According to documents filed in the case and statements made in court during the plea, Padron admitted that he and others would recruit individuals who owned automobiles and had certain automobile insurance to participate in staged automobile accidents. The recruiters coached the participants on how to stage the accident, what to say to the police officer at the scene, and how to claim that they have been injured. After the staged accident, a police officer was called and a police report was filed. Then, the participants filed false claims with their insurance companies, alleging that they and their family members were injured.
The staged accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants filled out paperwork falsely asserting that they suffered injuries during the staged accident. In addition, Franco Padron and the other defendants advised the participants on how to fill out the paperwork and what to say if an insurance investigator interviewed them about their injuries or treatment. Some staged accident participants received no treatment at all, or may have received only a short exam or treatment, but the paperwork completed at the clinics indicated that a full and lengthy exam and treatment had been provided. Franco Padron was identified as a recruiter of patients, and he also served as an office manager who prepared forms for submission to insurance companies, mailed those forms via registered mail, deposited reimbursement checks received from insurance companies, and cashed checks drawn on the accounts of the chiropractic clinics.
Franco Padron also admitted that he knowingly avoided triggering banks’ $10,000 Currency Transaction Reporting (“CTR”) requirement when converting the deposits of the mail fraud proceeds into cash. For example, to avoid triggering the CTR requirement, two of the co-defendants would write a series of checks, typically for $9,000 each made payable to different individuals, that would be cashed on the same day, or made payable to one individual that would be cashed on successive days.
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