A pattern of suspicious kitchen fires — apparently set by homeowners trying to collect insurance money — has led state investigators and insurance companies to work together to uncover the bogus claims.
Two state task forces are now investigating the trend in kitchen fires.
South Florida had nearly half of the state's fraud-related home arson cases investigated by the Florida Division of Insurance Fraud in fiscal year 2010-2011, state records show.
State and private investigators say the problem largely can be blamed on a surge of homeowners setting their kitchens on fire so they can renovate with insurance money. Ultimately, the scheme could mean higher premiums for other policyholders.
"It's scary, because there's a lot of money going out to pay these claims," said Herb Price, who investigates insurance fraud in Florida for the National Insurance Crime Bureau.
Investigators have spotted a pattern: First, a homeowner leaves food cooking on the stove while they rush to the store for a missing ingredient. The oil then supposedly catches fire and a pan falls on the floor and breaks a tile. A public adjuster, who earns a percentage of the claim payout, inflates the estimate for repairs and renovations.
The number of suspicious insurance claims linked to home arson more than doubled in Florida between fiscal years 2007-2011 — from 31 to 74 — according to the Division of Insurance Fraud. Many of those came from South Florida, where 28 cases were reported in fiscal year 2010-11 in Miami-Dade, Palm Beach and Broward counties.
The state set up two task forces in South Florida to investigate suspicious kitchen fires, and their work has resulted in the arrests of several public adjusters and Miami homeowners.
More cases are under investigation in Broward and other parts of the state, said Price, of the National Insurance Crime Bureau.
"It first looked like it was a small ring of people in Miami. Now it's spread to a lot of people," said Price. "They think it's a good way to fund a new kitchen renovation."
Investigators with State Farm Insurance in Florida are spending a lot of time and money looking into the suspicious kitchen-fire claims, which can cost up to six figures each, said Rich Wickliffe, who oversees State Farm's investigation unit in Florida.
"You have people who can't really sell their homes and they look at their lime-green kitchen and want something else," said Wickliffe. It is unclear how much these fraudulent claims are costing other policyholders, he said.
In May 2010, the state's Kitchen Fire Task Force arrested five Miami public adjusters for their roles in two kitchen-fire schemes, according to a Miami-Dade arrest warrant.
A homeowner told investigators that adjuster Jorge Antonio Espinosa, 34, used a hammer to smash kitchen tiles in her southwest Miami-Dade house. The woman's kitchen appeared to have accidentally caught fire when she left chicken frying on the stove.
Espinosa broke the tiles to make it look like damage from the pan falling so they could get more money from Federated National Insurance Co., the report stated.
Espinosa submitted a claim for $69,000, of which he would keep a percentage. He and four of his employees later were arrested on numerous charges, ranging from organized scheme to defraud and grand theft to tampering with evidence. The result of the case is still pending in Miami-Dade Court.
It's unclear if the homeowners are under investigation for arson or fraud.
The scheme has spread through word of mouth as people hear about payouts that cover a complete kitchen remodeling, according to a 2010 report of the Florida Department of Financial Services.
One red flag is that the homeowner never calls the fire department, which it is not necessary to file an insurance claim. Instead, the person brings in a public adjuster to assess the damage. By the time an insurance company sends an investigator, the kitchen has been cleaned up.
"These are incredibly difficult claims to prove," said Chris Neal, a State Farm spokesman.
Few investigations lead to arrests and even fewer to convictions, state records show. In most cases, an unscrupulous public adjuster tells homeowners how to start the fire and get away with the scheme, the state financial services report said.
"The public adjuster knows how to coach them," said Wickliffe of State Farm. "Lo and behold, they get a whole new kitchen."
On June 30, 2010, state investigators in Davie trained about 150 public adjusters and investigators about how to spot red flags in kitchen fires. The state is required to investigate each suspicious claim to keep property insurance rates from going up, said Lynne McChristian, the Florida representative of the Insurance Information Institute.
Sometimes, investigators are able to recover fire debris and test it for accelerants such as gasoline or lighter fluid. But most often, homeowners have cleaned the evidence by the time investigators are called in. When accelerants are detected, police can build a good arson case, McChristian said.
In 2009, a Hialeah man was arrested for arson and insurance fraud after lab tests found traces of gasoline in his kitchen fire.
Cristain Rodriguez Acosta admitted to setting the fire and causing $100,000 in damage to his home to renovate his kitchen with insurance money, according to the State Fire Marshal's Office. The outcome of that case was unavailable in Miami-Dade Court records.
"Most people don't think of arson as insurance fraud, but it is," McChristian said. "All policyholders end up paying for it."
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