N.Y. Fraud Investigation Results in 71 Arrests

November 22, 2002

Queens District Attorney Richard A. Brown, Police Commissioner Raymond W. Kelly and New York State Insurance Superintendent Gregory V. Serio, announced today that 28 car owners and 43 other individuals have been arrested or are being sought in a large-scale $1.0 million automobile theft and insurance fraud “sting” operation.

Police Commissioner Kelly said, “Our undercover detectives did an outstanding job running the ‘sting’ operation throughout this 16-month, multi-agency investigation. They maintained their cover and collected enough evidence to ensure a strong prosecution. This crime ring made hundreds of thousands dollars by filing false claims with insurance companies and selling off cars for parts. They are a diverse group of criminals from many backgrounds, but they committed similar crimes and now they will pay the price in prison.”

The centerpiece of the operation was a police undercover towing and wrecking garage in Ozone Park, Queens that served as a virtual motor vehicle fraud drive-in center and at which illicit transactions were audio and video taped by NYPD Auto Crime Division detectives.

Among the defendants charged are a Manhattan financial advisor, a New York City firefighter and a retired New York City transit worker who allegedly gave up their vehicles and thereafter falsely reported them as having been stolen in order to obtain insurance settlements. The charges are contained in 15 indictments and 46 criminal complaints.

The arrests were the result of an investigation known as Operation READY, WILLING & ABLE, the latest of a series of undercover operations in Queens County targeting auto insurance fraud that began in 1991 and which has resulted in an 82.3 percent reduction in the number of vehicles reported stolen in Queens County since December 1990.

The current “sting” operation was conducted by the NYPD’s Organized Crime Control Bureau Auto Crime Division, the District Attorney’s Organized Crime and Rackets Bureau and the New York State Insurance Department.

The District Attorney said that the investigation began in July 2001 when undercover detectives assigned to the NYPD Auto Crime Division set up a towing and wrecking business — Able Towing — at 137-25 78th Street near Linden Boulevard in Ozone Park, Queens. The detectives put out the word on the street that they would pay cash for cars “no questions asked” and began to purchase vehicles from middlemen who were disposing of vehicles unwanted by their owners.

The detectives carefully gathered incriminating evidence as vehicles from insurance fraud cheats were driven to their undercover garage over the ensuing 16 months. The evidence included police and insurance records which contained claims by all of the vehicles’ owners that their vehicles had been stolen.

According to the charges, the car owners falsely reported to police that their vehicles had been stolen, when, actually, their vehicles were in the custody of the undercover police officers who were running the “sting” operation. The car owners are alleged to have also filed claims with their automobile insurance carriers falsely reporting that their vehicles had been stolen and to have thereafter received settlements of up to $33,600. In each instance, car owners allegedly transferred the cars they purportedly had reported as stolen to other individuals — middlemen — who in turn sold them to undercover detectives for as little as $500 each.

The defendants have been charged with various crimes including Grand Larceny in the Third Degree, Insurance Fraud in the Third Degree, Falsely Reporting an Incident in the Third Degree and Conspiracy. Most face up to seven years in prison, if convicted.

The operation has resulted in the recovery of 43 vehicles, including expensive, almost new SUVs including a 2002 Jeep Liberty, a Mercedes Benz worth $32,000 and a Lexus worth $27,000. All 43 vehicles together have a total market value of approximately $1.0 million.

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