County workers, teachers, Hidalgo cop among 32 arrested in insurance fraud case

McALLEN — An Hidalgo police officer, a former Hidalgo County jail worker, other county employees and schoolteachers are among 32 people indicted on federal insurance fraud charges. 

Dubbed “Operation Sitting Duck,” the FBI-led investigation resulted in seven indictments alleging a scheme that defrauded AFLAC of more than $3 million.

Details of the alleged insurance fraud scheme were made public in indictments unsealed Thursday in U.S. District Court in McAllen.

Prosecutors say the group worked with two unnamed doctors at a family clinic in Reynosa. The doctors would sign off on the fake accident reports — a separate document required to file a claim — and receive about $10 to $15 for each supposed injury.

Prosecutors said the defendants allegedly recruited each other to buy policies and join the purported scheme. In all, the scheme entailed about 21,600 purportedly fake claims accompanied by doctors' accident reports to the Columbus, Ga.-based insurance company. 

The purported scheme lasted between September 2001 and August 2010, court documents state.  

“Simply put, this fraud scheme is a robbery without a gun of the self-insured American taxpayer,” said Cory B. Nelson, the FBI special agent in charge in San Antonio. “The FBI considers it to be a direct threat to the critical U.S. health care infrastructure designed to be available for Americans in their time of medical need.”

Unlike primary medical insurance, the AFLAC accident-only insurance plan is a supplemental policy intended to help cover costs after an unexpected injury, such as rent, car payments and utility bills that could accumulate when the injured person is unable to work. 

“The indictments stemming from the alleged fraud ring in Texas followed lengthy investigations and cooperation with law enforcement to maximize results,” said Jon Sullivan, AFLAC manager of corporate communications. “We would like to thank the FBI and U.S. Attorney's Office for their diligence in protecting the best interests of our policy holders.” 

Hidalgo police Officer Steven Betancourt was released on an unsecured bond alongside nine other defendants Friday morning following a detention hearing in federal court.  

Betancourt allegedly filed five false claims, saying he requested insurance money after cutting his chin after he tripped on a sidewalk, hurt his leg while feeding a dog, burned himself with hot water and burned his arm while burning trash and dropped a hammer on his toe between July 2006 and May 2009. 

Hidalgo Police Chief Vernon Rosser said he suspended Betancourt without pay following his arrest Thursday afternoon. 

"You could have pushed me over with a feather when they said they had an indictment for him," Rosser said. 

Also indicted was Homer Cedillo, 41, who worked at the Hidalgo County Jail to pursue solutions to inmate overcrowding. Sheriff Lupe Treviño said he accepted Cedillo's resignation after learning of the investigation.

“He’s a good guy — he really is — but he got caught up with this (scheme) and that was that,” Treviño said. “If I was called to testify about his character, I'd say he was a good guy, he just messed up.” 

The sheriff added he sent a bus and 10 deputies alongside FBI agents Thurssday to assist in rounding up the suspects.

Cedillo allegedly filed a fake claim in June 2007, saying he hurt himself after slipping on wet cement. 

A U.S. Attorney's Office spokesperson had no immediate information about the occupations of any of the defendants. 

Each count of conspiracy and wire fraud carries a sentence of up to 20 years in prison and a $250,000 fine. Anyone who may be convicted will have to pay back the fraudulently obtained cash, prosecutors said. 

U.S. Magistrate Judge Peter Ormsby ordered Betancourt turn in his service weapon to the police department while his case remains pending. 

Because none of the 10 defendants at Friday's detention hearing in federal court had prior criminal records, Ormsby gave each person a $20,000 unsecured bond, allowing them to remain free as long as they appear at all scheduled court hearings. 

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Jared Taylor covers courts and general assignments for The Monitor. You can reach him at (956) 683-4439. 

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Recognize anyone on the list below? E-mail reporter Jared Taylor at jtaylor@themonitor.com or leave a comment below. 

•  OPERATION SITTING DUCK

Named in seven indictments unsealed in U.S. District Court in McAllen are: 

Lucila Alcala, 40, of Edinburg

Lilly Perez, 32, of La Villa

Desiree Rodriguez, 34, of Edinburg

Jose D. Rodriguez, 27, of Edinburg

Steven Betancourt, 39, of Edinburg. Betancourt works as an Hidalgo police officer and has been suspended without pay. 

Leonor B. Salinas, 46, of Elsa

Maria Guzman, 40, of Edinburg

Rebecca Castillo, 41, of Edinburg

Ninfa Reyes, 38, of Edcouch 

Noemi Villareal, 60, of Edinburg

Idaleen Sanchez, 34, of Edinburg

Norma Sanchez, 41, of Edinburg

Valerio Ramos, 55, of Edinburg

Jose Guerra, Jr., 37, of La Joya

Eddie Guerra, 34, of Alamo

Homer Cedillo, Jr., 41, of Edinburg, who resigned from the Hidalgo County Sheriff's Office after Sheriff Lupe Treviño said FBI agents informed him of the investigation. Cedillo had been hired to try and find solutions to overcrowding in the jail. 

Mary Cedillo, 65, of Edinburg, mother of Homer Cedillo

Martha Ortega, 57, of McAllen

Yolanda Segovia, 55, of McAllen 

Candida Chavez, 34, of McAllen 

Lori Chavez, 30, of McAllen

Anissa Chavez, 31, of McAllen

Norma Flores, 54, of Palmview

Nora Palacios, 53, of La Joya

Georgina Flores, 33, of Mission

Nancy Rodriguez, 31, of Pharr

Maria Cantu, 56, of McAllen

Beatriz Carreon, 42, of Edinburg

Minerva Murguia, 43, of Sullivan City