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Falls Township Woman Pleads Guilty to Six-Figure Insurance Scam

January 12, 2016

FOR IMMEDIATE RELEASE
Contact: Gregg Shore, 215.348.6202, gdshore@buckscounty.org

A Falls Township woman who defrauded an insurance company by filing a half-million dollars in phony medical claims pleaded guilty today to several fraud-related felonies.

Cynthia Clarey, 60, received payments totaling nearly $135,000 for cancer treatments that never happened before her insurer grew suspicious and ultimately contacted law enforcement authorities.

Between February 2013 and December 2014, Clarey submitted claims for 462 cancer-related treatments with a total cost of $503,213. Along with the claims were fraudulent supporting documents that Clarey had created on her home computer and typewriter.

These included invoices, bills and correspondence bearing the names, purported signatures and other identifying information of physicians and facilities that Clarey claimed had provided cancer treatment for her husband and herself. Neither she nor her husband has cancer.

Clarey pleaded guilty to insurance fraud, theft by deception, attempted theft by deception and five counts of identity theft – all felonies.

“I’m a terrible person for doing that,” she told Bucks County Judge Wallace H. Bateman Jr., who accepted the plea.

Clarey said she spent most of the insurance money to pay bills and to take care of her husband, who is in poor health and who lost his job a few years ago.

Bateman declined to sentence Clarey immediately, saying he first wanted to see the results of a mental health assessment that he ordered.

Assistant District Attorney Gregg Shore, head of the county’s insurance fraud unit, urged Bateman to sentence Clarey to state prison time. "It's an outrageous case," he said in court.

Defense attorney John Kerrigan is seeking a sentence of probation.

County detectives Timothy Perkins and Eric Landamia began investigating Clarey last summer after receiving information from Allstate Benefits, which provides supplemental insurance for medical costs that exceed primary insurance coverage. The insured party is supposed to obtain bills or invoices from a medical provider, and then submit the documents to Allstate Benefits for reimbursement.

Clarey had obtained a cancer treatment policy in 2011, when a doctor had suspected that her husband might be suffering from cancer. That suspicion proved false, but in February 2013, Clarey nonetheless began submitting claims for reimbursement of prostate cancer treatment for her husband, primarily chemotherapy and radiation.

By June 2014 a claims examiner for Allstate Benefits reviewed Clarey’s file and insisted that medical records from treating physicians be submitted by Clarey before further payments would be made.

Allstate Benefits instructed Clarey to submit a form to St. Mary Medical Center in Langhorne so that the hospital would release her husband’s medical records. Clarey never did so, and Allstate Benefits denied all pending claims for her husband’s purported cancer treatments. Despite the denials, Clarey never complained to Allstate about them.

Instead, she began in July 2014 to submit claims for her own chemotherapy and radiation treatments. Clarey contended that she had been diagnosed with cancer and was being treated by Regional Gastro Consultants (RGC) in Yardley. She submitted bills, invoices and correspondence to Allstate Benefits, purportedly from RGC. But when an Allstate Benefits claims examiner contacted RGC for further documentation, an RGC representative stated that Clarey never had been seen there as a patient.

Allstate Benefits sent St. Mary and RGC packages of documents that the insurer had received from Clarey to support her claims. Both providers told Allstate that the documents – which contained repeated misspellings of basic words and incorrect address and phone information – had not been generated by them.

Detectives Perkins and Landamia interviewed Cynthia Clarey on Aug. 26. She admitted creating fraudulent invoices and claims documents on her home computer and typewriter, and then faxing them from her employer’s office.  Investigators found that Allstate Benefits had paid Clarey $134,990 for the more than $500,000 in false claims she submitted.

Clarey told the detectives that she never had been diagnosed with or treated for cancer, and that her husband had not received any of the cancer treatments she had claimed in the phony invoices. She said she had committed the crimes to pay bills that had accumulated due to financial hardship and her husband’s poor health.

The Bucks County District Attorney’s Insurance Fraud Unit was created in 2015 with funding provided by the Pennsylvania Insurance Fraud Prevention Authority. The unit works closely with insurance company investigators and the Pennsylvania State Insurance Commission to identify and prosecute Homeowners, Auto, Medical and Workers Compensation Insurance fraud, as well as insurance fraud associated with illegal drug activity.

Approved for release by Matt Weintraub, Chief of Prosecution.


32 Comments

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    Let me be clear, I do not in anyway, shape or form condone her actions, However, all those people oh Wall Street who did the same thing and not one of them were EVER PROSECUTED for it, not to mention the outrageous bonuses they received is nothing more than living proof of the huge divide between the haves and the have nots, the wealthy and the rest of the American people..
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