Allstate Files Suit Against New Jersey Fraud Ring

August 16, 2000

Allstate New Jersey Insurance Company filed its second lawsuit Tuesday in the ongoing investigation of a major staged automobile accident insurance fraud ring in Camden County, New Jersey.

One hundred seventy-five individuals were named as direct defendants in the complaint for their alleged participation in the staged accidents together with 123 medical providers and facilities in the 10-count complaint filed in the Superior Court of New Jersey, Camden County.

The suit also names the American Arbitration Association as a defendant in interest. The direct defendants are accused of various activities related to the staging of 30 phony auto accidents generating $2.4 million in bogus claims against Allstate New Jersey.

The suit alleges that individuals feigned injuries resulting from pre-arranged auto accidents in order to create fraudulent medical bills and bodily injury claims. Illegal runners allegedly recruited individuals to participate in the accidents and arranged meetings between the victims and legal and medical professionals. To date, Allstate New Jersey has paid approximately $159,400 on claims resulting from the staged accidents identified in this filing. All further payments are on hold pending the outcome of this litigation.

Allstate New Jersey is seeking an order declaring that it has no obligation to make payment of all pending bills and is also seeking restitution of all paid claims and treble damages as allowed under the New Jersey Insurance Fraud Prevention Act. This case follows an initial filing in October 1999 (Allstate vs. Salkauski CAM-L-746699), where 176 individuals were accused of staging 26 separate automobile accidents tied to the Camden County ring. Many of the same defendants are named in both filings.

Allstate New Jersey’s Special Investigative Unit believes that the Camden ring involves over 100 staged accidents and intends to file additional lawsuits as more evidence is uncovered. Allstate New Jersey is being represented in the matter by the firm of Pringle Quinn Anzano, P.C. of Belmar, NJ.

In 1999, the work of the Allstate New Jersey’s Special Investigative Unit resulted in legal action against 388 suspected defrauders totaling $54 million. In 1998, the company also established a front-end Fraud Prevention Unit, to help identify and eliminate potential fraud at the time of application.

On October 19, 1999, Allstate New Jersey filed the first in what is expected to be a series of actions related to a major automobile accident fraud operating in the Camden area. In the October filing, Allstate New Jersey identified 26 fraudulent accidents and 176 individual defendants. Today’s action is the follow-up to the filing, with 30 additional allegedly staged accidents identified.

Allstate New Jersey has evidence linking well over 100 accidents, and $12 million in fraudulent claims, to the Camden staged accident ring. The investigation into this case is continuing. The defendants are accused of various activities related to the staging of 30 phony auto accidents generating $2.4 million in allegedly fraudulent claims against Allstate New Jersey.

The suit alleges that individuals feigned injuries resulting from pre-arranged auto accidents in order to create fraudulent medical bills and bodily injury claims, with the alleged complicity of defendant medical providers. Illegal runners allegedly recruited individuals to participate in the accidents and arranged meetings between the victims and legal and medical professionals.

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