N.Y. Fraud in the Fast Lane

June 17, 2004

Staged vehicle collisions are an increasingly popular and deadly part of New York State’s fraud problem.

Through various scams, insurance cheats stage vehicle accidents and then submit bogus claims to insurers for payment. These crimes are oftentimes committed by large-scale organized criminal enterprises that could include doctors, lawyers and collision repair facility operators. Unfortunately, we all pay the price for these crimes through higher insurance rates.

These collisions can also cause great injury and have deadly consequences. For example, a grandmother from Queens, N.Y., was killed in a staged accident arranged to scam insurance dollars.

While staged collisions can be set up in a number of ways, the process usually begins with a ring leader who hires a person responsible for coordinating the collision on the street. This street-level collision coordinator is commonly known as a “capper.” The capper recruits passengers promising financial rewards for their participation. Just like a theater or movie production, all participants involved in the staged accident script the details of the collision and injuries.

The staged accident then takes place with an innocent driver targeted for the collision. Bogus witnesses are positioned near the caused collision to support the criminals’ account and contradict the innocent driver’s testimony. The capper 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.

In many instances, criminals will self inflict injuries by hitting, cutting or gouging themselves. They will also 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 victims and the others in the scam share in the claim payment. The crooked professional (such as the lawyer or medical provider) usually receives the largest share of the fraudulent claims.

Favorite targets for staged collisions are fully insured drivers not accompanied by passengers who could serve as witnesses. Luxury cars are often targeted because they offer the promise of extensive insurance coverage.

The New York Alliance Against Insurance Fraud offers the following prevention 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 for a police report.
* Carry a disposable camera to photograph damages and passengers of the other car.

If you suspect insurance fraud, contact your insurer or the New York Insurance Department’s toll-free telephone hotline:(888) FRAUDNY.

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