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Post date: January 24 2013

A.G. Schneiderman Announces 16 Arrests In Staged Automobile Accident Scheme

Defendants Crashed Into MTA Buses, Unsuspecting Drivers And Each Other In Brooklyn And Staten Island To Obtain Fraudulent Insurance Payouts

Over $330,000 In Fraudulent Insurance Billing Submitted

Schneiderman: Perpetrators Of This Dangerous Scheme Terrorize Drivers & Sock Consumers With Skyrocketing Premiums

NEW YORK – Attorney General Eric T. Schneiderman today announced the arrests of 16individuals for their roles staging automobile accidents to fraudulently receive insurance payouts. The defendants submitted fraudulent claims totaling more than $330,000 after six staged accidents in which they intentionally crashed into city buses, livery cabs and rented vehicles they drove. The defendants face multiple felony counts of Insurance Fraud, Grand Larceny and Falsifying Business Records. They also face misdemeanor Conspiracy to commit those crimes.

“This all-too-common staged accident scheme puts innocent lives in danger so perpetrators can rip off the system to make a quick buck,” Attorney General Schneiderman said. “Breaking up these criminal operations means safer streets and a fairer market for consumers whose insurance premiums skyrocket as a result of this kind of fraud. My office and our partners in law enforcement will continue to crack down on criminals who terrorize innocent New Yorkers on the road and sock consumers with increased car insurance premiums.”

The complaints filed today charge the defendants with conspiring to create accidents to collect illegal payouts. Some of the defendants allegedly arranged and participated in the accidents and some agreed to be passengers in the vehicles. Five of the accidents occurred in Brooklyn and one on Staten Island between October 2009 and June 2011.

  • On 6/29/11, five defendants boarded a New York City bus driven by an unsuspecting driver. Once the defendants were all on the bus, a rented U-Haul crashed into the busat Ashford Street and New Lots Avenue in Brooklyn. The defendants on the bus then pretended to be injured in the crash.
  • On 5/11/10, the defendants agreed to crash two vehicles into each other, one of which was a rented U-Haul truck. One defendant rented the U-Haul truck and intentionally crashed it into the other vehicle at Dumont Avenue and Grafton Street in Brooklyn. The defendant drivers then pretended to be injured.
  • On 4/25/10, two defendants boarded a New York City bus knowing that arrangements had been made for someone to crash into it. Once the vehicle, a rented U-Haul truck, crashed into the bus, at Hegemon Street and Bristol Avenue in Brooklyn, two defendants pretended they sustained injuries.
  • On 1/25/10, the defendants agreed to crash two private vehicles into each other. One vehicle intentionally struck the other on Blake Avenue between Strauss and Herzl Streets in Brooklyn and the drivers and a passenger then pretended to be injured.
  • On 11/28/09, the defendants conspired to crash a rented vehicle into an unsuspecting livery cab driver. Defendants are a driver and a passenger of a rented Enterprise car that crashed into a livery cab at Park Place and Brooklyn Avenue in Brooklyn. The defendants then pretended to be injured.
  • On 10/29/09, another set of defendants, the driver and a passenger, conspired to crash a van into an unsuspecting livery cab driver. The defendants intentionally reversed into the livery cab at Vanduzer Street and Victory Boulevard on Staten Island and then pretended to be injured.

In New York State, a person injured in a motor vehicle accident is automatically covered by the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the No-Fault law. No-Fault insurance carriers are required to provide reimbursement for a wide range of medical and health services for injuries related to car accidents, up to $50,000 per person. In addition to medical coverage, a victim in a motor vehicle accident may be eligible to recover money from an insurance carrier for a bodily injury lawsuit stemming from injuries resulting from the accident.

Most of the defendants allegedly agreed to participate in the accidents in exchange for money up front and the promise of money from a settlement in a bodily injury lawsuit after they were treated at a Brooklyn medical clinic. These defendants filled out insurance forms that included false information about the accident and the defendants’ purported injuries – including claims of back, head, shoulder and knee pain. The clinics where these defendants were treated then requested, and often received, reimbursement from insurance carriers. Only two of the defendants ended up being awarded money from bodily injury lawsuit settlements – totaling $13,500.

