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State Cracks Down on Auto Insurance Fraud

By Mark Scott

Buffalo, NY – The state's latest crackdown on automobile insurance fraud has resulted in the arrests of 25 people across upstate New York. Six of the arrests were made in the Buffalo area.

New York Attorney General Eliot Spitzer and State Insurance Commissioner Gregory Serio say many of the scams involved the filing of false claims and the staging of accidents.

Spitzer's spokesman Paul Larrabee said the 25 cases were investigated by the state Automobile Insurance Fraud Unit within the AG's office. He said eight have resulted in guilty pleas by defendants. Larrabee said some of the schemes were "brazen" while others were less so.

"We saw from Buffalo to Ulster County individuals who are trying to scam the system," Larrabee said. "The Attorney General said very clearly he is not going to stand for it and that he's is going to prosecute cases irrespective of size."

In Buffalo, two men were arrested for their alleged participation in a staged accident in which they tried to claim nearly $30,000 in damages. Another Buffalo man is accused of coordinating the "arranged thefts" of vehicles that lead to significant claims from insurance carriers. Larrabee says the cost of insurance fraud in New York is high.

"These cases easily amounted into the hundreds of thousands of dollars," Larrabee said. "There are estimates that total fraud in New York is in the hundreds of millions of dollars range."

Those costs, says Larrabee, help make New York the second most expensive state in which to buy auto insurance, behind only New Jersey. But he says aggressive action against auto insurance scammers should ultimately result in lower premiums.