USDOJ: Two Doctors and 101 Individuals Indicted and Arrested for Mail Fraud Conspiracy

For Immediate Release
December 15, 2009 United States Attorney's Office
District of Puerto Rico
Contact: (787) 766-5656

Two Doctors and 101 Individuals Indicted and Arrested for Mail Fraud Conspiracy

SAN JUAN, PR—Late yesterday, a federal grand jury issued a 162-count indictment, charging 101 defendants with mail fraud conspiracy and mail fraud. A separate six-count indictment, related to the same scheme, charged six individuals with mail fraud conspiracy and mail fraud, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Doctors José A. Fontanillas-Pino and Edwin Pérez-Loran, of Quebradillas, Puerto Rico, are the lead defendants in each indictment. The victim of the offenses charged in both indictments was American Family Life Assurance Company (AFLAC), which paid out over $800,000 to its policyholders as a result of the fraudulent scheme.

The first indictment alleges that from June 2004 until September 2008, Dr. Fontanillas-Pino, who has a specialty in pediatrics, 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 Dr. Fontanillas-Pino never conducted a physical examination of any of the claimants. Fontanillas-Pino was paid $10 by the AFLAC claimants for each false claim form that he completed and signed, and caused a total disbursement by AFLAC of at least $877,925.00 in U.S. currency, by way of checks, that were sent to the policyholders through the U.S. Postal Service.

Defendant number two of the first indictment, Luis Pagán-González, was an AFLAC accident insurance policyholder who at times served as an intermediary between other AFLAC policyholders and Dr. Fontanillas. Pagán-González recruited and charged the policyholders $20 and paid Dr. Fontanillas $10 from each false claim form that he completed and signed. Defendant number 59, Ulises Ramos-Ramírez, was also an AFLAC accident insurance policyholder and at times also served as an intermediary between other AFLAC policyholders and Dr. Fontanillas. The remaining defendants were AFLAC accident insurance policyholders, spouses and/or dependents who submitted false claim forms for non-existent injuries to AFLAC.

The second indictment alleges that Dr. Edwin Pérez-Loran 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. Dr. Pérez-Loran did not conduct a physical examination in the majority of cases of AFLAC claimants and was paid $10 for each false claim form he completed and signed. At the same time, the doctor paid defendant Edgardo Gotay $4 for each false claim form that Gotay filled. The other defendants: Rafael Rosado, Wilmarie Verges-Pérez, Rosa E. Nieves-Rivera and Israel Guzmán-Valle are charged in both indictments.

“The doctors charged today used their medical licenses to unlawfully enrich themselves at the expense of AFLAC. Their submission of false injury claim forms on behalf of insured individuals caused AFLAC to disburse over $800,000 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.

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 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.