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Without victim, no fraud charges

Hernando sheriff's detectives had two key elements of a criminal investigation: They had allegations that the school district fraudulently claimed lightning had destroyed two pieces of electronic equipment. And they had the equipment.

Insurance investigators spent months examining and testing the equipment. Detectives spent weeks asking questions. The tests showed little, if any, lightning damage. More than likely, the equipment was accidentally damaged by students or district employees.

In the meantime, the district spent $22,000 to replace equipment that apparently could have been repaired for much less.

Will anyone be charged with attempted insurance fraud? No.

Detectives were told that the district apparently tried to upgrade its equipment by seeking insurance reimbursement on a bogus vandalism claim.

Will anyone be arrested for the untrue vandalism claim? No.

Detectives were told that a hugely inflated repair estimate was submitted to the insurance company by an out-of-state company that did no repairs in Florida.

Is anyone in legal jeopardy for the distorted claim? No.

In each of these instances, detectives lacked an essential element needed for a criminal prosecution: a victim.

The school district's insurance carrier wasn't interested in pursuing a criminal investigation, the detectives wrote in a lengthy report released Monday.

The Hernando school district is a member of an 11-district self-insurance consortium. The district's policy protects school property from damage caused by just about anything but wear and tear. Insurance representatives told detectives that districts often submit claims just to see if insurance will pay for replacement or repairs.

"The insurance officials advised that they do not feel that any fraud has been committed and, to date, they are not reopening any old cases," the sheriff's report said. "At this time, the insurance company has not requested any criminal charges be brought against anyone in regards to any false or fraudulent claims."

On May 5, the Times reported that the district claimed more than $66,000 in lightning damage occurred on three summer evenings in 1994. The claims show that over those three nights, lightning zapped fire alarms at 11 of the district's 15 schools, six schools lost their intercoms, and Central High School's computerized climate-control system was blown out.

The Times report followed a district audit, which showed that Hernando schools' property losses soared in three years from $31,514 to $111,798. In the 1994-95 fiscal year, Hernando's losses were 30 percent higher than the consortium's 10 other districts combined, the auditors said.

School Board Chairwoman Gail Coleman and Vice Chairman Steve Galaydick told detectives they believed the district fraudulently claimed lightning struck Springstead High School on June 2, 1995, destroying the school's computerized climate-control system and the theater's lighting system.

Expecting to be reimbursed by its insurance company, the district spent $22,000 to replace two pieces of electronic equipment.

But Hernando sheriff's detectives learned that the theater lighting system worked fine on June 3, when a Spring Hill musician was rehearsing for an evening performance.

The lights stopped working only after several students took them down to replace the lenses, musician Brad Stevenson told detectives.

Stevenson, who learned of the lightning claim from the Times report, called the Sheriff's Office. Stevenson told detectives he hired his own electrician to fix the lights for his evening performance.

"Stevenson feels that the lighting board was damaged by the students and not lightning, as reported in the paper," the detectives wrote.

A Spring Hill resident attending Stevenson's rehearsal told detectives she had taken photographs during the rehearsal that showed the lights worked fine.

If lightning damaged them at all, the damage amounted to no more than a few hundred dollars, according to insurance investigators.

The school's computerized climate-control system had been on the fritz since the autumn of 1994, detectives were told.

Both pieces of equipment were seized by the Sheriff's Office and sent by the district's insurer to be examined.

The tests showed damage from vandalism and a small amount of damage that could have been caused by lightning.

The cost of repairing possible lightning damage was no more than several hundred dollars, insurance officials said.

Keith Straw, the adjuster for the district's insurance administrator, Gallagher Bassett Services, told detectives the district claimed one air-conditioning system had holes punched in it by vandals using ice picks. The district sought $69,000 from the insurance company.

"It is our strong opinion that neither one of these units have been vandalized, but rather that any damage or missing parts was the result of normal wear and tear and the cannibalization of the parts by people who maintain them," Straw said.

Straw also told detectives he believed the district tried to use an insurance claim to upgrade the computerized climate-control system at Powell Middle School.

Instead of replacing the system with the $44,100 model the district sought, the insurance company authorized $11,550 for repairs.

"They were trying to upgrade it (is) what we think," Straw said.

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