Thoroughly investigating high-value insurance claims helps defend against fraud
It was dusk on a Saturday in the spring in 2010 and the courtyard of the Heavenly Acres Apartments in South Whittier, California, was alive with the hum of children playing, mothers chatting and men home from work enjoying a beer in the cool of the evening air.
As kids darted playfully along the walkways of the three-story apartment building, Ricardo Romero entered the courtyard and climbed the stairs to the second floor. Moments later, the unthinkable happened: Romero somehow fell over the railing and dropped some 12 feet, landing head first on the concrete walkway below.
Such was the short flight and hard landing of Ricardo Romero, a near-death experience for the 26-year-old Mexican immigrant that sent him into a coma and, though he emerged from it, loss of sight in his right eye and a metal plate in his skull. All in all Romero had massive cranial injuries that required a variety of long-term medical attention and rehabilitation.
It was not long before Romero retained a clever attorney who filed a lawsuit against the apartment complex alleging that the railing on the second floor walkway was more than six inches shorter than legally required by the California State Building Code. The 1960s building wasn’t old enough to qualify for a ‘grandfather’ exemption. In a sworn deposition, Romero testified that he was walking along minding his own business when he slipped and fell over the railing.
Facing a multi-million dollar claim the insurance company considered settling the Romero case, a move that would certainly have meant higher premiums for the apartment owners. But the insurer’s outside counsel did not buy Romero’s Mr. Magoo story, and retained Sapient Investigations, Inc. to ascertain what really happened that afternoon at the Heavenly Acres Apartments. That was a wise move because, as it turned out, nothing Romero said was true.
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According to the Federal Bureau of Investigation, some $40 billion worth of fraudulent
claims are filed against insurance companies each year in the United States.
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According to the Federal Bureau of Investigation, some $40 billion worth of fraudulent claims are filed against insurance companies each year in the United States, a figure that does not include health insurance related fraud. This means that a substantial portion of all claims are fraudulent. As the Romero case highlights, attorneys and insurance adjusters should investigate all high-value insurance claims with experienced, licensed investigators as a deterrent to those who would scam the system.
As Romero told it, he had merely returned home from a family party and was visiting a friend’s apartment when he slipped, fell and tumbled over the second floor railing. He couldn’t remember much else due to his injuries.
Initially, little information emerged to undermine Romero’s narrative. Most residents of the Heavenly Acres apartments, a complex in a predominantly Latino neighborhood that has a significant gang presence, did not want speak with investigators or get involved.
Sapient Investigations’ lead investigator on the case said that the biggest obstacle in these types of cases is gaining people’s trust: “Environments like that can be challenging for investigators. The people living there often assume you are law enforcement, and they don’t want to be seen as a snitch. And in some apartment complexes like Heavenly Acres the resident may have legitimate concerns about being targeted for retaliation if they are seen speaking with investigators.”
Over a number of weeks, however, Sapient Investigations was able to develop a wide array of witnesses to Romero’s fall, ranging from a six-year-old boy to a grandmother who spoke only Spanish.
According to eyewitness accounts, Romero sauntered into the complex that evening visibly drunk carrying a plastic trash bag full of beer slung over one shoulder. Romero ascended the stairs to the second floor and stopped in at a friend’s apartment.
Danny Valenzuela knew trouble had arrived when he saw who was pounding on his security screen. Valenzuela grew up at Heavenly Acres and was friendly with Romero, but knew him as a guy with a drug problem who frequented the apartments of drug pushers in the complex.
“He was known around the apartments as a hardcore meth user,” Valenzuela said. “And that night he showed up here he was already wasted. I mean just gone.” Romero asked Valenzuela if he could come inside his apartment and when Valenzuela told him no, Romero then asked to borrow some money. “He wanted to get high but he needed a few bucks,” Valenzuela said. “I told him no, that I didn’t have any. He had already borrowed a hundred dollars from me that he hadn’t paid back, so I wasn’t going to give him any more money.”