The following defendants are charged with multiple felony counts, including Insurance Fraud in the 2nd and 3rd degrees, Grand Larceny in the 2nd and 3rd degrees, and Falsifying Business Records. They also face misdemeanor Conspiracy charges to commit these crimes:

Defendants involved in the crash on 6/29/2011:

  • Jermain Clarke, 30, of Brooklyn. (Bus passenger)
  • Kevin Evans, 27, of Brooklyn. (Bus passenger)
  • Mosier Jules, 26, of Brooklyn. (Bus passenger)
  • Randolph Millington, 27, of Brooklyn. (Bus passenger)
  • Erving Scott, 30, of Brooklyn. (Bus passenger)

Defendants involved in the crash on 5/11/2010:

  • Troy Hall, 36, of Brooklyn. (Driver)
  • Michael Pugh, 36, of Brooklyn. (U-Haul driver)

Defendants involved in the crash on 4/25/2010:

  • Mayra Oliveras, 33, of Brooklyn. (Bus passenger)
  • Stacia Steele, 21, of Brooklyn. (Bus passenger)

Defendants involved in the crash on 1/25/2010:

  • Douglas Carthen, 69, of Brooklyn. (Driver)
  • Rayvon Kellman, 33, of Queens. (Driver)
  • Stephanie Cabiness, 50, of Brooklyn. (Passenger)

Defendants involved in the crash on 11/28/2009:

  • Kanona Martinez, 41, of Staten Island. (Driver)
  • Kevin Simington, 23, of Brooklyn. (Passenger)

Defendants involved in the crash on 10/29/2009:

  • Michael McAtee, 29, of New York. (Passenger)
  • David Ross, 29, of Binghamton. (Driver)

Each defendant accused of being involved in the 2011 bus crash is charged with the top level insurance fraud and grand larceny charges listed above, among other charges, and faces a maximum of 5 to 15 years behind bars.

All defendants were arraigned in Brooklyn Criminal Court. The defendants submitted a combined total of $331,993.08 in fraudulent claims.

These arrests are the culmination of a joint, ongoing investigation into staged accidents and no-fault insurance fraud by the Office of the Attorney General and the New York City Police Department (NYPD) in conjunction with the New York State Department of Financial Services (DFS). The Attorney General thanks DFS, the NYPD's Fraudulent Accident Investigation Squad and the New York City Transit Authority.

New York City Police Commissioner Raymond W. Kelly said, “More than a dozen subjects in this investigation thought that by staging accidents with U-Hauls and other rented vehicles they could get rich quick. Instead they’re being hauled themselves into court for insurance fraud, a crime that taxes the law-abiding public with higher premiums. I want to commend Attorney General Eric Schneiderman and his team, who together with our detectives, the state Financial Services Department and the Transit Authority brought these cheats to justice.”

Thomas F. Prendergast, MTA New York City Transit President, said, “We commend the efforts of the Attorney General in the pursuit of the outrageous and wasteful conduct outlined in these criminal complaints. This category of insurance fraud serves not only as a substantial and unjustifiable burden upon the public treasury, but it is also a direct threat to the physical safety of our bus customers and bus operators. The detection and deterrence of fraudulent claims has been and remains a significant priority at the MTA and we are pleased that our Special Investigations Unit has been able to assist the New York City Police Department and the Attorney General in the investigation of these activities.”

Benjamin M. Lawsky, Superintendent of Financial Services, said, “Using a staged accident to commit no-fault insurance fraud is a serious crime that needlessly drives up the cost of insurance and potentially endangers the well-being of innocent New Yorkers. The Department of Financial Services is committed to partnering with law enforcement authorities to put an end to crimes like this. The Department commends Attorney General Schneiderman for his role in bringing these defendants to justice.”

This case was investigated by NYPD Detectives Patrick Donohue and Christopher George under the supervision of Lieutenant Edwin Martinez, Captain Donald Boller and Inspector Brian O'Neil. The Attorney General thanks DFS Superintendent Benjamin M. Lawsky, as well as Executive Deputy Superintendent Joy Feigenbaum, Director Frank Orlando and Investigator Arthur Masinksi of DFS's Financial Frauds and Consumer Protection Division. The Attorney General thanks the National Insurance Crime Bureau, Allstate Insurance Company, American Transit Insurance Company, Elco Services, Farmers Insurance Company, Fiduciary Insurance Company, GEICO Insurance Company, Praetorian Insurance, Repwest Insurance Company and U-Haul for their assistance in the investigation.

The case is being prosecuted by Assistant Attorney General Frances Impellizzeri and Senior Investigative Counsel Nina Sas of the Auto Insurance Fraud Unit under the supervision of Deputy Bureau Chief Stephanie Swenton and Bureau Chief Gail Heatherly of the Criminal Prosecutions Bureau and Executive Deputy Attorney General for Criminal Justice Kelly Donovan. Investigators Adrian Klapper, Dennis Laverty and Elsa Rojas, Analysts Danyelle Ritter and Yuriy Kurbatov and Auditor Alex Ozechowski worked on the case under Supervisor Edward Keegan, Deputy Chief Leonard D'Alessandro and Chief Dominick Zarrella of the Investigations Bureau.

The charges against the defendants are accusations and the defendants are presumed innocent until and unless proven guilty.