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No-fault car insurance scam, tax return fraud and more

Plenty of fault in this ‘no-fault’ car insurance scam

The U.S. Department of Justice has indicted 13 people from two separate criminal gangs for a $100 million car insurance scam that included health care fraud, money laundering and bribery. Licensed doctors, an NYPD officer and an attorney are among the accused in what the DOJ is calling the largest no-fault insurance scam in history. (See “U.S. Attorney Announces The Arrest Of 13 Individuals For $100 Million Healthcare Fraud, Money Laundering, And Bribery Scheme,” Department of Justice, Southern District of New York, Jan. 12, 2022.)

The suspects allegedly leveraged New York and New Jersey’s “no-fault” insurance regulations that require insurance companies to pay all car accident claims that fall below a certain level and pay for medical treatments that result from the accidents. It’s dubbed “no-fault” because no accident party is declared at fault to avoid legal battles.

According to the DOJ, both groups of suspects operated clinics that recruited accident victims for unnecessary treatments and then billed insurance companies for those treatments. One group of defendants allegedly employed “runners” who bribed 911 operators and hospital workers to provide confidential information about accident victims and received accident reports from an NYPD officer. A lawyer laundered the group’s ill-gotten gains through his law firms.

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