Tip From Liberty Helps Bust Major Ring

By Daniel Hays

NU Online News Service, Sept. 30, 3:28 p.m.EDT?A tip from Liberty Mutual Insurance Company helpedbreak an auto injury fraud ring that cost insurers "tens ofmillions" and involved more than 150 persons, many of them violentfelons, New York City officials said.

Law enforcement action against the group was announced Sundayafter a sting operation led to the arrest of 50 persons who werelured to a location expecting a big payoff, police said.

According to an announcement by the New York Police Department,detectives snared individuals in the group by posing as insurancecompany representatives and calling them at home to say they couldcollect a claim check for up to $11,000, by visiting an office inthe borough of Queens.

Those who showed up were handcuffed and arraigned on fraudcharges.

The NYPD, which investigated the case with help from theBrooklyn District Attorney's Office, the National Insurance CrimeBureau and Boston-based Liberty Mutual, said undercover work on thecase began in August 2002 after Liberty and NICB provided them withinformation about the ring. A spokesperson for Liberty said hecould not immediately comment on the investigation.

Claims that were made by ring members, the police said,typically involved a runner who created a fictitious accident withseveral individuals faking injuries. After the runner obtained anaccident report, the "victims" would go to doctors and other healthproviders who supplied false medical information for a price thatwas used when attorneys filed claims of up to $50,000.

Top leaders of the group kept most settlement money and paidrunners $2,500 for every accident "victim" they supplied.

Robert M. Bryant, the NICB president said his organizationestimates insurance fraud costs New York State residents $200 to$300 a year more in auto insurance premiums. He said the only wayto counter sophisticated fraud operations that take advantage ofthe state's no-fault insurance law is to support "creative" policeoperations of the type that broke the ring as well as strongerlaws.

Police said among the individuals arrested were those withrecords for robbery, rape and assault.

Efforts to pass legislation with stiffer penalties for insurancecrime in New York have been snagged in the legislature over aninsurance policy dispute between Republicans and Democrats.