Suspects’ Friends Testify on Alleged Scheme to Bilk RTD

Fifteen friends and relatives of a Los Angeles hairstylist and his girlfriend testified in three days of court hearings that the two recruited them to participate in a phony injury claim scheme that allegedly bilked the Southern California Rapid Transit District out of $205,000.

In their testimony this week during a Los Angeles Municipal Court preliminary hearing, the witnesses, who were granted immunity from prosecution, testified that Michael Flot, 30, and Bambi Parker, 25, promised them money if they would sign claim forms for injuries received in RTD bus accidents and then help the pair collect on the claims.

Flot and Parker allegedly asked as many as 41 people to fill out phony claim forms.

Most witnesses, including Parker’s mother and grandmother, offered essentially the same testimony: They were approached by either Flot or Parker, who promised them money for their participation, helped them fill out claim forms for injuries suffered in bus accidents and told them they would receive a check. Prosecutors said the bus accidents were real, but the witnesses testified they had not been passengers.

According to prosecutors, most of the money received by those who filed the phony claims eventually was turned over to Flot and Parker.

Prosecutors contend that Flot, of North Hollywood, and Parker, of Los Angeles, conspired with Janice Curry, 29, of Glendale, who at the time was working at a Glendale firm hired by the RTD to process injury claims.

The seven-month scam allegedly began in November, 1988. That was less than a year after the RTD switched insurance contractors and beefed up its administrative monitoring in the wake of an investigation that revealed hundreds of thousands of dollars in phony insurance claims against the transit agency.

Curry, said by prosecutors to be a friend of Flot and Parker, was a claims examiner for the Glendale firm, HCM Corp., a subsidiary of the Hertz Corp. Curry allegedly moved the claims through the system.

Neither Flot nor Parker was employed by the RTD or HCM Corp., prosecutors said. All three were charged last year with grand theft, conspiracy to defraud, presentation of a false claim and solicitation of others to commit a crime.

If convicted, Flot and Curry could face up to eight years in prison. Parker, however, reached an agreement with prosecutors and pleaded guilty last Wednesday, to conspiracy and solicitation, according to Deputy Dist. Atty. Bill Seki. Charges of grand theft and presentation of a false claim were dropped in exchange for the guilty plea. She will be sentenced March 30 and faces up to one year in jail.

HCM Corp. reimbursed the transit agency $205,000 immediately after suspicions about the alleged fraud surfaced, a spokesman for the firm said.

Some of the 15 witnesses testified they received letters from the RTD that said their claims had been rejected. But all said they eventually received checks for $5,000 each from the transit agency. All but one said they cashed the checks, kept about $500 each and turned the remaining $4,500 over to Flot or Parker.

Some of the witnesses admitted they realized when filling out the forms that they were participating in a fraud. Others said they did not know and asked no questions because they were only interested in the money they had been promised for participating.

Sandra Dukes, under cross-examination, , testified she had asked only one question about the scheme after she had cashed the $5,000 RTD check and turned over $4,500 to Flot.

“I said, ‘Why am I only getting $500 out of a $5,000 check?’ ” she testified. “And Michael said, ‘Because everyone else has to get paid.’ ”

None of the witnesses implicated Curry in the scheme. But Seki said testimony by witnesses next week will reveal her role.

The prosecutor has contended that Curry, in her job as claims examiner, submitted payment authorization requests and other documents to obtain settlements for the people recruited by Flot and Parker.

Curry was fired in May, 1989, about the same time the alleged scam ended, court documents showed. The fraud was detected by a supervisor who became suspicious, Seki has said.

HCM Corp. replaced Leonard J. Russo Insurance Services Inc. as the RTD’s insurance contractor after Russo declined to rebid for the contract. Russo’s image with the RTD suffered in 1986, after the district attorney’s office began investigating several cases of alleged fraud.