TRENTON, N.J., March 3 – For the Office of Insurance Fraud and the car insurance industry as well, it was a good year all around.

First off, the car insurance industry received $1 million credit from the fraud division office in payment for last years embarrassing bookkeeping goof by the fraud office for allegedly using some of the money to fund projects other than insurance fraud.

The annual report of the fraud division reported that the credit was being applied as a type of refund to the industry for the bookkeeping transgressions uncovered by a state audit.

That audit showed the office had used some of the money for funding other units that were not in the fraud division, a violation but not a criminal one.

The omissions could have been considered a fraud of sorts because the money was being spent where it shouldnt have been.

The fraud unit is funded by the insurance industry and last year the industry gave the fraud division $30 million to be used in the fight against fraud.

The audits findings embarrassed the unit which, after all, is charged with exposing fraud and here it was discovered that the unit was in a way committing a fraud by spending money where it shouldnt have.

With that incident behind them, the fraud office and the industry are getting along just fine. Magdalene Padilla, president of the Insurance Council of New Jersey said the industry is confident the insurance fraud unit addressed the auditors concerns of last year and the correct steps have been taken. Padilla said the fraud division is doing an outstanding job.

According to the annual report for 2005 released by the office, the unit in 2005 recorded a 17 percent increase in insurance fraud arrests, and a three percent increase in convictions from 2004.

According to the report, Noteworthy for 2005 were criminal case restitution orders totaling an unprecedented $88.9 million. On the civil side, the office imposed $5.7 million in civil fines and civil judgments, and settlements netted $5.4 million.

Since the fraud division was formed in 1998 the office has screened over 66,000 reports of suspected insurance fraud, prosecuted and convicted 1,000 insurance fraud defendants, sent 420 of them to jail, secured $135 million in civil and criminal restitution and obtained nearly 5,000 civil fines totaling $27 million.