Mass. Fraud Fighters Reach Milestone

Five years after the creation of Massachusetts’ first local anti-insurance fraud team, the state’s Insurance Fraud Bureau says the combined local task forces have charged over 1,000 people with insurance fraud.

The crackdown stems from a network of 11 separate anti-fraud units in urban areas across the Bay State. The first, in Lawrence, was created in Oct. 2003 after local police discovered that a 65-year-old woman died in an auto accident while participating in a scheme to stage accidents and file false bodily injury claims.

That investigation led to the creation of the first Community Insurance Fraud Initiative (CIFI) task force to combat fraud at the local level. It combined the resources of the Insurance Fraud Bureau of Massachusetts, the Lawrence Police Department, the Essex County District Attorney’s Office, the Attorney General’s Office and several insurers. It became the model for 10 more that were launched in and around cities with higher-than-average rates of suspected auto insurance fraud – Springfield/Holyoke, Brockton, Lynn, Boston, Lowell, Randolph, Chelsea, New Bedford/Fall River, Revere and Worcester.

Investigations by the 11 CIFIs have led to charges or arrests of more than 1,000 individuals for alleged insurance fraud, including lawyers, chiropractors and “runners” who have facilitated these schemes.

“The communities where CIFIs have been established have witnessed a reduction in reported accidents that has translated into millions of dollars in fewer insurance claims coming from those cities,” said Daniel J. Johnston, executive director of the Insurance Fraud Bureau.

The statewide average number of injury claims filed per 100 accidents, a prime indicator of fraud, has dropped from 43 to 28 claims per 100 accidents. In addition, auto claims payments in the CIFI communities had declined by a total of more than $252 million by year-end 2007.

The Insurance Fraud Bureau is privately funded by the state’s insurance industry.