Attorney General Cuomo Sues Insurance Broker Who Targeted Senior Citizens With Unnecessary Home Health Service Policies

BUFFALO, N.Y. (June 2, 2008) - Attorney General Andrew M. Cuomo today announced his office filed suit against an Auburn insurance broker who targeted seniors across the state by selling overlapping home health services policies they did not need.

Thomas Piccirillo, a licensed insurance broker, used the fear of being sent to a nursing home as a tactic to sell elderly clients overlapping home health services policies. By doing so, Piccirillo obtained significant commissions from two service companies, both of which were unaware he was selling the other’s duplicative product. The Attorney General’s initial investigation determined that in 2006 alone, Piccirillo earned over $117,000 in commissions from the two service companies.

Attorney General Cuomo’s lawsuit seeks restitution for all the seniors he defrauded and to prohibit him from selling any home care policies unless he posts a $500,000 bond. The suit also seeks a $10,000 penalty against Piccirillo for defrauding senior citizens.

“This individual duped his elderly customers into buying overlapping coverage as a way to score increased commissions,” said Attorney General Cuomo. “These services are supposed to give us peace-of-mind that our loved ones are being cared for while staying independent. However, this broker preyed upon elderly fears of being institutionalized as a way to sell home care policies they did not understand, did not need, and did not use. This lawsuit seeks to hold him accountable for his misdeeds and provide relief to the families he duped.”

Piccirillo, of Genesee St. in Auburn, went door-to-door selling nearly identical home health services agreements for Homeward Bound Services of North America, Inc. and Americare Home Care Services, 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. However, unused hours did not roll over from one year to the next. Homeward Bound paid 37.5 percent commission on sales.
  • Americare’s Service Contract allowed seniors who purchased 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 50 percent 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:

  • Instead of renewing agreements for existing customers, he sold new agreements in order to get higher commissions. However, new agreements were subject to a 6 to 12-month waiting period before services are provided.
  • Piccirillo defrauded his customers by adding hours of service to contracts without their consent or knowledge and never providing written proposals to customers disclosing the total hours purchased at time of sale.
  • In one case, Piccirillo sold an elderly woman three Homeward Bound Agreements and three Americare Contracts from August 2005 to January 2007. Piccirillo added hours to the original agreements by persuading the woman to sign new contracts even though he knew that she had not used the original hours and he did not observe any change in her health status. In total, the consumer paid $19,056 for services and never used one hour while Piccirillo made $7,247 in commissions. Had Piccirillo simply renewed her existing policy, the consumer would have paid only $3,500 in premiums and Piccirillo would have earned commissions of less than $1,000.

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 immediately terminate him.

Consumers who believe they were defrauded by Piccirillo are urged to contact the Attorney General’s Buffalo Office at 716-853-8404.

In a separate matter, Attorney General Cuomo’s Office obtained a court order earlier this year 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 their Assisted Living Service Agreement unless it posts a $1 million performance bond.

The cases are being handled by Assistant Attorney General James Morrissey of the Buffalo Regional Office under the supervision of the Assistant Attorney General-In-Charge Russell Ippolito.

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