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Tuesday, 13 May 2008 10:21

‘Operation Bumper Cars’: Collision Fraud Schemes in Texas

Swoop-and-Squat Just One of the Organized Crash Scams in Collision and Medical Fraud

The FBI calls it “Operation Bumper Cars” and Dallas FBI agents have been infiltrating staged car accident conspiracy rings which they perceive to be a resurgent problem in North Texas, particularly for medical insurance fraud.

Staged “bumper car” accidents are not new but are getting more common. The National Insurance Crime Bureau statistics show that since 2001 there have been nearly 350 staged car accident schemes in North Texas alone.

A judge recently sentenced one scheme participant to 2-1/2 years in federal prison. He’s one of 22 people indicted in the Dallas area scheme that FBI and IRS agents broke up last year, where insurance companies were bilked for approximately a million dollars.

Dallas FBI Assistant Special Agent in Charge Mike Anderson said recruiters will find people to intentionally crash or damage their cars. Then they work with chiropractors and law firms to file the bogus insurance claims. They all share money received from insurance companies. “Unfortunately, law firms have had a history engaging in this type of practice, taking more of a willful blindness position,” said Anderson.

In the past, complex organized auto fraud rings have made medical claims involving hundreds of participants, including lawyers, doctors, chiropractors, auto shops, tow truck operators, ambulance drivers, police officers and insurance company employees.

A spokesman for Allstate Insurance told CBS News that auto insurance premiums cost customers $300 more a year just to cover the costs of fraud. “That should make us all mad,” says Bill Mellander of Allstate Insurance. An even more expensive component for insurers are faked medical claims resulting from the staged accident. Mellander added “there’ll be people waiting at the intersection and when there was be one person [alone] driving a car all of a sudden there are up to 10 people inside a small car [faking injury]. It sounds crazy but it’s true. It happens.”

In general “bumper car” schemes are in four general categories. In the now notorious swoop-and-squat maneuver, two vehicles work as a team to set up an accident. One vehicle pulls in front of an innocent driver and the other alongside, blocking the victim in. The lead car stops short, causing the victim to rear-end him. The car that pulled up alongside serves as a block and prevents the victim from avoiding a collision.

A variant is more subtle. A car swoops in front of an accomplice who is followed by an unsuspecting driver at speed and slams on its breaks, “forcing” the accomplice to break suddenly and encouraging the innocent driver  to crash into the accomplice’s rear. The swooper then drives away leaving the accomplice with a whiplash claim. It’s been a collision responsibility axiom that you can’t be at fault if you’re hit from behind, unless of course you’re backing up at speed, but that’s not the case here.

Allstate has described additional schemes and scams on their website:

Drive Down: As an innocent driver tries to merge into traffic, the suspect driver yields, waving on the other driver. As this innocent driver merges, the suspect driver intentionally collides with the victim and denies giving him the right of way.

Start and Stop: Stopped in the same lane of traffic, the suspect’s vehicle is positioned directly in front of the victim. The suspect starts to move forward as does the innocent driver. For no reason, the suspect vehicle suddenly stops short, causing the victim to rear-end him.

Sideswiping in a Two-Lane Turn: At an intersection that has two left turn lanes, the suspect crosses the center-line, intentionally sideswiping the victim’s car. The suspect then alleges that the victim caused the collision by entering his lane.

An internet “scam busting” site,, reports that these scams can impact drivers in at least three insidious ways:

“Victims have been injured, terrorized, and even killed. A 71-year-old grandmother was killed in Bayside, NY, and an entire family (including a baby) was killed when one of these staged accidents went wrong.

“Victims’ insurance rates often rise— often by hundreds of dollars—because of a costly claim on the driver’s record. Sometimes, an auto policy may not even be renewed.

Victims waste a lot of time dealing with police reports, car repairs, claim settlements, and sometimes lawsuits.”

The insurance industry’s own polling shows that the number of Americans who think it’s acceptable to bilk insurance companies now totals close to one in five Americans. Former California Insurance Commissioner John Garamendi said staged accidents in California cost $1.5 billion to $2 billion a year in insurance payouts. The insurance industry sets the national figure for auto insurance fraud losses at approximately $10 billion.

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