Re: Mold Fraud
Posted by FYI on 3/12/10
October 9, 2002
All Seven Found Guilty in Water/Mold Scheme
Seven people who were arrested in the Houston-area in connection with the state's
largest known scheme to defraud insurance companies by intentionally flooding homes
and filing bogus claims pleaded guilty or have been convicted on fraud charges.
The scheme cost insurers - and, through higher rates, their policyholders - more than
Ramnath Ramcharan, 39, of Bay City, was found guilty Wednesday on one count of
conspiracy, four counts of mail fraud and ten counts of money laundering. Ramcharan
was the only defendant to seek a jury trial. Sentencing for Ramcharan and six
defendants who had already pleaded guilty has been set for December 12 in U.S.
District Judge Sim Lake's courtroom.
The six defendants who plead guilty to various charges of insurance fraud are Johnny
Duane Staples, 54, of Baytown; Janell Staples, 60, of Baytown; Billy Bob Staples, 50,
of Conroe; Teresa Ann Staples, 45, of Bay City; Don Edward Mitchell, 58, of Tomball;
and Daniel E. Terry, 45, of Broussard, La. The defendants face up to 20 years in
prison and substantial fines.
The seven were arrested on June 27 by investigators with the Texas Department of
Insurance (TDI), the Federal Bureau of Investigation and the U.S. Postal Inspection
Service following the return of indictments by a federal grand jury.
"A very thorough investigation by our Fraud unit and assistance from the U.S.
Attorney's Office succeeded in quickly bringing these suspects to justice," said
Commissioner Jose Montemayor. "We continue to work with the U.S. Attorney's Office in
other areas to put a stop to these blatant acts of fraud."
The defendants purchased and insured several two-story homes. Pretending to be away
for the weekend, the defendants intentionally flooded the homes with water hoses or
by damaging water pipes. The water lines would be repaired before an adjuster
arrived. The defendants would file claims to obtain the full policy limits of the
insurance coverage for their damaged personal property along with additional living
expenses. Some homes were flooded more than once. At least one house was "cooked" to
encourage the development of mold. Insurance companies paid claims in excess of $5
The defendants served as homeowners, independent sub-contractors, vendors and service
providers in filing claims, repairing the damage and selling the homes to each other
to repeat the process. Homes in the greater Houston area, Bay City and Austin were
used in the insurance fraud scheme.
Texas Department of Insurance
On 3/03/10, Sharon wrote:
> "In the early years there were individuals that would cook houses to
> rapidy develop mold conditions by soaking carpets, sealing doors, and
> walls. The litigation at that time was mold was gold. Fraud was being
> I have NEVER seen documentation of a single lawsuit in which the above was proven
> to have occurred. I think the above is urban legend that was mass marketed to make
> the "innocent" insurance industry appear to be the victims of greedy, unscrupulous
> people. Is there documentation somewhere of a legal proceeding in which the above
> was proven to have occurred?
> On 3/02/10, Deborah wrote:
>> So if the owner fails to disclose known damages to a prospective renter who has
>> informed owner of pre-existing health conditions, some one has breached contract.
>> If damage occurs whilst the tenant is occupying it and the landlord refuses to
>> properly repair or remediate, the tenant can either pay out of pocket for repair
>> and seek reimbursement, perhaps having to litigate over it, or move out.
>> If the tenant is ill but unaware of defects in the premise causing the illness
>> their responsibility to inform the owner cannot be triggered. Only at the point of
>> knowledge of the defect does that begin.
>> Why are you now deviating into proscriptive periods and statutes of limitation?
>> On 3/02/10, johncodie wrote:
>>> Maintaing a property is the responsibility of the owner as is the failure to
>>> maintain or failure to inform of defects. The standard is higher if the
>>> property is put up for lease than if the owner uses it themselves; when it
>>> is put up for residential lease, there is an unspoken and implied warranty
>>> of habitability.
>>> There are two standards; and under the present laws the renter and the
>>> landlord are by law to establish a standard of occupancy that both are willing
>>> to abide. The renter has full right to inspection prior to occupancy, and
>>> testing as required. The renter has the right to make notice of deficiencies
>>> and amend deficienceis to accomodate. The renter is not forced to confinment
>>> as is a prisoner. The landlord is not forced to bring accomodations up to a
>>> renters standards of health. The law is clear that the dwelling does not have
>>> to be preceived as perfect; not is the minimum occupancy requirements
>>> limited. The key here is the two individuals are governed by a peer review.
>>> This makes litigation after a period of five years, or a single year for mold
>>> illness very difficult to win.
>>> The premis is mold is not gold, to harbor and keep safe, it is to abandon. A
>>> person that claims to have been gravely unknowingly affected to be able to
>>> explain why their alergic response upon first occupancy was not triggered.
>>> Don't expect a landlord to be a monitor of your health. You acquire the right
>>> to privacy even when ill. Once occupied you have assumed the partnership, of
>>> notification. "The Landlord is not forced to bring accomodations up to a
>>> renters standards of health once given the opportunity for inspection.
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