Bureau Structure

The Frauds Bureau was created by an act of the Legislature in 1981 as a law enforcement agency within the New York State Insurance Department. The Bureau's primary mission is to effectively detect, investigate and prevent insurance fraud and to refer for prosecution those persons or groups that commit acts of insurance fraud. The Bureau is headquartered in New York City, with six additional offices across the State: Mineola, Albany, Syracuse, Oneonta, Rochester and Buffalo. For additional information about Bureau staff, please select the designated links below.

• Insurers - please select this link
• Consumers, Agents and Brokers - please select this link

Frauds Bureau investigators are designated as peace officers. This designation gives them the authority to carry firearms and make arrests. Investigators are seasoned professionals with years of experience in law enforcement and insurance fraud investigation.

The Bureau consists of specialized units: Major Case, General, Mortgage and Title, Arson, Auto, Workers’ Compensation, Medical/No-Fault (which merged in 2008), and Upstate.

• Major Case Unit - focuses on the investigation of systemic insurance fraud involving organized conspiracies. This Unit takes the lead in investigating complex insurance cases involving no-fault, commercial rate evasion, health care fraud and workers’ compensation premium fraud.
• General Unit - investigates reports of fraud involving life, homeowners, agents & brokers, larceny, burglary and other types of insurance fraud.
• Mortgage and Title Unit - is solely responsible for the investigation of complaints received by the Bureau alleging mortgage and/or title insurance fraud.
• Arson Unit - interacts with the New York State Office of Fire Prevention and Control, the New York City Fire Department's Bureau of Fire Investigation, the New York City Police Department's Arson Explosion Squad and local fire departments across the State, as well as the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, among others, to coordinate insurance-related arson investigations.
• Auto Unit - investigates individuals who fraudulently report their cars stolen or who possess fraudulent auto insurance identification cards, as well as auto body shop operators suspected of enhancing auto damage and related fraudulent activities.
• Workers' Compensation Unit - investigates individuals who file fraudulent claims related to injuries in the workplace or who collect workers' compensation benefits while they are employed. This Unit also investigates employers who submit applications for workers' compensation and general liability insurance coverage containing false information about the number of employees on the payroll and/or the nature of the work being performed, and employers who submit fraudulent Certificates of Insurance as proof of coverage when in fact no coverage is in place.
• Medical/No-Fault - investigates health care fraud in three major types of insurance: health, private disability and no-fault. The Medical and No-Fault Units merged in 2008.
• Upstate - investigates all types of insurance fraud and includes the Bureau's Albany, Rochester, Syracuse, Oneonta and Buffalo Offices.

In addition, the Bureau has two training officers, both of whom are Certified Firearms Instructors. They are responsible for firearms and in-service training for all investigative staff, as well as conducting training sessions for law enforcement agencies, and industry and community groups.

For additional information about the Frauds Bureau's activities and accomplishments, select this link to the 2008 Annual Report to the Governor.

How the Frauds Bureau Fights Insurance Fraud

Team Building

The Frauds Bureau has been a longtime advocate of team building. Toward that end, collaborative alliances with the insurance industry and law enforcement agencies on the federal, state and local levels during the past year resulted in successful investigations and yielded 755 arrests and 402 convictions throughout the State.

A key factor in achieving that mission is to promote regular and open communication among members of the insurance community, law enforcement and the Frauds Bureau. A strong cohesive fraud-fighting team is essential to making progress in combating this serious crime.

The Special Prosecutor Program is a pilot program initiated by the Insurance Department in which Frauds Bureau attorneys assist local DAs' Offices with prosecutions. In 2008, the program was expanded to ten participating county prosecutors' offices. As part of the program, Frauds Bureau attorneys are cross-designated as assistant district attorneys and assist in all aspects of the cases to which they are assigned.

The Frauds Bureau Partners With Prosecutors in a program initiated in 2003 in which Bureau investigators are assigned to prosecutors' offices to work side-by-side with their investigative staff. During 2008, investigators were assigned to DAs' Offices in Suffolk, Queens, Albany, Westchester and Monroe Counties.

Collaboration with Federal, State and Local Law Enforcement reflects the Bureau's Statewide approach to combating insurance fraud. These efforts resulted in successful investigation, arrests and convictions throughout the State during 2008. In addition, the Bureau is an active participant in numerous task forces and working groups designed to foster cooperation among the many agencies involved in fighting insurance fraud. Participation provides the opportunity for joint investigations, information sharing, networking and honing investigative skills.

