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16 nabbed in phony accident insurance scam

New York State Attorney General Eric Schneiderman

New York State Attorney General's Office

Sixteen people were arrested Thursday in connection with a large-scale conspiracy scheme to defraud insurance companies.  

The defendants, 12 of whom are from Brooklyn, are accused of staging six car accidents in Brooklyn and Staten Island and submitting insurance claims totaling more than $330,000.

The defendants face multiple felony counts of insurance fraud, grand larceny and falsifying business records. They also face misdemeanor conspiracy to commit these alleged crimes.

Between October 2009 and June 2011, the defendants staged accidents in which they intentionally crashed into city buses, livery cabs and other vehicles, according to the indictment.

“This all-too-common staged accident scheme puts innocent lives in danger so perpetrators can rip off the system to make a quick buck,” New York state Attorney General Eric T. Schneiderman said. One of the accidents happened in Staten Island, with the remaining five taking place in Brooklyn.  

In the most recent incident, five defendants boarded a New York City bus driven by an unsuspecting driver. Once the defendants were all on the bus, a rented U-Haul crashed into the bus at Ashford Street and New Lots Avenue in Brooklyn. The defendants on the bus then pretended to be injured in the crash, according to the complaint.

“The detection and deterrence of fraudulent claims has been and remains a significant priority at the MTA,” said Thomas F. Prendergast, MTA New York City Transit president.

In New York, a person injured in a motor vehicle accident is automatically covered by the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the No-Fault law. No-Fault insurance carriers are required to provide reimbursement for a wide range of medical and health services for injuries related to car accidents, up to $50,000 per person.

To facilitate their scheme, the defendants allegedly agreed to participate in the accidents in exchange for money up front and the promise of money from a settlement in a bodily-injury lawsuit after they were treated at a Brooklyn medical clinic.

These defendants filled out insurance forms that included false information about the accident and the defendants’ purported injuries – including claims of back, head, shoulder and knee pain. The clinics where these defendants were treated then requested, and often received, reimbursement from insurance carriers.

New York City Police Commissioner Raymond W. Kelly said, “More than a dozen subjects in this investigation thought that by staging accidents ... they could get rich quick. Instead they’re being hauled themselves into court for insurance fraud.”

The defendants accused of being involved in the 2011 bus crash have been charged with top level insurance fraud and grand larceny charges, among other charges, and faces a maximum of 5 to 15 years behind bars.  All defendants also face misdemeanor conspiracy to commit the alleged crimes.

“Breaking up these criminal operations means safer streets and a fairer market for consumers whose insurance premiums skyrocket as a result of this kind of fraud,” said Schneiderman.

January 24, 2013 - 3:50pm


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