Maryland became only the second state to make staging an car accident to steal insurance money a specific crime when Gov. Martin O’Malley signed a bill into law last week.
According to the Coalition Against Insurance Fraud, the new law (HB 1409) also would limit access by outsiders to police accident reports, thus making it harder to recruit real crash victims into insurance schemes involving fake injury claims.
The law takes effect October 1, and was sponsored by Del. Dereck E. Davis (D-District 25-Prince George’s County).
Both reforms are relatively new anti-fraud tools nationally. Only Florida has adopted both measures, and the District of Columbia also limits access to police reports, according to CAIF.
“Phony injury claims can be highly profitable. That profit incentive makes the rings persistent, well-protected and hard to penetrate and bust. They can be equally hard to prosecute in court, but targeted fraud laws give prosecutors leverage that can increase convictions,” says Howard Goldblatt, the coalition’s director of government affairs.
Goldblatt said making staged accidents a specific crime arms prosecutors with a courtroom tool that helps convict the kingpins. Without this law, prosecutors would have to use other laws that may not as easily fit the elements of this crime.
Staging a crash would mean up to 15 years in state prison and fines of up to three times the amount of stolen insurance money. The measure surfaced when the CAIF suggested it to a state legislator who was seeking effective bills to attack accident rings, according to Goldblatt.
Auto-fraud rings typically will pack cars with passengers, then either maneuver innocent motorists into crashes or crash their cars into each other, Goldblatt says. Often working in concert with crooked medical clinics and lawyers, the so-called “passengers” will make bogus claims for treating nonexistent injuries.
In some cases, no cars are involved. The accidents and injuries happen purely on paper.
Limiting access to police accident reports addresses another facet of auto fraud rings—enlisting victims of real crashes. Ring members use police reports to identify victims, then aggressively try to recruit them for unneeded or phantom treatment at crooked clinics—whether or not the victims are injured.
Only accident victims and reporters could access the reports for 60 days after the crash. Conviction would mean up to 15 years in Maryland state prison and a $10,000 fine.
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