Hundreds charged in $48 million auto accident scam

GARDEN CITY, N.Y. -- Hundreds of people -- including doctors, lawyers, chiropractors and psychologists -- have been indicted on insurance fraud and other charges involving tens of millions of dollars in claims on staged auto accidents.

Nearly 600 indictments have been filed in connection with the fraud ring, and further charges are likely, Suffolk County District Attorney Thomas Spota said Tuesday.

In all of the alleged accidents, the insurance company was State Farm, which allegedly was defrauded out of $48 million. The average car accident resulted in claims of nearly $800,000, prosecutors said.

The charges follow a yearlong investigation into accidents that took place on Long Island, which includes Suffolk County, and in New York City, Spota said. Only 86 defendants have been arraigned, but the remaining indictments are expected to be unsealed in the coming weeks, he said.

Karen Garsky, a State Farm spokeswoman, said that insurance fraud in New York has been estimated at "a billion dollar a year business."

Many of those arrested so far are American citizens of Russian descent living in the New York City borough of Brooklyn, said Robert Clifford, a spokesman for Spota.

According to investigators, the ring would pay $500 to people willing to be passengers in cars that would prowl highways usually looking for women traveling alone or with young children, or elderly drivers. The scammers would then create a situation where they either crashed into or let another vehicle crash into them.

After the accident, the passengers would file phony claims of injuries with physicians and other medical professionals, who were given a cut from the insurance payoff in return for their cooperation, prosecutors said.