Pair Ordered to Repay RTD $228,000 for Injury Scam

A Los Angeles man and his girlfriend each were ordered Thursday to repay $114,000 to the Southern California Rapid Transit District after they admitted operating a phony injury claims scheme.

The pair admitted to bilking the RTD out of $205,000. With the cost of the investigation added, the loss for the RTD amounts to $228,000, Deputy Dist. Atty. Bill Seki said.

Michael Flot, 30, and Janice Curry, 29, of Glendale pleaded guilty Thursday to a charge of grand theft. In addition to ordering restitution, Pasadena Superior Court Judge Gilbert Alston ordered each to serve five years probation, pay $5,000 in fines and complete 250 hours of community service.

A third defendant, Bambi Parker, 25, of Los Angeles, pleaded guilty in March to conspiracy to defraud and solicitation of others to commit a crime. She was given five years probation and ordered to repay $18,000 to the RTD.

The seven-month scam began in November, 1988--less than a year after the RTD switched insurance contractors and increased its administrative monitoring in the wake of an investigation that revealed hundreds of thousands of dollars in phony insurance claims against the transit agency.

Prosecutors contended that the latest insurance fraud was conducted out of the HCM Corp., a Glendale firm and subsidiary of the Hertz Corp. hired by the RTD to process injury claims.

Seki contended that Flot and Parker promised money to about 40 friends and relatives if they would sign claim forms for injuries received in RTD bus accidents. They then helped the acquaintances collect their claims, typically in amounts of $5,000 each.

The participants, many of whom testified under immunity from prosecution in a March preliminary hearing, had not been passengers in the accidents. Some testified they were recruited as customers at Flot’s hair salon in Los Angeles.

Seki said Curry, a friend of Flot and Parker, worked as a claims examiner for HCM Corp. She moved the fraudulent claims through the system by submitting falsified payment authorization requests and medical documents to obtain settlements, the prosecutor said. The fraud was detected by a supervisor who became suspicious because the claims were being processed unusually quickly, he said.

Flot and Curry faced charges of grand theft, presentation of a false claim, conspiracy and solicitation. The lesser charges were dropped in exchange for the guilty plea, Seki said.