Coral Gables Insurance Fraud Lawyers: An Empathetic Look at a Complex Issue

Prominent Coral Gables Fraud Cases

In 2020, state-owned insurance company Citizens Property Insurance Corp. sued Coral Gables law firm The Strems Law Firm, P.A. and several associated companies for racketeering and insurance fraud. Citizens claimed Strems and his firm filed over 8,700 lawsuits against property insurers over a six-year period, averaging nearly 1,500 suits per year. The tactics allegedly used included inflating damage estimates, using shell companies to carry out unnecessary repairs, and exploiting the litigation process to pressure insurers into settling questionable claims. After a lengthy court battle, Citizens settled with Strems in 2022 for $1 million.

In a separate case, the Florida Bar detailed extensive allegations of fraud and unethical conduct against Coral Gables attorney Scot Strems. The Florida Supreme Court suspended Strems’ law license in 2020 for heading a “vast campaign of unprofessional, unethical, and fraudulent conduct.”

And just this July, the Florida Supreme Court suspended another Coral Gables lawyer, Leo Benitez, for a year after a judge ruled he engaged in “fraud upon the court” in a former client’s lawsuit.

These high-profile cases put a spotlight on insurance fraud issues in the Coral Gables area. But why does this kind of fraud happen, and what are the impacts?

Contributing Factors to Insurance Fraud

Insurance fraud appears to be a growing problem in places like Coral Gables and South Florida for a few likely reasons:

• Profit Motive – With high premiums and frequent claims, there are financial incentives for unscrupulous actors to exploit the system. Greed can override ethics for some lawyers and contractors.
• Litigation Culture – South Florida is known nationally for its litigious culture. The prevalence of lawsuits creates more opportunities to take advantage.
• Lax Oversight – Regulators have struggled to keep up with the volume of claims and lawsuits. Weak oversight makes it easier for fraud to slip through cracks.
• Organized Schemes – Sophisticated networks, like those allegedly involving Strems and his associates, show how systemic fraud does real damage.

While the profit motive likely drives most fraud, it’s rarely just about money. Understaffed insurers and overworked adjusters create vulnerabilities in the claims process. Gaps in regulation and enforcement also play a role. Still, the responsibility ultimately lies with those who make unethical choices.

Impacts on Policyholders and the Insurance Market

The harm caused by insurance fraud is very real and spreads broadly:

• Higher Premiums – Fraudulent claims and litigation increase losses for insurers, driving up premiums for policyholders. This makes insurance less affordable, especially in high-risk areas.
• Restricted Coverage – Some insurers respond to excessive claims and lawsuits by limiting high-risk exposures. This reduces options for consumers.
• Market Instability – Widespread fraud and losses can threaten insurer solvency. Market disruptions and insolvencies make the system more volatile for everyone.

Law-abiding citizens inevitably pay the price for insurance fraud through higher rates and fewer choices. Honest contractors also face growing scrutiny and oversight burdens due to the abuses by dishonest competitors. Fighting fraud is thus in nearly everyone’s interest.

An Ethical Crisis as Well as a Financial One

Beyond the financial impacts, insurance fraud also represents an ethical crisis. Lawyers and contractors occupy positions of trust, holding the well-being of clients and communities in their hands. Violating that trust for personal gain goes against the core values of those professions.

Restoring that trust will require accountability and consequences for those who cross ethical lines. But it also requires better governance, oversight, and fraud prevention from insurers and regulators.

No single solution will turn the tide. Yet through sustained collaboration and a shared commitment to ethical conduct, we can work to reduce fraud in ways that are both compassionate and effective. It begins with an understanding of how complex social and economic forces shape individual choices down the slippery slope. Approaching this issue with empathy, while also demanding higher standards, gives us the best chance at reversing the rising human and financial costs of insurance fraud.