NJ Anti-fraud agency faces questions

Anti-fraud agency faces questions

Senator turns up pressure
Posted by the Asbury Park Press on 09/21/05

TRENTON, NEW JERSEY — The head of the state Senate Judiciary Committee is turning up the pressure on the state Office of the Attorney General as he reviews an audit that showed questionable billing by an agency meant to prevent insurance fraud.

In a recent letter, Sen. John H. Adler, D-Camden, said responses to his inquiry were evasive and devoid of credible foundations.

Adler, chairman of the judiciary committee, has demanded a second round of answers about the audit, which showed questionable billing by the Office of Insurance Fraud Prosecutor. The office serves under Attorney General Peter C. Harvey.

I’m really distressed by some of their answers, Adler said in a telephone interview.

In a Sept. 13 letter, Adler asked for another set of answers by Friday. His next step, he said, will depend on the response.

We are currently . . . attempting to provide additional information to help further clarify answers to the senator’s questions, said Paul Loriquet, a spokesman for Harvey.

Adler’s questions focus on an audit released in July saying the Office of Insurance Fraud Prosecutor had charged insurance companies $1 million in “questionable” costs. Another $8 million in bills charged to insurers wasn’t properly accounted for, according to the review by the Office of the State Auditor.

The Office of Insurance Fraud Prosecutor is meant to fight fraud, which is blamed as a major factor for high auto insurance rates. Insurance companies pay for the office, but the audit showed some of the charges from the prosecutor may not have been tied to fraud cases. Unnecessary charges billed to insurers may cause higher premiums.

After the audit was published, Adler wrote to Harvey’s office with follow-up questions about how the fraud prosecutor was managed.

The auditor’s report is not as benign as you seem to suggest, Adler wrote to Thomas J. O’Reilly, an administrator for Harvey’s Department of Law and Public Safety. The report reveals significant lapses in judgment and a reckless disregard of legitimate accounting controls.

Sen. Joseph M. Kyrillos Jr., R-Monmouth, another member of the judiciary committee, praised Adler’s tone and demanded answers. He said it seems to be standard operating procedure in Harvey’s office to begin reviews but never reach conclusions.

Jonathan Tamari: jtamari@gannett.com