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DA recoups $505K from auto insurance scheme

TimesLedger Newspapers

KEW GARDENS — Queens District Attorney Richard Brown’s office is doing everything it can to help reduce the astronomical rates borough residents pay for car insurance.

Last week, DA Brown distributed $505,000 in restitution checks to 16 insurance companies that had been defrauded of the money in a widespread, no-fault auto insurance fraud scheme.

The checks were collected from 61 individuals and two corporations who bilked the insurance carriers for unnecessary medical services for exaggerated or fabricated injuries, Brown said.

“The defendants deliberately caused or staged more than 40 automobile accidents with unsuspecting drivers,” Brown said in a statement. “Although successful investigations such as this one have helped reduce no-fault insurance fraud in New York by about 25 percent since 2002, it continues to cost the insurance industry about $14 billion a year in false claims nationwide.”

He went on to say that fraud results in New York drivers’ annual premiums being 10 percent higher than they would otherwise be.

The investigation — dubbed Operation: Direct Hit — into the scheme got underway in March 2007 when evidence showed a specific accident pattern in the 109th Precinct dating to 2005, Brown said. In a typical incident, a “victim” vehicle would be hit by another vehicle while pulling out of a driveway or parking lot, resulting in faked treatments for extensive medical expenses at the same clinic.

In October 2008, 61 individuals and two corporations were charged for their role in the scheme. Brown’s office also filed a civil forfeiture action against several of the defendants — which resulted in the restitution payouts last week.

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