Public Adjusters—a family affair!

In 2015 I reported on the arrest of Jorge Fausto Espinosa Sr., arguably one of the most criminal public adjusters in Florida history.  Now I’m happy to share recent reports of his 20-year sentencing.

Unfortunately, these reports only scratch the surface of the decades of havoc this scumbag wrought.

His was a family affair.  Shortly after leaving the Miami Dade police force for shooting an unarmed teenager in the back, his son, Jorge Espinosa (often called Jr.), also became a public adjuster and was also arrested. He’s known for masterminding the infamous “Case of the Yellow Hammer.”  He carried a firearm in his waist band.  Often, he would lift his shirt so anyone reluctant to go along with his scams could see he carried a firearm. He, too, was a scum bag—one who received probation instead of 20 years.

According to arrest affidavits, Fausto Espinosa (Sr.) was not only in cahoots with his son but, with his 35-year old wife.  She was a public adjuster too and was arrested along with Fausto and nearly 20 others, including many complicit homeowners looking to get rich quick.   (See Note #1 below)

The Espinosa family, especially its’ patriarch, had a throng of cohorts as employee’s or subs. They got a piece of the insurance pie for referring potential clients and for assisting the Espinosa’s in setting fires and creating water damage.

Fausto lived like a millionaire. Fancy cars.  Expensive clothes.  A trophy wife who drove a Hummer with a large dragon decal on the back.

The Dapper Don of PA’s, his wife Carolina, his son and those indicted were merely the summit of a multi-million-dollar criminal hierarchy police, arson and fraud investigators later dubbed “Operation Flames and Flood”.

Like numerous Florida PA scams insurers in the “Flames and Flood” cases took it heavy. So, too, did Florida’s six million home and condo owners and renters.  The net losses just from Flames and Flood “II” totaled over $7 million from 25 separately staged events. There was also “Flames and Flood I” which racked up millions more. Keep in mind, dozens of prosecutable events likely mean there are hundreds of other similar crimes, just as bad or worse, that never lead to an arrest.  It also means there are other fraudsters out there–equally diabolical.

Fausto’s average claim filed against Citizens, was $189,702 for 12 claims totaling $2,276,431.37, including two water losses.  State Farm had the highest single payout of $975,777. Tower-Hill had more payouts than any other private carrier with three.

And, due in part to the unique claims knowledge of public adjusters, and testament to the widespread nature of Florida’s problem, both the floods and every one of the flames, were never conclusively declared by investigators to have been fraudulently staged.   Not one!

In fact, had it not been for an informant facing unrelated federal charges this massive fraud ring would still be operating.  As I’m sure many others certainly are.

And, the enterprise reached well beyond Dade County.  Fausto employed what investigators call “feeders” and what the industry knows as “fire chasers”. Strewn about south Florida including southwest Florida–Sarasota, Ft. Myers and Naples—they buzz neighborhoods like no other place on earth looking for anyone willing to destroy their own home, or maybe just remodel a kitchen. They are under contract to contact first responders, like public adjusters and water extraction companies, to help them be first on the scene and to pressure imperiled homeowners to sign contingency contracts or AOB agreements.

A good fire chaser can make six figures annually, if he/she plays their cards right, and more if they know how to game a system fraught with kickbacks and fee splits–always paid in cash to avoid federal income taxes.  (Be sure to read this Craigslist ad).

Espinosa’s son (Jr.) would often pay homeowner’s up-front deposits, sometimes $15,000, if they would just agree to let him burn their home down.  According to one victim, the bribe and the firearm were usually quite convincing–as was the reminder that Jr. once shot someone multiple times, in the back.

As a public adjuster and an arsonist, Espinosa Sr. was an expert.  He reviewed coverage parts of homeowner policies.  Checked to make sure premiums were up to date.  Avoided using the same insurer.  He had a fully equipped torch kit with rigged surge protectors, gloves and telescoping propane igniters to reach through small openings.  Often, while wife Carolina waited at a nearby restaurant or bar, Fausto would snake the igniter through holes just above audio components or computer desks to “fire up” flammable debris he had previously strewn in the attic.

Sometimes, both he and his son would use recruited homeowners to assist in melting lard bricks on their stove top.   They’d soak rags in the lard and wipe it on kitchen cabinets, ceilings and floors.  Espinosa would disconnect emergency cut-off switches (or install an oven without one) and tell the homeowner to fill a skillet with grease and fried chicken. “Turn it all the way up” he’d remind them…”then, leave for work”.

And, he almost always succeeded. Neighbors lives were endangered. Fire fighters were injured and taken to the hospital.  Fausto would celebrate every conflagration. Once, in the front yard of a home engulfed in flames, he thrust his arms upward and shouted, “Wow! Look at my masterpiece!” ”  (See Note#2 below).

The Espinosa family was an extended one, with literally dozens of cohorts, including: fire chasers, plumbers, water extractors, electricians, appliance store owners, building contractors, auto stereo installers, used car salesmen, PA apprentices, homeowners.  And yes…attorneys!

I believe there’s ample evidence to conclude some plaintiff firms may have been involved beyond just giving legal advice. From the probable cause documents it appears some might have not only encouraged/ignored the filing of fraudulent claims but, I’m sad to say, assisted the criminals in committing the crime. There were references to a lawyer encouraging false testimony during Examinations Under Oath (EUO) or assisting the Espinosa’s in shopping for stoves that could be used to replace those with safety cut-off valves.  According to the informant, one lawyer arrived at the scene of an arson to prevent the homeowner from signing on with other public adjusters that had arrived at the Espinosa’s arson scene presumably summoned by a fire chaser.

It’s all so reprehensible, isn’t it?

Moreover, it’s the prime reason Florida premiums are twice that of the national average and why I say Florida’s property market is the most corrupt insurance system in America.


NOTE #1: Other defendants were: Alain Jose Murga, 43; Dario Martinez, 42; Argelio Menendez, 55; Damien Gonzalez, 39; Francisco Pineiro-Gonzalez, 38; Carolina Espinosa, 35; Jesus Gonzalez, Perez, 64; Daniel Perez, 43; Jesus Martinez ,51; Lazaro Rivera, 45; Anay Vina, 35; Abel Gutierrez, 43; Ernesto O’Reilly, 38; Felix Anthony Cabrera, 28; Pedro H. Lezcano, 68; Lazaro Delgado, 48; Liset Corrales, 37; Francisco Centurion, 71; Roberto Suarez, 46; Javier Lopez Rivero, 49, and; Daney Perez, 47.

NOTE #2: quotes are provided twice in this blog.  The first instance regards orders for homeowners to turn their stoves up and leave for work.  That statement is assumed to have been made based on comments taken directly from the confidential informant. The second quote  “Wow! Look at my masterpiece!” appears in the arrest affidavit, the words of the confidential informant reporting what he personally heard Espinosa say, (see Incident #8, p.13, here).  The gesticulations described were added to provide reader interest.

NOTE #3: Documents available via my online library regarding Operation Flames & Flood and public adjuster fraud can be found under the library tab either as Assignment of Benefits or Miscellaneous Documents (Public Adjusters).  The following specifically relate to both Flames & Flood I and II.

Operation Flames & Flood Claims Summary

Operation Flames & Flood II, Miami Herald

AOB Fraud & Public Adjusters  

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