Police Smash Massive NYC Auto Insurance

December 6, 2001

Law enforcement officials announced the break up of a multi-million dollar automobile insurance fraud ring in the New York metropolitan area, resulting in charges being filed against 112 individuals and four corporations accused of staging false accidents, and collaborating in filing false claims with insurance companies in a well organized scheme to collect millions of dollars.

The New York State Insurance Department, the New York City Police and State Police cooperated in a 14 month investigation to obtain indictments in “one of the largest no-fault insurance fraud rings ever uncovered in New York.” Seven individuals and one corporation were charged under the State’s Organized Crime Control Act.

“Among those charged are three medical doctors, two medical clinics, two chiropractors, a physical therapist, an acupuncturist, two lawyers and an NYPD police administration aide,” said an announcement from the NYSID. “Ninety-three others are charged in separate criminal complaints with being participants in the scheme.”

The investigation, dubbed “Operation Whiplash,” identified not only the ring leaders, who organized the fraud scheme, but also “those acting as ‘runners’ and ‘victims’ who were also involved. The scheme involved fake accidents, and bogus accident reports issued by the police aide, medical bulls for unnecessary, or unperformed diagnosis and treatment, claims for nonexistent physical therapy and medical appliances, as well as phony prescriptions and fraudulent billing for medical tests.

Queens County District Attorney Richard A. Brown stated that “The three million dollars in potential insurance company liability from the filing of fraudulent insurance claims uncovered during our investigation, which included extensive surveillance, electronic eavesdropping, search warrants, detailed document gathering and analysis and use of undercover officers, is likely just the tip of the iceberg on the profits allegedly made by this criminal enterprise in the metropolitan area.”

“Fraud rings, medical mills and bogus health treatment claims take hard earned money out of every insurance policyholder’s pocket,” said NYSID Superintendent Gregory V. Serio in a strong statement.” Unscrupulous lawyers, doctors and other medical providers have take advantage of the non-fault system – it has become big business to rip off insurance companies and new York consumers are paying the price.”

The record setting number of arrests showed his department’s commitment, and other law enforcement agencies’ commitment to fight against insurance fraud. “You won’t make money by defrauding the insurance system here in New York,” said Serio.

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