NY Charges 30 in $1.6 Million Stolen Car Insurance Fraud

March 13, 2002

The New York State Insurance Department and NYC law enforcement officials announced that 24 car owners and 6 “middlemen” have been charged with participating in a fraud scheme to collect insurance recoveries for the loss of vehicles falsely reported stolen.

The sting operation, carried out by undercover detectives posing as junkyard dealers, uncovered 68 cases involving car owners who turned their vehicles over to the middlemen to dispose of, and then filed insurance claims, alleging that the cars had been stolen. The charges came following a 26 month investigation.

The NYSID estimates that the false claims payments amounted to $1.6 million.

According to the Queens District Attorney, Richard A. Brown, the investigation began in December 1999, when the NYPD Auto Crime Division set up an undercover automobile buy-back operation on a street corner in Queens Village using detectives posing as junkyard dealers. The detectives had pockets full of marked money, a pager and a cell phone.

Brown stated that, “When word spread that a guy on the street was offering ready cash for cars, the cars started to roll in at a steady rate — about two or three a month.”

“By last August, when the investigation had picked up speed, police and prosecutors obtained a court-authorized wiretap on the cell phone one of the principal defendants — Derek Martinez, 24, an alleged career car thief, who lives in Ozone Park, Queens,” the bulletin continued.”The intercepted conversations provided significant evidence of an ongoing car theft and auto insurance fraud operation as well as information helpful in identifying additional defendants who were alleged associates of Martinez and also acting as middlemen in the massive scheme.”

The announcement indicated that “Operation Street Sweep has resulted in the recovery of 68 vehicles, which include expensive, almost new SUVs, costly Japanese imports, a BMW and even a 2000 Suzuki Model 2100 motorcycle. The operation also led to the discovery of a total of 33 false insurance claims that potentially could have cost various insurers, including Allstate, State Farm, and Geico, $700,000 in settlements. The total amount of payoffs by undercover detectives for all 68 vehicles involved in the investigation was about $59,000. Both State Farm Insurance and 1 Beacon Insurance provided funds to aid in the investigation.”|”ny, charges, 30, in, $1.6, million, stolen, car, insurance, fraud

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