge defendants with Social Security fraud for the misuse of dependent Social Security numbers. Defendants used Social Security numbers belonging to their children/dependents on AFLAC claim forms in furtherance of the conspiracy to commit mail fraud.

“The submission of false injury claim forms on behalf of insured individuals caused AFLAC to disburse close to seven million dollars for injuries which were non-existent. The price of this illegal scheme is ultimately paid by the consumers, whose insurance premiums will increase to cover the loss sustained by the company as a result of these fraudulent claims. We will continue to investigate and prosecute those who devise and participate in these fraudulent schemes to the full extent of the law,” stated U.S. Attorney Rodriguez-Velez.

Special Agent in Charge Edward J. Ryan, of the Office of the Inspector General (OIG), Office of Investigations, Social Security Administration said: “This investigation illustrates our office’s commitment with other law enforcement agencies to the aggressive pursuit of the intentional misuse of the Social Security Number. We will continue our strides to preserve the integrity of the SSN and pursue illegal activity relating to its misuse. The cooperative efforts of these agencies have ensured the successful outcome of this investigation involving the misuse of SSNs for the purpose of personal financial gain. I would like to thank the FBI and the U.S. Attorney’s Office, District of Puerto Rico for their sustained partnership and commitment in addressing this critical issue.”

“The 533 individuals charged in this indictment, of which one defendant is a medical doctor, submitted fraudulent injury claims which caused benefits to be paid by AFLAC. I wish to point out that the ultimate victims of this scheme are the consumers, you and me, whose insurance premiums will increase to cover the loss sustained by the insurance company,” said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office. “We must continue the fight against fraud and corruption because the statistics show it eventually ends up affecting all of us in higher prices for goods and services.”

If convicted, the defendants could face a maximum penalty of 20 years in prison and/or fines of up to $250,000.

This investigation was conducted by the FBI and Social Security Administration – OIG and the case is being prosecuted by Assistant U.S. Attorney Julia Díaz-Rex.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

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