Tip From Liberty Helps Bust Major Ring

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 helped break an auto injury fraud ring that cost insurers "tens of millions" and involved more than 150 persons, many of them violent felons, New York City officials said.

Law enforcement action against the group was announced Sunday after a sting operation led to the arrest of 50 persons who were lured 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 insurance company representatives and calling them at home to say they could collect a claim check for up to $11,000, by visiting an office in the borough of Queens.

Those who showed up were handcuffed and arraigned on fraud charges.

The NYPD, which investigated the case with help from the Brooklyn District Attorney's Office, the National Insurance Crime Bureau and Boston-based Liberty Mutual, said undercover work on the case began in August 2002 after Liberty and NICB provided them with information about the ring. A spokesperson for Liberty said he could 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 with several individuals faking injuries. After the runner obtained an accident report, the "victims" would go to doctors and other health providers who supplied false medical information for a price that was used when attorneys filed claims of up to $50,000.

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

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

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

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