Insurance Fraudsters 'Not Exactly Brain Surgeons'

June 5, 2007 — -- Medically speaking, the years 2003 to 2006 appear to have been a bad stretch for the families of Stanley Cannella and Dorothy L. Smith of New York.

According to federal prosecutors, during that three-year period the two families were reimbursed by a Manhattan insurance company for nine brain operations. Each.

Prosecutors said Cannella, 36, his wife and two sons submitted $142,268 worth of insurance claims. That's two brain surgeries apiece in three years -- and three for one unlucky Cannella.

Smith's family wanted about $131,397 back for nine brain surgeries, prosecutors claim.

A third couple, Michael Biscotti and his wife, both of Staten Island, N.Y., collected about $31,041 after submitting two brain operation post-operative reports.

Federal prosecutors in Manhattan say in court papers that all the paperwork for the 20 brain operations was falsified by a medical billing company technician who tapped into the insurance company's computers and changed the names on legitimate brain operation post-op reports. All the defendants have been charged with mail and health-care fraud.

"They weren't exactly brain surgeons, were they?" said Ilene Margolin, senior vice president of the Group Health Insurance company, which was allegedly bilked out of more than a quarter-million dollars.

"This is pretty far out," Margolin told ABC News' Law & Justice Unit. "We're always looking for fraud and abuse, [but] this is more extreme than we've seen. … Obviously they weren't very good at it."

Allan Weissman, a spokesman for the U.S. Postal Inspector's office, which was part of the investigation, agreed.

"This exemplifies not just stupidity but greed," he said. "Rather than trying to get away with it, they were trying to overdo it. It seems to be the key to getting caught sometimes."

Cannella is on the lam, according to the U.S. Attorney's office in Manhattan. The other defendants will be arraigned in federal court today.

Authorities say the technician, Charles Pritchett, 39, of Mount Vernon, N.Y., had access to insurance company records through a medical billing company where he worked in Hawthorne, N.Y. According to prosecutors' court filings, Pritchett used a computer to simply switch out the names of legitimate brain surgery patients and substitute the personal information for Cannella and Smith, 42, and their families, as well as Biscotti and his wife.