Auto insurance fraud has been a major problem in the state of New York. For years, regulators and lawmakers have been working to combat fraud throughout the state, but it has been a difficult challenge to overcome. This week, regulators have claimed a major victory as state and federal authorities dismantled a massive auto insurance fraud ring. Regulators are calling it the largest insurance fraud syndicate that focused almost exclusively on exploiting New York’s no-fault insurance laws.
The crime ring is comprised of 36 people in total. Ten doctors and three attorneys were deeply involved with the ring and were part of its pervasive success. Federal prosecutors accuse the ring, as a whole, of causing more than $250 million in financial damages due to fraudulent claims. Regulators are continuing to investigate the matter, hoping to uncover any further financial damages that have been wrought by the syndicate.
Regulators note that one of the reasons the ring was so successful was because it recruited actual victims of car crashes at clinics. The doctors involved with the ring would conduct extensive unnecessary treatments and produce fictional insurance claims that would then be filed to insurers. According to New York law, insurers are liable to pay up to $50,000 in benefits for all people involved in an auto accident no matter where the blame may lie.
Legislators have taken a keen interest in the recent development and may finally have found the encouragement necessary to make changes to the state’s law in an effort to combat fraud.
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