$1.7M insurance fraud ring busted

Sixty one individuals have been charged in a $1.7 million undercover insurance fraud “sting” operation that resulted in the recovery of 70 high-end vehicles, including BMWs and Cadillacs, that had been falsely reported as stolen by their owners.
Fifty-one of the individuals are in custody. The remaining ten are presently being sought.
According to the charges, a vehicle owner would deliver his/her car to a so-called “middleman” with the understanding that the middleman would then dispose of the vehicle. The owner would then falsely report the car stolen to the police and file an insurance claim for the “theft.” In turn, the middleman would deliver the car to a Queens garage — known to accept insurance job vehicles and discretely dispose of them — for a fee based upon the condition of the vehicle.
Unbeknownst to those charged in the scheme, the owner of the garage was an undercover detective.
Among the 41 individuals charged with giving up their vehicles are a New York City police officer, the director of security at a city-run hospital, a New York City buildings inspector, a Virginia physician and an employee with the U.S. Department of Homeland Security. An owner and employee of a Long Island used car lot are among the 15 individuals charged with brokering the vehicles. Five other individuals are variously charged with possessing stolen vehicles or possessing and/or removing vehicle identification numbers from vehicles.
The 18-month investigation dubbed “Operation Disappearing Act” was conducted utilizing various law enforcement techniques — including court-ordered wiretaps, as well as video and physical surveillance.
“In recent years we have seen an alarming increase in automobile insurance fraud in the New York metropolitan area . . . ,” said District Attorney Richard A. Brown. “The cost of automobile insurance fraud is enormous - estimated by the insurance industry at $23 billion nationwide each year — and is ultimately passed on to the consumer by way of ever increasing insurance premiums.”
The defendants have been variously charged with grand larceny, attempted grand larceny, insurance fraud, falsifying business records, criminal possession of stolen property, criminal possession of a forged instrument, forgery of a Vehicle Identification Number, illegal possession of a Vehicle Identification Number, and illegal possession of Vehicle Identification Number plates. Most of the defendants face up to seven years in prison, if convicted.
The operation also led to the discovery of a total of more than 40 false insurance claims that potentially could have cost various insurers, including GEICO and Allstate, hundreds of thousands of dollars in settlements. The total amount of payoffs by undercover detectives for all 70 vehicles involved in the investigation was about $70,000, or approximately $1,000 per vehicle.