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Gangs the driving force behind insurance fraud, police say

GTA anti-fraud squads kept hopping with investigations

Published April 12, 2013

Forget about any preconceived notion you might have about auto insurance fraud.

It’s not the motorist torching his car for the insurance — although that still happens on occasion. No, it’s far more elaborate.

“It’s not individuals trying to defraud insurance companies,” says Peel Regional Police Det. Robert Lusty, whose team investigates all types of frauds.

“What you have is organized criminal gangs.”

One of the Peel team’s projects involved looking at hundreds of collisions in which insurance companies were defrauded of anywhere from $50,000 to $100,000 per person.

“That’s a lot of money,” he said.

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Lusty said a typical case may involve two old vehicles with six or more men in each crashing into each other. At that point, systematic defrauding begins. One such case involved everyone from a Peel Region officer to tow-truck drivers, auto-body shops, paralegals and physical therapy clinics.

“They are all taking their slice,” Lusty said.

Auto insurance fraud is not particular to Peel Region — although it is particularly bad in Brampton. It is a serious problem throughout the Greater Toronto Area, a problem that the province and the insurance industry are struggling to contain.

OPP Det. Staff Sgt. Tom Whittaker said auto insurance fraud has been in the public’s eye for the last two or three years and was focused even more with last year’s release of the Auto Insurance Anti-Fraud Task Force final report.

“Ultimately, the victim is the person paying their insurance premium,” Whittaker said, adding there is no question this type of fraud is more “prevalent.”

Lusty said auto insurance fraud four or five years ago was a significant problem in the northern United States but when legislation was passed to crack down on it, the bad guys looked for greener pastures — Ontario.

Lusty said the person at the centre of the ring recruits people, who need money, to act as passengers. And then there may be as many as 12 or 13 people in one accident all making an injury claim. And so it begins.

“We are clamping down on that,” he said. “We are doing a fair amount of education with our front line people to be able to identify (a possible fraud) when they go to an accident scene. Thirteen people in an accident just never happens in the GTA, so it is very obvious.”

Lusty said an officer will start by separating the passengers and asking them how they know the driver or the other people in the car.

“Invariably they don’t know who the driver is. They don’t have a relationship with them. They don’t know the other people in the car. They have been placed in the car for a specific reason and that is to defraud the insurance companies,” the detective said.

Lusty said now that the fraud artists know police are onto that particular scheme, they are buying old cars and just driving them into unsuspecting motorists.

“They have got five guys in the car and they will drive into the back of you or they will drive into the side of you. You’re injured but they are injured as well. It’s harder to say this is staged because it is an actual citizen who knows nothing about it,” he said.

“For your readers, they should be very cognizant of the fact . . . they may be a target for someone who is involved in a ring and is staging a collision with them.”

Lusty said physical therapy clinics in every second strip mall are “rife” for insurance fraud.

In February 2012, Project Whiplash, a joint task force with Toronto Police, the Insurance Bureau of Canada and the Financial Services Commission of Ontario, uncovered a multimillion dollar fraud ring operating primarily in one of the GTA’s minority communities.

That led to the arrest of 37 people and 30 charges as a result of 77 “staged” collisions.

Lusty said Peel Regional Police are dealing almost daily with these types of frauds and “it’s trending … but we can’t do it alone as police officers.”

Richard J. Brennan

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