N.Y. Junkyard Owner Charged in Scheme to Insure Illegal Aliens

February 14, 2008

A N.Y. junkyard owner has been charged with masterminding a scheme to sell high-mileage vehicles to illegal aliens and then insure the vehicles through his own garage policy.

Officials said 61-year-old William Hrazanek of Fleischmanns, N.Y. provided insurance as well as registrations for the vehicles, which in some cases were purchased elsewhere and brought to him. The undocumented immigrants who gained insurance through the scheme lived mostly in Delaware and Ulster counties.

Under Empire State law, only U.S. citizens or legal residents may
apply for driver’s licenses and applicants must have valid Social Security cards. Investigators said none of the individuals had Social Security cards.

According to investigators, Howard improperly added the cars as “garage vehicles” to an insurance policy written under the name of Hrazanek’s business, Rabbit City salvage yard. A “garage vehicle” policy is intended to provide insurance for vehicles used by employees in or near a business, such as a car lot.

Hrazanek allegedly charged buyers $1,800 a year per vehicle for the fraudulent insurance and registrations. Hrazanek paid $30 to add the vehicles under his Rabbit City umbrella policy. Investigators estimated about 40 vehicles were fraudulently insured and registered. The cars were later traced to locations such as Buffalo and New York City. One of the vehicles was being used as a cab.

Hrazanek may have collected as much as $30,000 a year from the fraudulent insurance and registration sales.

The alleged scam occurred during a four-year period. Hrazanek’s insurance company, American Transit Insurance, calculated their premium loss for 40 vehicles over that span of time at $522,823.

Hrazanek faces up to 15 years in prison if convicted of insurance fraud.

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