A New Jersey man — who acted as president of a phony dental insurance company and bilked many organizations, including the Guilderland Chamber of Commerce, out of thousands of dollars — was sentenced to four to 12 years in state prison Tuesday.

He was also sentenced to pay $1.3 million in restitution.

From 1999 to 2003, investigators say, Leonard J. Friscia, 47, was part of the largest organized-crime case ever to be prosecuted in upstate New York.

District Attorney David Soares said in a statement this week that those who rob individuals through fraudulent businesses will continue to receive lengthy prison sentences.
"This office makes no distinction between blue collar and white collar criminals," Soares said.

Friscia and two others pleaded guilty in September to scamming hundreds of clients, spanning six states. The company took customers’ premiums without paying out on claims, an investigator said in September.

Fortunately for the Guilderland chamber, however, it terminated contracts with the fake company last year, after seeing red flags, Jane Schramm, director of the Guilderland Chamber of Commerce, told The Enterprise earlier.

The fake company paid all of Guilderland’s claims, she said. Investigators explained later that the company paid some claims to keep its scam going.
"It blew my mind," Schramm said last year of hearing the company was fake. "I was flabbergasted. I couldn’t believe it. The company first appeared more than legitimate."
She concluded, "I was happy we canceled our relationship with them when we did. We were one of the lucky ones."
The Guilderland Chamber of Commerce now uses Guardian dental insurance, which is a "highly-rated, excellent program," Schramm said. "We’ve never had an issue with them."

Phony operation

Friscia’s accomplices, Josephine Giaquinto, 37, and Ivan C. Westbrook, 33, both of New Jersey, are to be sentenced later. In September, they both pleaded guilty to enterprise corruption, a crime that falls under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.

Their guilty plea was part of a bargain worked out by the Albany County District Attorney’s Office. They were charged with one count of enterprise corruption, a felony, which includes the crimes grand larceny, insurance fraud, criminal possession of stolen property, falsifying business records, offering false instruments for filing, and violation of state insurance laws.

The insurance premiums that were paid from May 1, 1999 to Aug. 1, 2003 totaled $1.33 million, Bill Andrews, an assistant district attorney for Albany County, said in September. The district attorney’s office created the Aug. 1 ending date, he said, because it realized that clients were still paying for insurance and the fraudulent company needed to be shut down.
"We made arrangements for all the victim companies to find alternative dental insurance," Andrews said.
"There are a number of dentists, a number of individuals who have paid out of pocket or have been stiffed by these people," he continued. "The first restitution we can get will be to making those out-of-pocket payments first."

According to Andrews, for two-and-a-half years, Friscia, Giaquinto, Westbrook, and probably others ran a business first called Preferred Dental and later called Advanced Benefit Solutions.

Giaquinto was the treasurer and director of customer service; Westbrook was the vice president, secretary, and director of sales and marketing; and Friscia was the president and director of business development, Andrews said.

Together, the trio coaxed individuals and businesses into signing fraudulent insurance contracts and took premium payments, Andrews said.

Among the business’s victims, Andrews said, were the Bethlehem and Latham chambers of commerce — each bilked of $50,000; the United States Federation of Small Businesses in Schenectady — bilked of $50,000; and the Capital Board of Realtors in Colonie — bilked of $3,000.
"Once a sham contract was entered between the defendants and other groups or individuals, premium payments were collected and deposited into several accounts," court documents state. "All three defendants received premium checks and wrote checks, gave orders, fielded complaints relating to the denial of insurance coverage, wrote partial payment checks to dentists, solicited business..."

Individuals were also hired to act as a complaint answering service, the document states, where the same individual would identify himself as multiple people.

Investigation

As Andrews and county investigators dug deeper into the case, they decided to involve United States postal inspectors, Andrews said.
The postal inspectors did a "mail cover," Andrews said, which "helps identify where money is going to and where information is coming and going to."
Through this mail investigation, it was discovered that the fraudulent company "had collected millions of dollars in insurance premiums from all sorts of individuals, groups, and associations," Andrews said.
"Specifically in the upstate New York area, there are 447 individual people who paid into this scam," Andrews said.
Further into the investigation, the Albany County District Attorney’s Office, then under Paul Clyne, made "staged calls," Andrews said, where investigators would call the company, pretending to be interested in buying insurance.

The investigators got the suspects on tape saying they were licensed insurers, which they weren’t, Andrews said.
The investigators also went to the "dummy storefront" Friscia, Giaquinto, and Westbrook had set up and took photographs, Andrews said.

Next, Andrews and three investigators went to the Queens County District Attorney’s racketeering division, because they do a lot of organized crime cases, he said.
This was "the first case like this in upstate New York," he added.

Later, he said, it was discovered that the Federal Bureau of Investigation in New Jersey had gotten a complaint and began its own investigation of Giaquinto, Westbrook, and Friscia.

The FBI and Albany County District Attorney’s Office then began working together, Andrews said. The trio not only were working in New York and New Jersey, but in Rhode Island, Massachusetts, Florida, and Pennsylvania, Andrews said.
The United States Attorney’s Office was prosecuting the case, he said, and it was agreed that Albany County would "portion up" parts of the case with the federal government, Andrews said. That is, Albany County would prosecute crimes committed in the eight New York counties.

Proud of Albany County’s work in these arrests, Andrews, in a September interview, credited then-District Attorney Clyne.
"We couldn’t have gone forward without his guidance in this," he said in September, the day before Clyne lost the Democratic primary for re-election to a second term to Soares, formerly an assistant district attorney. Soares then won the November election.