ALBANY, NY,— Staged vehicle collisions are fueling New York State’s no-fault auto insurance fraud problems dramatically and is a target for action by the New York Alliance Against Insurance Fraud.
The scams involve unscrupulous individuals staging vehicle accidents and then submitting bogus injury claims to insurers for payments. Such crimes require a team of crooks, well organized and networked with medical providers. It is no surprise that organized criminal enterprises operate the scams and often have an ownership relationship with the medical mills. The mobsters operate mostly in the New York City area.
The plot is simple: accident is staged ( six riders in a van come in front of an older driver in an expensive car, stop short and bingo –that’s one method) and then corrupt medical clinics submit fraudulent claims for treatments that were either not performed or not necessary. Crooked medical providers earned an estimated $628,000 per day in 2009. Per day! Unfortunately, the price for these crimes is paid through higher insurance rates, says NYAAIF. No-fault fraud and abuse cost New York consumers approximately $229 million in 2009, according to the Insurance Information Institute, resulting in a “no-fault fraud tax” of $1,561, or 22 percent of every no-fault claim. Crackdowns need to start with laws to lock up “runners”. This street-level collision coordinator recruits passengers promising financial rewards for their participation. These skilled criminals keep to the script and provide corroborating details of the collision and injuries. The staged accident then takes place with an innocent driver targeted for the collision. In some instances, bogus witnesses are positioned near the caused collision to support the criminals’ account and contradict the innocent driver’s testimony. The runner refers “cooperating” passengers to an unethical attorney for legal representation. In turn, the attorney directs these passengers to an unscrupulous medical provider who inflates medical billing for often nonexistent injuries. These individuals will often claim hard-to-dispute soft-tissue injuries in order to collect on insurance claims. The attorney negotiates a settlement with the insurer for the cooperating passengers, and the others involved in the scam share in the claim payment. The professional (such as the lawyer or medical provider) usually reaps the largest payout from the fraudulent claims. The insurance industry supports legislation which would make it a felony to pay or accept money to stage accidents or steer accident victims to medical providers engaged in fraud. To avoid becoming the victim of a staged accident or should you suspect one, NYAAIF offers the following tips: • Maintain enough distance from the vehicle in front of you to allow ample braking time if it stops suddenly (a favorite tactic of staged collision criminals). Don’t tailgate! • Call the police to the scene of an accident and ask the responding officer to file a police report. • Keep a disposable camera in your glove box or use a cell phone or PDA device to photograph damages and passengers of the other car.
