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Posted: August 05, 2008

Caregiver Alert: NY Nails Insurance Broker for Scamming Seniors

The state of New York is penalizing an insurance broker who targeted seniors across the state by selling overlapping home health services policies they did not need. 

The order issued by Justice Diane Y. Devlin requires insurance broker Thomas Piccirillo of Auburn, New York, to pay $500,000 in restitution to seniors he defrauded, $100,000 in penalties, plus an additional $10,000 penalty to the state for targeting senior citizens.


Piccirillo also is barred from selling any home-care policies unless he posts a $500,000 bond.


"This individual illegally took advantage of New York's most vulnerable residents to increase his commissions," said Attorney General Andrew M. Cuomo. "He used the appeal of seniors maintaining their independence in order to gain their trust, which he then broke by selling unnecessary home care policies."


Piccirillo used the seniors’ fear of being sent to a nursing home as a tactic to sell elderly clients overlapping home health services policies, including policies from a company that has since been banned from doing business in New York state, according to Cuomo's office.


By selling the overlapping policies, Cuomo says Piccirillo obtained significant commissions from two service companies, both of which were unaware he was selling the other's duplicative product. The initial investigation determined that in 2006 alone, Piccirillo earned more than $117,000 in commissions from the two service companies.


Piccirillo went door-to-door selling nearly identical home health services agreements for Americare Home Care Services, Inc., and Homeward Bound Services of North America, Inc.


Homeward Bound Services' one-year Assisted Living Services Agreement allowed elderly consumers to pre-pay for blocks of non-medical services provided in their home, including meal preparation, laundry, bathing, cleaning, dressing, toileting, and shopping. The company would contract with local home care providers to complete these tasks. The consumer was required to renew the agreement each year in order to continue to receive services, and unused hours did not roll over from one year to the next. Homeward Bound paid a 37.5% commission on sales.


Americare's Service Contract allowed seniors who bought the plan and needed help at home to call Americare which, in turn, would contract with a local home care provider to provide the home care services. Like Homeward Bound Services, unused hours did not roll over from one year to the next. Americare paid a 50% commission on sales.


Piccirillo sold Americare contracts to Homeward Bound clients to collect the higher commission. In one case alone, an elderly consumer paid $40,000 for the policies and did not use a single home care hour. Piccirillo earned more than $12,000 in commissions on the sales.


In addition to selling duplicative policies, Piccirillo engaged in other acts of fraud in order to maximize commissions: 

Americare did not permit its agents to sell a new contract before the previous one had expired. In June 2007, Americare learned that Piccirillo was simultaneously selling its services and Homeward Bound Services agreements to consumers, leading both companies to terminate him.


Americare, upon learning of the attorney general's findings, provided $90,000 toward restitution for consumers who were defrauded.


Ann Marie Cook, president and chief executive of Lifespan of Greater Rochester, Inc., a not-for-profit agency that helps older adults and their caregivers take on their challenges and opportunities, said, "Lifespan commends the attorney general's office on aggressively pursuing this matter. This broker preyed on the fears of our community's elders for his own personal gains. This is a despicable scam."


In a separate matter, Cuomo's office obtained an order requiring Homeward Bound Services and its owners to pay $100,000 in restitution for failing to honor agreements. The owners also are required to pay a civil penalty of $50,000 and costs of $12,000 to the state. As part of this order, Homeward Bound is barred from selling its assisted living service agreement unless it posts a $1 million performance bond.


(Article courtesy of

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