Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

Major Detroit Auto Insurance Fraud Ring Busted

An investigation conducted by the NICB uncovered the scheme in which individuals would buy vehicles at auto auctions for a few hundred dollars, "resell" the car to another member of the ring for a few thousand dollars, and then file multiple claims for damages suffered when the vehicles were allegedly involved in accidents -- allowing the ring members to collect thousands of dollars on a car purchased for a few hundred dollars.

"Crime rates and false claims drive insurance rates through the roof," said Cox. "By cracking down on these type of fraud rings, we can begin to have a significant impact on reducing the cost of insurance, especially in our core urban areas."

The total amount of fraud perpetrated by the group is approximately $1.47 million. A sweep by the MSP has led to the arrest of ten of the suspects. MSP continues to search for the remaining six suspects.

All but one of the ring members face one count of racketeering, and each face at least one and up to five counts of insurance fraud. If convicted, maximum penalties range from four years and/or $50,000 up to 20 years and/or $350,000.

"Combating insurance fraud is everybody's job, from the insured to the insurer, because these crimes affect all of us when we pay premiums," said Judith Fitzgerald, NICB Senior Vice President. "NICB is extremely pleased with the results of the investigation so far as we know insurance fraud is a pervasive problem. We appreciate the efforts of all parties involved and their cooperation on this investigation."

"These arrests are an excellent example of cooperation between agencies," stated D/F/Lieutenant David W. Peltomaa, commander of the Michigan State Police Special Investigation Section. "By working with the Attorney General's Office and several local, state and federal law enforcement agencies, we were able to apprehend ten suspects in this case, four of which were habitual offenders."

"OFIS is very concerned about insurance fraud as it contributes to the high premium rates in urban areas -- and across the state," said Commissioner Linda A. Watters. "I am proud that Luke Hasbany, one of the many dedicated and professional OFIS insurance investigators, participated in the investigation and represented us so well."

©2003 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?