Alice Ross, an engaging 71-year-old grandmother, died when her Buick was rammed by a car packed with gang members allegedly staging a crash in Brooklyn to make fake injury claims against insurance companies.
Increasingly, violent crashes staged by large gangs are among the widespread swindles that state insurance fraud bureaus now confront.
Still, these fraud-fighting agencies reportedly earned nearly a third more criminal convictions from 2001 through 2002 despite often thinly stretched budgets and tougher fraud schemes, according to a new study by the Coalition Against Insurance Fraud (www.InsuranceFraud.org).
The coalition’s study of 43 fraud bureaus reveals that in 2002:
* criminal fraud convictions rose 31 percent (a record 2,535 total);
* fraud bureaus referred 14 percent more cases for prosecution (nearly 99,000 total);
* fraud investigations spiked nearly 18 percent (a record 33,000 total). Several of the most populous states – California, Florida, New York and New Jersey – account for most of the crime-fighting gains. Aggressive crackdowns against this $80-billion annual crime in those states now are yielding significant results.
Tempering the generally upbeat trend: Budgets for fraud fighting dropped or stayed flat in 14 states. In fact, nine of 10 fraud bureaus say lack of resources – staff, money and computers – is their biggest problem.
The large conviction totals thus may come at a bargain price. The agencies cost just 48 cents per state resident to chase swindlers each year – about the price of a candy bar.
Spending ranged from about 7 cents per person in Texas, Georgia and Ohio (less than a gumball) to nearly $3.50 in New Jersey (about one TV dinner).
Many insurance swindles also are larger, more complex and spreading faster. Some scams, like staged accidents, also are increasingly violent. This complicates the job for fraud bureaus even more.
Several fraud trends:
* Staged accidents. Organized gangs steal hundreds of millions a year by staging car crashes then making insurance claims for fake injuries. New York, New Jersey and Florida face major problems;
* Fake insurance. Phony group health coverage is being sold to thousands of small businesses, costing tens of millions in stolen premiums and unpaid medical bills. Fake medical malpractice and other liability coverage also are being peddled;
* Agent swindles. Scams by dishonest insurance agents are growing. Among the cons: stealing client premiums for personal use, and selling bogus coverage and fake investments;
* Bilking seniors. Insurance scams against seniors are widespread.
Dishonest agents steal their premiums and slip unneeded coverage and other expenses into their policies. Seniors also are targets of staged accidents and other swindles.
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