Posted by Kristin Collins \\
Apr 03, 2011
The number of people implicated in California car insurance fraud cases went up by eight people last week, according to California Insurance Commissioner Steve Poizner. The individuals who are being charged with this crime are individuals who allegedly staged car accidents and claimed to be party to those accidents in order to make personal injury insurance claims against auto insurers.
In this particular fraud ring, the implicated individuals received more than $200,000 in payments from various companies. The California fraud tax force cracked down this past October after it had been discovered that ten suspects who had been charged with operational hit-and-run from other investigations which had been going on for the past calendar year.
The supposed ringleader of the operation, a 31 year old individual from Chula Vista named Jay Stoney, did not plead guilty when the charges were brought against him on November 2nd. The charges which are levied against him and his fellow suspects stem from five various staged accidents in the area.
In typical auto collision fraud cases, a group of people conspire to commit the crime. One party will drive what is called a “hammer” vehicle, which will be driven forcefully into another vehicle, which is termed a “nail” vehicle. Sometimes the nail car is driven by an accomplice; other times it is driven by a completely innocent party. Regardless, insurance claims are made against the insurance of the nail vehicle, under personal injury coverage (PIP). Often, a variation of this trick is for the hammer car to cause a car to strike them from behind, such as with a sudden stop, resulting in a rear-end collision, which is almost always regarded as the fault of the driver who struck the other car in the rear. Disproving their culpability is very difficult.
What normally took place was that “hammer” vehicles, which actually were the causes of the crashes, were dumped at the accident sites prior to the arrival of the police and agents of the California Insurance Commission. Investigators determined that the “hammer” cars were often stolen, or else were maintained at the scene of the staged accident by the owners for insurance purposes, depending on the type of accident. When the same cars and drivers received multiple, similar complaints and claims, the investigation was initiated.
The drivers of the nail vehicles usually went to local hospitals for emergency treatment and received follow-up care for soft-tissue injuries by physical therapists and/or chiropractors, which was billed to the PIP insurance of the hammer vehicle. Once the claims were settled, the perpetrators of the fraud would receive large checks for their medical bills, which often went unpaid anyway.
The biggest occurrence that led to the arrests was when one of the suspects left their backpack in the nail vehicle, supposedly by accident, when they fled the scene. The California Insurance Commission stated that this led to identification and ultimate apprehension of the suspects.
These kinds of frauds increase the insurance bills of every consumer, as the insurance company has to raise rates for everyone in order to keep pace with the costs resulting from fraudulent activity. Similar investigations are ongoing in Florida and New York, as well as proposed changes to insurance legislation to limit payouts on these kinds of claims.
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