Tuesday, April 19, 2005

D.A. BROWN: BROOKLYN MAN PLEADS GUILTY TO INSURANCE FRAUD IN ONGOING “OPERATION WHIPLASH” PROSECUTION; FACES UP TO SIX YEARS IN PRISON

Queens District Attorney Richard A. Brown announced today that a Brooklyn man has pled guilty to insurance fraud for bilking State Farm Insurance out of over $32,200 through the filing of fraudulent personal-injury claims related to a fictitious accident in January 2001 that purportedly took place in Richmond Hill, Queens.

District Attorney Brown said, "Auto insurance fraud has been a crime of opportunity for some that law enforcement has turned into a high-risk venture leading to a dead end behind bars. The case sends a message that those who engage in insurance fraud will be detected, prosecuted and imprisoned.”

The District Attorney identified the defendant as David Smith, 45, of 161 Halsey Street in Bedford-Stuyvesant, Brooklyn, a defendant with two previous felony convictions, including attempted criminal possession of a weapon in 1980 and intentional manslaughter in 1983, a crime for which he was to be on parole until 2007. The defendant entered a plea of guilty yesterday in Queens County Supreme Court before Justice Barry M. Kron, who indicated that, on May 5, 2005, he would sentence the defendant to an indeterminate prison term of from three to six years. The defendant is also expected to serve additional prison time as a result of a parole revocation based on his guilty plea.

District Attorney Brown said that the disposition stems from “Operation Whiplash,” a major auto insurance fraud investigation started in 1999.

The District Attorney said that the investigation “uncovered an organized network of attorneys, doctors, medical professionals and others operating one of the largest no-fault insurance fraud rings ever uncovered in New York.”

District Attorney Brown said that the investigation determined that the defendant based his fraudulent insurance claims on an accident report, filed with the New York City Police Department, that purported to verify his involvement in an alleged car accident on January 11, 2001, about 5 p.m., near Liberty Avenue and 111th Street in Richmond Hill, Queens –- an accident that never happened.

According to the District Attorney, the defendant signed paperwork, including a no-fault insurance application, and attended an extensive course of medical treatment by posing as a victim of the non-existent car accident. As a result of defendant’s actions, State Farm was billed $54,603 for defendant’s medical treatment, of which they paid out $21,216. Additionally, defendant filed a bodily-injury civil claim relating to the fake accident and demanded $100,000 from State Farm, leading to an additional $11,000 payout in settlement of the claim. Altogether, State Farm paid out more than $32,200 based on defendant’s fraudulent insurance claims.

The fraudulent reports were submitted with the assistance of NYPD Police Administrative Aide Belinda Lovander previously prosecuted for Enterprise Corruption in connection with her involvement in the far-reaching scheme. She was sentenced in 2002 to a prison term of from two years to six years.

District Attorney Brown said, “Defendant Smith was identified during the investigation of the scheme as a ‘jump-in’ who was paid to pose as an accident victim and to attend medical treatments. Typically, “jump-ins” such as Defendant Smith are enticed by the promise of lucrative insurance payouts and free medical treatment. NYPD detectives and prosecutors from my Organized Crime and Rackets Bureau have been diligently reviewing the hundreds of bogus accident reports that PAA Lovander processed in order to compile evidence against the wrongdoers. That important work is continuing.”

The companies victimized by the scheme included Allstate, Geico, Interboro, Liberty Mutual, Progressive and State Farm Insurance Companies.

The District Attorney said that the conviction is the latest development in a series of cases in Queens County targeting auto insurance fraud that began in 1999. The current investigation was conducted by the NYPD’s Organized Crime Control Bureau Auto Crime Division, the NYPD’s Fraudulent Accident Investigation Squad and the District Attorney’s Organized Crime and Rackets Bureau, in conjunction with the New York State Insurance Department and the New York State Department of Motor Vehicles and the assistance of the insurance industry.

District Attorney Brown expressed his appreciation to Police Commissioner Raymond W. Kelly, Former New York State Department of Insurance Superintendent Gregory V. Serio and Former New York State Department of Motor Vehicles Commissioner Raymond P. Martinez for their cooperation and support in the investigation and prosecution and to Allstate, Geico, Interboro, Liberty Mutual, Progressive Insurance and State Farm Insurance Companies for their assistance.

The investigation was conducted by Detectives Robert Magrino of the NYPD Auto Crime Division under the supervision of Deputy Inspector Howard Lawrence, Captain Michael Byrne, Lieutenant Gene Borelli and Sergeant George Nash and the overall supervision of Chief Douglas Zeigler, Organized Crime Control Bureau; Gerard Shanley of the NYPD Fraudulent Accident Investigation Squad under the supervision of Sergeant John Moran, Lieutenant Glen Halloran, Captain John F. Philbin and Inspector Joseph A. D’Amico under the overall supervision of Deputy Commissioner for Operations Garry F. McCarthy and Ronald Georg of the District Attorney’s Detective Squad under the supervision of Chief Lawrence J. Festa and Deputy Chief Albert D. Velardi. Assisting the investigation were Herb Wallace of Progressive Insurance Company, Charlotte Watters of Liberty Mutual Insurance Company, Sandy Casale of Interboro Insurance Company, Debbie Pasquaretta of Allstate Insurance Company and Annette Nazarro of Geico Insurance Company.

The case against David Smith is being prosecuted with the assistance of Detective Michael McCarthy of the NYPD Auto Crime Division and Robert Witherspoon of State Farm Insurance.

The case against David Smith is being prosecuted by Assistant District Attorney Michael A. Wiesenfeld of the District Attorney's Organized Crime and Rackets Bureau under the supervision of Assistant District Attorneys Gerard A. Brave, Bureau Chief, Marc P. Resnick, Deputy Bureau Chief, and Peri A. Kadanoff, Unit Chief, and the overall supervision of Executive Assistant District Attorney for Investigations Peter A. Crusco and Deputy Executive Assistant District Attorney for Investigations Linda M. Cantoni.