May 31, 2005
New Jersey’s award-winning office created to root out insurance fraud is under scrutiny itself, with the state auditor probing allegations the insurance industry was billed about $4 million for employees who never worked on fraud cases.
The probe stems from a letter to a ranking state senator by a retired investigator from the state Division of Criminal Justice who said 43 employees had their salaries paid with insurance industry money but did little or no work on fraud cases.
“We investigate doctors for submitting false bills to insurance companies, and we put doctors in jail for that. What’s the difference here?” Edward Buttimore, the retired investigator, told The Star-Ledger of Newark.
Criminal Justice Director Vaughn McKoy, whose agency oversees the New Jersey Office of Insurance Fraud Prosecutor, denied the office misspent money.
He said Buttimore had filed a notice this week that he may pursue legal action against the division, alleging he was mistreated and discriminated and retaliated against. Such a notice is generally a preliminary step to filing a lawsuit.
Buttimore said his letter earlier this month to Senate Judiciary Committee Chairman John Adler had nothing to do with the notice of a possible lawsuit.
State Auditor Richard Fair began investigating the insurance fraud prosecutor’s office in January at the behest of McKoy and the state attorney general after an anonymous letter that made claims similar to Buttimore’s was sent last fall to various government offices. Adler requested the auditor’s intervention after receiving Buttimore’s letter.
In his letter to Adler, Buttimore included the names of the 43 employees, a list he said he compiled by cross-checking a criminal justice division roster with a list of names submitted to the insurance industry as working on fraud cases.