ALBANY, N.Y., May 7 -- The New York State Senate (majority) issued the following news release:
The New York State Senate passed legislation today to crack down on criminals and scam artists who commit auto insurance fraud that costs New Yorkers billion of dollars in higher insurance premiums, and has caused serious injuries and death to innocent victims.
The bills, sponsored by Senator James Seward (R-C-I, Oneonta), Chairman of the Senate Insurance Committee, and Senate Coalition Co-Leader Dean Skelos, would significantly reduce auto insurance scams by increasing penalties for those who commit or assist in the fraud.
"Auto insurance fraud has become a big business that threatens the safety of motorists, drives up the cost of auto insurance for consumers and hurts our economy," Senator Skelos said. "These bills would make our laws much tougher on rip-off artists who are cashing in on auto fraud. The Senate needs the Assembly to join us in passing these bills so we can stop criminals from stealing money from New Yorkers."
"Comprehensive no-fault insurance reform is critically needed to reduce auto insurance costs, put criminals in jail, and protect drivers from becoming innocent victims," Senator Seward said. "The passage of these bills is essential to give law enforcement the tools they need to prevent and prosecute auto fraud offenders. The Senate has repeatedly recognized the need to address this issue. I hope the Assembly will pass these bills so we can put these criminal enterprises permanently out of business."
It has been almost 11 years since the tragic death of Alice Ross, a 71-year-old wife and grandmother who was killed as the result of a fraud-related, staged auto accident in Queens. One of the criminals drove into her car, causing her to lose control of her vehicle, strike a tree and die.
The Senate today passed "Alice's Law," (S3547 (http://open.nysenate.gov/legislation/bill/S3547-2013)), sponsored by Senator Seward, that would make it a crime to stage a motor vehicle accident with intent to commit insurance fraud. This felony crime would be punishable by up to seven years in prison.
The Senate also approved a bill (S3033 (http://open.nysenate.gov/legislation/bill/S3033-2013)), sponsored by Senator Skelos, that makes it illegal to act as a "runner" who steers accident victims towards crooked doctors who bill Medicaid for unnecessary medical treatments. Runners are key members of auto fraud rings. Under this bill, they could get four years in prison.
Auto insurance fraud is an ongoing crime, with frequent news reports of small and large-scale scam operations that rip-off businesses, consumers and taxpayers. Fraud is a key reason why New Yorkers pay over 50 percent more for auto insurance premiums than drivers in other states.
Three months ago, Maxo Jean of West Hempstead was convicted of staging more than 30 fake car crashes to steal $150,000 in no-fault insurance money. Jean organized crash rings and set up fake accident "victims" to go to corrupt medical clinics and receive bogus treatment.
One year ago, an auto fraud ring was broken up when eight people were arrested in Nassau County and Brooklyn for staging phony accidents, submitting fraudulent injury claims, and ripping off insurance companies for more than $1 million.
In 2012, 36 people were arrested by federal and New York City law enforcement, ending the longest-running auto insurance rip-off scam in history. The scam artists, including doctors, lawyers and patients that faked injuries, stole more than $279 million in accident benefits over five years.
In addition, this week the Senate approved legislation (S2373 (http://open.nysenate.gov/legislation/search?search=S2373)), sponsored by Senator Jeff Klein, that would address cases of auto fraud perpetrated by drivers who deliberately misrepresent where they live, operate a vehicle, or garage their vehicle, in order to obtain lower auto insurance premiums, and shifting higher premiums to honest drivers.
In cases of "rate evasion," offenders falsely state they live in other states or counties that have much lower incidents of motor vehicle theft, car accidents or judgments relegated to motor vehicle accidents, instead of disclosing their true address in high insurance premium areas, such as New York City.