Maryland Democratic Gov. Martin O'Malley signed a bill into law today making it a specific crime to stage a car accident to steal insurance money.

His action drew praise from the Coalition Against Insurance Fraud, which mentioned that Maryland is the second state in the nation to pass such a measure. "We commend Maryland for taking this step," said Howard Goldblatt, the Coalition's government affairs director.

The bill(HB 1409) would also limit access by outsiders to police accident reports, thus making it harder to recruit real crash victims to participate in insurance schemes involving fake injury claims. The law takes effect October 1 and was sponsored by Del. Dereck E. Davis, D-Prince George's County.

On a national scale, both reforms are relatively new anti-fraud tools. Only Florida has adopted both measures, and the District of Columbia also limits access to police reports.

Mr. Goldblatt said such targeted fraud laws give prosecutors a courtroom tool providing leverage that can increase convictions.

"Phony injury claims can be highly profitable. That profit incentive makes the rings persistent, well-protected and hard to penetrate and bust. They can be equally hard to prosecute in court," noted Mr. Goldblatt.

Such laws, he said, "help gut staged accident rings by convicting the kingpins. Without this law, prosecutors would have to use other laws that may not as easily fit the elements of this crime."

According to Mr. Goldblatt, the specific crime also serves as a deterrent, "signaling to would-be-fraudsters that police and others are watching for these scams."

Staging a crash would carry a penalty of up to 15 years in state prison and fines of up to three times the amount of stolen insurance money.

The measure was put forward, the coalition said, after it suggested the language to a state legislator who was seeking effective bills to attack accident rings.

According to the coalition, Maryland's densely populated Baltimore-Washington, D.C., corridor is becoming a growing target of auto-fraud rings.

Mr. Goldblatt said that the loosely organized fraud rings will typically pack cars with passengers, then either maneuver innocent motorists into crashes or crash their cars into each other.

Often working in concert with crooked medical clinics and lawyers, the so-called "passengers" will make bogus claims for treating nonexistent injuries. Usually the clinic labels them soft-tissue back and neck injuries, such as whiplash. These are medically subjective and hard for insurers to dispute, the coalition said.

In some cases, no cars are involved. The accidents and injuries happen solely on paper.

Limiting access to police accident reports, the coalition said, addresses another facet of auto fraud rings: enlisting victims of real crashes. Ring members use police reports to identify victims, and then aggressively try to recruit them for unneeded or phantom treatment at crooked clinics, whether or not the victims are injured.

Only accident victims and reporters could access the reports for 60 days after the crash. Conviction would mean up to 15 years in Maryland state prison and a $10,000 fine.

"Relentless focus and pressure are the best strategies for breaking down highly insular accident rings. There's no substitute for the constant--almost daily--pursuit by prosecutors armed with effective fraud laws," Goldblatt says.

Special Reports /

New Maryland Law Sets 15 years For Accident Staging

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