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Gallagher Announces 21 Arrests Following Investigation Uncovering More than 60 Staged Crashes in Tampa Area


CONTACT: Tami Torres or Nina Banister
(850) 413-2842 
TAMPA—Tom Gallagher, Florida's chief financial officer, announced today the arrests of 21 individuals for allegedly staging 10 auto crashes stemming from an investigation that uncovered more than 60 staged crashes throughout Tampa Bay.  The 10 staged crashes that these individuals are being charged for resulted in nearly $1 million in fake claims.  Today's round-up was organized by the Department of Financial Services, Division of Insurance Fraud (DIF), and the Federal Bureau of Investigation (FBI).
"Aggressive investigations and prosecutions coupled with legislation I'm advocating this year will tighten the net around these criminals," said Gallagher, who oversees the Department of Financial Services.    "We must continue the fight to protect Floridians from the danger and cost inflicted by insurance fraud schemes."
The arrests are the result of federal indictments unsealed today in the Middle District of Florida.  Among those arrested today are medical clinic owners, staged crash organizers and accident participants. Most auto insurance fraud cases involve the organizing of staged auto crashes in order to fraudulently bill for services covered by personal injury protection (PIP) coverage, which provides up to $10,000 for medical bills from an auto accident, regardless of who is at fault.  Florida law requires drivers to carry a minimum of $10,000 in PIP coverage and $10,000 in property damage liability coverage.
Building on hard-hitting legislation passed in 2001 and 2003, Gallagher is pushing for one of the largest and most far-reaching PIP reform bills ever brought before the Legislature.   The legislation, sponsored by Rep. David Rivera (House Bill 561) and Sen. J.D. Alexander (Senate Bill 1596), contains several proposals, including:
• Make it a second-degree felony to do "paper" or "phantom" automobile accidents, with a minimum mandatory two-year prison sentence.  "Paper" or "phantom" accidents occur when a driver files a fraudulent accident report on a crash that never happened and then bills the insurance company for medical services.
• Make it a third-degree felony for any service provider, such as a clinic or body shop, to waive insurance deductibles as a general business practice.  Waiving deductibles makes it easier for individuals to profit from PIP fraud schemes.
• Revoke the driver license of any individual convicted of committing auto insurance fraud.
• Require medical clinics to post the state's Fraud Fighters reward program hotline and reward program information.  

• Amend the patient-brokering statute to make current provisions more widely applicable to all medical practitioners.  Also address the problem of professional patients -- those who seek a kickback in return for their cooperation in a PIP billing scheme.
• Create a forfeiture fund for revenue obtained from property seized in insurance fraud-related felony cases.  Proceeds would be used for special equipment and enforcement operations.
• Enhance fines for insurance companies who fail to implement or follow their anti-fraud plan or Special Investigation Unit (SIU) description filed with DIF.
The National Insurance Crime Bureau (NICB) assisted in the investigation that resulted in today's arrests.  The operation included a two-year undercover operation and revealed some 62 staged crashes that occurred between 1999 and 2005.  The targets of the operation were individuals who profit from insurance settlements based on injuries obtained from non-existing or staged automobile accidents.
Assisting in the arrests today were personnel from the FBI, DIF, the US Marshal's Service, US Immigration and Customs Enforcement (ICE), the US Postal Inspection Service and the Hillsborough County Sheriff's Office.  In all, 17 DIF detectives and supervisors were involved in making the arrests, and Det. Jim Kappel of DIF's Hillsborough office participated from the start of the operation.  The charges will be prosecuted by the United States Attorney's Office.
"I commend the investigators and prosecutors for their diligence in bringing these individuals to justice," Gallagher said.
The department's insurance fraud division has made more than 1,000 PIP fraud-related arrests since 2001 and during that time has consistently led the nation's fraud bureaus in insurance fraud arrests and convictions.
The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers' compensation.  To report information about this case or any other possible insurance fraud case, call the department's Fraud Fighters hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to a conviction.

Click here for the press release from the Office of the United States Attorney, Middle District of Florida.