Together we can make a difference.

Civil Enforcement and Restitution

Legislation enacted in 1992 granted the Insurance Department the authority to (1) impose a civil penalty of up to $1,000 for the first violation and up to $5,000 for each subsequent violation against anyone who possesses or transfers a forged auto insurance identification card; (2) impose a civil penalty of up[ to $5,000 plus the value of the claim against any person who submits a fraudulent insurance claim; and (3) an appropriate premium reduction for drivers who install anti-theft devices in private passenger autos.

The powers authorized in the 1992 law were subsequently expanded, enabling the Department to impose civil penalties for virtually all categories of insurance fraud. As a result of civil enforcement activities, $1.68 million in penalties was imposed in 2008.

The courts ordered $2.9 million in restitution during 2008 as a result of Frauds Bureau criminal investigations. Additionally, insurers saw savings of nearly $1.2 million in connection with fraudulent claims investigated by the Bureau.

New York Insurance Law/Department Regulation 95

Section 409(a) of the Insurance Law and Regulation 95 require all insurers that meet the criteria delineated in the Law to submit to the Department a Fraud Prevention Plan (Plan) that includes providing for a Special Investigations Unit (SIU). The SIU is responsible for investigating cases of suspected fraud and for implementation of fraud prevention and reduction activities.

Affiliated insurers writing the same lines of business may submit one Plan covering the entire group of insurers. Moreover, some insurers submit multiple separate Plans, each of which addresses different lines of business. At year-end 2008, there were 140 Plans on file.

• Partnering with Prosecutors -- Under a program initiated in 2003, Frauds Bureau investigators are assigned to prosecutors’ offices to work side-by-side with their investigative staff. During 2007, the Bureau had investigators in nine prosecutors’ offices across the State. As of year's end, one investigator was assigned to the Suffolk County DA’s Office full time. In addition, we had one investigator in the Nassau County DA’s Office two days a week; one investigator one day a week in Queens; and one investigator one day a month in both the Putnam and Dutchess County DAs’ Offices. We also had one investigator in the Albany County DA’s Office three days a week, one investigator three days a week in Westchester, one investigator three days a week in the Bronx, and an investigator two days a month in the Monroe County DA’s Office.

• Federal, State and Local Law Enforcement –The Frauds Bureau’s continued efforts to work closely with its fraud-fighting partners in law enforcement and industry reflect the Bureau’s Statewide approach to combating insurance fraud. During 2007, Bureau investigators joined forces with District Attorney’s Offices and insurer Special Investigations Units across the State on a wide range of insurance fraud investigations. We also worked with the NYPD’s Fraudulent Accident Investigation Squad and its Auto Crime Division on no-fault and other auto-related fraud investigations and with the Workers’ Compensation Fraud Inspector General’s Office and the State Insurance Fund on workers’ compensation fraud. Bureau staff have also worked hand-in-hand with the FBI, the U.S. Attorney’s Office, the U.S. Postal Inspector’s Office, the State Police and local police departments and sheriff’s offices throughout the State.

  In addition, the Arson Unit worked closely with the Auto Fraud Unit of the FDNY’s Bureau of Fire Investigation and the NYPD’s Arson Explosion Squad, as well the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Unit also acts as a liaison with the New York State Office of Fire Prevention and Control, as well as local arson units and fire departments across the State.

Directions for 2009

Auto Give-Ups/Auto Arson - Arrests in cases involving auto give-ups spiked by 35% over the past year in New York State, up from 96 in 2007 to 130 in 2008. Fraud experts believe that the downturn in the economy may be a factor in the uptick, as owners abandon their cars or in many cases arrange to have them burned and then report them stolen in an effort to collect the insurance payout. As the economy worsens, car owners may see give-ups as a means to avoid steep car payments or alleviate general debt. The Frauds Bureau has been carefully monitoring the insurance market to keep abreast of fraud trends and will continue to oversee market conditions in the coming months.

Special Investigations Unit Examinations - The Frauds Bureau's examiner staff performed a targeted audit of the SIU of a large auto insurer in 2008 and a Report on Examination will be issued in 2009. The Bureau will continue its examination of SIUs in the coming year. Insurers are selected for targeted examinations from those that have filed a Fraud Prevention Plan with the Department had have a history of complaints and/or concerns pertaining to the SIU operations and Fraud Plans.