PA’s & CHIP MERLIN; “…until proven guilty!”

Despite declining ranks, a decade of reform and record level prosecutions, news of dishonest public adjusters hasn’t abated.  Prompting one subscriber to comment on my “failure” to report recent arrests.  A bit strong I thought. Frequency, after all, can jeopardize classifying some occurrences as news.  Besides most public adjusters are honorable.

Still I didn’t even comment on the arrest of Fausto Espinosa whose son, Jorge, perpetrated the infamous “Case of the Yellow Hammer”.   Jorge shot an unarmed teenager while a Miami-Dade cop and used his violent reputation to further a second career intimidating clients of his public adjusting firm.

Fausto was arrested during a sting operation called “Operation Flames & Flood”  involving 22 other crooks in an enterprise of arson and water damage for hire. Of course, in addition to DNA, “father-son” similarities involved manufactured claims, claim inflation, threats, intimidation and contingency fee contracts.

I also resisted commenting on the recent arrest of Robert Eugene Leverett II,  for his alleged fraudulent inflation of what appeared to be a routine motel fire.  Again, I thought…”What’s the point?”

Then I read Chip Merlin’s substantial postings criticizing CFO Atwater and his Division of Insurance Fraud, Capacity Insurance Company and the Orlando Sentinel’s reporting of the arrest. He intimated some fault for each and directly accused “government officials” of ignoring the principle of “innocent until proven guilty.”

Audacious and hypocritical. Only a few weeks ago, Merlin’s op-ed in the Palm Beach Post accused Citizens board appointee, Bette Brown, of being dishonest merely because she was a banker. No trial. No evidence. Just guilty. Now,  he accuses officials of ignoring the principle of presumed innocence without having (at least not publishing) all the facts of the arrest.

First, Merlin defends exaggerated damage estimates as nothing more than “passionate differences” and in Leverett’s case, reliance on third parties.  He suggests foul play because an umpire, accepted by both parties, was related to the company’s adjuster. No trial. No evidence. Just guilty.

Then he deflects blame to the carrier, and the industry, for underestimating the claim initially, calling into question whether “Jeff Atwater would demand an investigation into the reasons why and how the company underpaid the claim if he knew all the facts.”

I suggest you read Merlin’s two posts yourself.  Let me know if you think they appear designed to cast dispersions on carriers and away from the culprit(s). (See NOTE #1 below).

I found strategic gems of even-handedness nestled throughout the prose. Just enough to say he gave both sides of the story. “Two wrongs don’t make a right” Merlin asserts, in describing fraud by PA’s that offset alleged low estimates by the insurer. He provides numerous links–to case law, the Umpire Code of Ethics, and more.  But  suspicions are raised when the only inoperable link is the one to damage photo’s he alleges are helpful to the defendants case.

And so, the intent is clear and two fold.  One; to obfuscate the fraud of yet another public adjuster by alleging that insurers who allege fraud are, well… committing fraud themselves. And two; to foster, even promote, a lenient atmosphere for claim inflation similar to that alleged to have been committed by Robert Eugene Leverett II.  If you don’t believe me, check out Merlin’s followup titled “Why Does the Insurance Industry Consider its Customers Crooks?”

Merlin casts dispersions on probable cause for this arrest, apparently without having or at least revealing all available facts.

I contacted The Division of Insurance Fraud, Capacity Insurance Company, The Department of Financial Services, the Orlando State  Attorney’s Office and numerous confidential sources.

Whether intentional or not, some of the more telling omissions from Merlin’s account are:

  • The sworn statement of a forensic engineer concluded that damage to roof trusses was not structural as was alleged but the result of long term moisture from a prior roof leak present many years before the fire.
  • Roof truss damage, allegedly from extreme heat or lapping flames, was further discredited by the discovery of a stack of unused shingles immediately above the room where the fire started and adjacent to the trusses.  A plastic wrapping for the shingles was entirely undamaged and showed no signs of melting.  It was photographed, placed in an air-tight container and taken into evidentiary custody.
  • The large discrepancy in number of damaged rooms asserted by Leverett and used to increase property damage and loss of use estimates was refuted when a private detective, observed the “unusable” rooms being serviced by hotel staff well after the fire.
  • Some of the allegedly “unusable” rooms were confirmed to have been occupied by guests of the motel, again after the fire and before any restoration had begun.
  • In his examination under oath, one motel owner reported damage to only fourteen rooms (not to 64 as was alleged) and stated that some of that damage was due to pre-existing mold. He later recanted.  The building only has 56 rooms.

There’s more but you get the point.  Merlin’s insinuations of impropriety are baseless as is any hint this wasn’t a solid investigation and justifiable arrest.

He’s correct about one thing though. Leverett should be presumed innocent until a court of law and the facts prove otherwise.

Too bad that those Merlin accuses aren’t afforded the same right.


NOTE #1:  The posts referenced above by Chip Merlin are:

Public Adjuster Arrested For Intentionally Inflated Fire Claim Denies Allegations

Public Adjuster Arrest, Umpire Ethics, and Good Faith Opinions–An Intriguing Story

Why Does the Insurance Industry Consider its Customers Crooks?

Fifty Percent Chance Insurer Will Fight Its Policyholder – Why?


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