TODAY'S INSURANCE FRAUD HAS 'BONNIE AND CLYDE' OVERTONES

Rough Notes, Jan 2004 by Zinkewicz, Phil

Innocent bystanders are pulled into a criminal act to defraud

In the 1940s, James Cagney and Humphrey Bogart teamed up in a film called "Roaring Twenties," with both tough guys playing prohibition-era underworld czars. Cagney was the nice czar and Bogey was the sinister czar. The film shows clearly how malevolent miscreants are able to seize onto an unpopular law and use it to their own advantage. There is plenty of bathtub gin being swilled as well as the expected murder and mayhem.

The film is a particularly significant one because it shows not only how the "cement shoes" underworld of the Roaring Twenties operated, but also because it shows how average people are drawn into the horror of it all-tommy guns spraying bullets in restaurants where innocent patrons have come for an evening meal, shots fired from automobiles as they drive through streets filled with passersby. At first, the public looked upon these gangsters as heroes of a sort, fighting with bravado what they perceived as an unjust law. But when innocent people began dying because of the gangsters' internal rivalry, a public uproar resulted and hoodlums such as those characterized by Cagney and Bogart were finally put away.

Although the decade of the '20s is long past, the streets of our cities are still "roaring" today, albeit not with tommy guns. The roar is coming from automobile engines-automobiles that are being used by organized fraud rings to stage car accidents and bilk insurers out of billions of dollars. Of course, consumers pay a good portion of the price for these staged accidents but, more important, some are paying with their lives.

It works this way. A car, packed with passengers who are in on the scheme, darts in front of an unwitting motorist, suddenly stops and forces the motorist into a rear-end collision at low speed. Faking painful back and neck injuries, the passengers team with crooked doctors, lawyers and chiropractors to submit large and bogus bodily injury claims against auto insurers.

This is not something new. These fraud rings have existed for years, but recently these events have brought with them some violent outcomes. At least two people, both grandmothers, died in recent months as the result of botched staged accidents. One of these women was Alice Ross, who lived most of her 71 years in the Queens area of New York City. She doted on her four children and four grandchildren and loved gardening, television game shows and books.

Holidays and birthdays were special events for Alice, when she gathered with her family and enjoyed their warm feelings for each other. This fateful March saw a slew of birthdays-her 71st, the 49th for her twin sons, Mike and Steve, and the 4th for grandson Brian-a perfect reason for getting together.

No one knew this celebration would be her final one. Five days later, her Buick Regal was struck, sending it careening into a tree and killing Alice almost instantly. She had been maneuvered into a staged accident to scam insurance money, Queens District Attorney Richard Brown said. The "hit" car was driven by the alleged ringleader, 22-year-old Waurd Demolaire. He is now charged with murder (2nd degree) and a host of other offenses.

Jim Quiggle, a spokesman for the Coalition Against Insurance Fraud (CAIF) says that "Ross' death adds a tragically human face to the epidemic of staged accidents that are growing increasingly violent and have helped make auto premiums in New York among the nation's highest."

He points out that investigators recently busted more than 600 people involved with one staged accident ring in Suffolk County-possibly the largest such bust ever. "Russian gangsters and other ethnic groups are playing a growing role in staged accidents, a perverse route to the American Dream," says Quiggle. "Ring members are shooting each other in turf wars. Staged accidents increasingly are the domain of highly organized rings, not just mom and pop operators anymore. In fact, one NYC ring was so profitable and well-organized that a woman even sent in a resume seeking work as a fake passenger."

Though deaths are rare in staged accidents, says Quiggle, Ross' death shows the schemes still have a constant potential for sudden and unplanned killing of innocents. It is also likely that many undetected staged auto accidents have injured innocent people, perhaps some seriously. Had Alice walked away from that accident, says Quiggle, chances are there would have been no fraud uncovered and no charges filed.

A great many of these staged accident fraud rings operate in New York. In fact, unofficially, New York is becoming tagged the "unofficial capital" of the nation's staged accident rings. And, in New York alone the problem is spreading. According to the National Insurance Crime Bureau (NICB), insurance fraud rings, long established in New York City, are now targeting the suburbs for their scams, as evidenced by the recent busting of the fraud ring in Suffolk County.

The NICB launched its initial investigation acting on information from one of its member insurance companies, which alerted the insurance industry's crime-fighting organization to a series of suspicious auto accident injury claims in Suffolk County-all of which involved drivers from Brooklyn, according to Robert M. Bryant, president and CEO of the NICB.