Weekly Car Insurance Crime Watch: January 17

Suspect in custodyThe news doesn’t stop, because crime never does either.

With the deluge of crime stories that Online Auto Insurance News (OAIN) sees every day relating to car coverage, here is a roundup of this week’s biggest headline-grabbing yarns.

And it certainly is a deluge. This week, a travel northward to Canuck Country highlights the benefits that crime-fighting there has had on auto insurance costs; a six-year scheme in Wisconsin lands a repair shop owner in prison; and a couple of stories about how time is always on the side of car insurers.

Wisconsin Body Shop Owner Sentenced for Six-Year, $1.3M Scheme

Wisconsin authorities just closed the book on a big case, announcing last week that a 121-month sentence was handed down to a John Henricks III, a body shop owner who turned his business, Custom Collision, into a million-dollar operation built on false invoices and staged car crashes.

According to a release from the office of Western District of Wisconsin U.S. Attorney John Vaudreuil, authorities identified 46 “instances of fraud” at Custom Collision, where Henricks “coerced” employees into the six-year scheme that hit 19 auto insurers for more than $1.3 million in false claims.

John Henricks pleaded guilty to a charge of using the U.S. mail to defraud car insurers last August.

And if you think your mechanic is untrustworthy, he’s probably not as bad as Henricks. U.S. District Judge Barbara B. Crabb  said in her sentencing statement that Henricks couldn’t be trusted “to tell the time of day.”

In Canada, Crime-Fighting Credited for Falling Insurance Rates

A short trip up the continent shows that our neighbors to the North aren’t all that different. When it comes to car insurance-related crime in Canada, crime rings still stage car crashes; fraudsters still file false invoices; and authorities still chase them.

The Financial Services Commission of Ontario (FSCO) announced the conviction this week of three rehab clinics in the Toronto area for “auto insurance offences” (ed. note: That’s Canadian spelling, eh.).

The convictions are the result of the work of Toronto Police on “Project Whiplash,” the name of the investigation into “deceptive acts or practices” by the clinics that authorities allege bilked $4 million in false claims from auto insurers.

Several fines were handed out to principal members of the crime ring.

FSCO’s announcement comes in the middle of a large-scale effort by Canadian authorities to fight auto insurance fraud. Last January, Canadian lawmakers gave FSCO the go-ahead to craft “regulatory amendments to help prevent auto insurance fraud and abuse.”

One of those amendments set tighter regulations on “health clinics that invoice auto insurers.” (Sound familiar, Floridians?)

FSCO’s investigation is one reason that auto insurance rates are shrinking, according to the Ministry of Finance. According to a release this week, auto insurance rates in Ontario have fallen nearly 4 percent since August 2013.

“We are on track to meet our goal of an average eight percent reduction by August 2014, and by continuing to fight fraud and reduce uncertainty in the system, we’re confident we’ll get there,” Charles Sousa, minister of finance, said in a statement.

A Day Too Late Still Means Fine for Uninsured Driver in Idaho

All uninsured drivers who’ve been in a car accident had this thought immediately post-crash: If I go buy car insurance right now, can I get away with being uninsured?

This story answers that question: no.

Scott Costello bought auto coverage on his 2002 Subaru Impreza on August 1, 2011, with Sagamore Insurance Company. On August 2, 2011, Costello contacted Sagamore again to file a car damage claim.

A claims investigation found that Costello had been involved in a collision on August 1, 2011, before getting coverage with Sagamore, though he told authorities at the scene of the crash that he had car insurance.

“Within minutes of telling the officers he had insurance on his vehicle, he contacted Sagamore to obtain a policy,” according to KMVT.

Costello was sentenced this week for insurance fraud and received a $300 fine and $90 in restitution, according to KMVT.

Six Years Between Claims Still Means Arrest for North Carolina Man

If the story above is a lesson about the short memories of car insurers that’ll catch even the smallest oversights, the following story is a lesson about the long memories of car insurers who can wait in the weeds for years before collecting their due.

Cain Michael Cain filed multiple claims with multiple car insurers “for vehicle damage from a single accident,” according to the North Carolina Department of Insurance (NCDOI).

Cain milked that same claims cow for a lot of money.

The first claim was filed in May 2007 with 21st Century, and Cain got $4,775 out of it.

The second claim was in 2012, and Cain got $1,771 from Discovery Insurance Company.

In April 2013, Cain filed a third fraudulent claim with Insurance House-Southern General and got $300 for a rental car. But before he could get a claims payout for vehicle damage, “Insurance House stopped the payment on the check intended for the vehicle repair and contacted” the NCDOI said.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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