Striking out with Valenzuela, Romero made his way down the walkway to another apartment in the center of the complex. Witnesses told Sapient’s investigators that the apartment was home to a woman named “Tutia,” a known drug dealer, and her two sons who were suspected of being members of a local street gang.
When he arrived that evening, Romero allegedly owed Tutia several hundred dollars for drugs he had consumed on credit, and the woman and her posse weren’t in the mood for another IOU. According to Valenzuela, he had previously witnessed Romero being beaten up by several gang members whom he had failed to repay for drugs.
This time, the stakes would be much higher.
Long-time resident Angelica Avila told investigators that she was cooking in her kitchen when Romero walked into Tutia’s unit. “That’s when the shouting and the screaming started,” Avila said. “I could hear her yelling ‘You owe me money and I want it now. Give me my money now. I want my fuckin’ money.’”
Amid the heated exchange, Avila said she heard a stampede of feet and a brief scuffle in front of Tutia’s apartment, and then everything fell silent for a moment before she heard the horrible dull thud of Romero’s skull cracking on the cement in the courtyard below.
Lupe Gomez was standing in her living room when she heard something big hit the ground in the courtyard. Outside of her screen door, Gomez saw a man’s crumpled body laying on the walkway. She dialed 911 as she hustled to Romero’s side and tried to assist him. Amazingly, Romero began to get up although his right eyeball was hanging out of its smashed socket and blood was pouring from his nose and mouth.
As she urged Romero to stay on the ground, he kept muttering the same thing over and over: “Why did they do that to me?” Gomez recalled that despite his injuries Romero made several comments that led her to believe he was thrown from the landing. “He kept saying he didn’t understand why they had done that to him and said that he wanted to go back up there and fight them.”
Gomez said that as a crowd began to gather around them, she looked up to see Tutia leaning over the second floor railing, a cigarette balanced precariously between her lips, gazing nonchalantly at the grisly scene below. Two young men were standing silently alongside her.
“Tutia just shrugged and said ‘he must have fallen’ and then walked back inside her apartment,” Gomez recalled.
Judging by the descriptions offered by a number of witnesses including Jorge Montes, a handyman at the apartments that was also in the courtyard that evening, a lot of people had been outside in the courtyard when Romero went over the rail.
However, when Los Angeles County Sheriff’s deputies canvassed for witnesses while paramedics transported Romero to the hospital no one told them what had really happened. According to Sheriff’s call logs, deputies reported the incident as an “accident.” However, the deputies did note that Romero was “extremely 390” – cop lingo for being severely intoxicated – which contradicted his sworn statement that he was not drunk.
Over time, Sapient’s investigative team made more headway than Sheriff’s deputies getting people to talk. But even then there were limits to what they could get residents to divulge.
“We believe that there were numerous eyewitnesses to Romero getting tossed over the railing, but they would only tell us part of what they saw that day,” the lead investigator said. “They were understandably scared to point a finger at who did it. And who can blame them? These were people who might have killed a guy over a couple hundred bucks. What do you think they’d be willing to do to a witness who fingered them?”
Despite their wariness, four witnesses were ultimately convinced by Sapient’s team to give formal depositions in the lawsuit.
Outside counsel for the insurance company was understandably thrilled that Sapient definitively demonstrated that Romero had lied about the whole affair and likely perjured himself. Efforts by Romero’s attorney to settle the matter out of court were rebuked and the lawsuit is now headed for trial.
In the end, the Romero case underscores the value of civil defense attorneys and insurance companies procuring reliable intelligence from the field on all significant cases.
“The bottom line is in this type of litigation the defense team should take a second and even third look at a plaintiff’s allegations and shake every tree out there to get to the truth,” the lead investigator said. “Had our client not committed the resources for a comprehensive investigation, Romero’s wholesale lie about what happened might have been accepted as fact.”