Medical payments under New York’s no-fault’s PIP, or personal injury protection, the coverage part that pays for medical care and other benefits if the policyholder has an auto accident, are rising dramatically, in part due to fraud and abuse. PIP average claims costs in the third quarter of 2010 stood at $8,776, the third highest in the country, the first being Michigan and the second being New Jersey. From the end of 2004 to the third quarter 2010, claims costs rose an astounding 49.5 percent. No-fault fraud and abuse cost consumers and insurers about $241 million in 2010, a cost that was imposed on all drivers in the form of higher premiums.

Insurance industry studies indicate 10 percent or more of property/casualty insurance claims are fraudulent. And fraud is the second most costly white-collar crime in America behind tax evasion. Add it all up and insurance fraud costs Americans billions of dollars each year. Not only does fraud cause higher insurance rates, but it also raises our taxes and inflates prices for consumer goods.

Auto insurance fraud is one of the fastest growing crimes in New York. It has cost New York drivers an estimated $1 billion in higher auto insurance premiums over the past five years alone – and in some cases their lives. New York drivers are now paying 53% more than the average American for auto insurance.

Trial lawyers make money off these cases, and the New York State Trial Lawyer Association has repeatedly refused to estimate how much its members are making from them. The trail lawyers have for years blocked sensible reform legislation that would close the loopholes in the state’s no-fault insurance laws that permit widespread auto insurance fraud in the state.

“What are we waiting for in New York?, asked NYSAIF spokesman and former Kings County Assistant District Attorney David Schwartz. “Tomorrow is the anniversary of the murder of a 71-year-old Queens grandmother from a staged auto accident; swastikas were painted on Midwood cars earlier this year to masque auto fraud, and now a $275 million ring has been uncovered – and that’s just the tip of the iceberg. When is this state going to seriously address this massive and growing criminal activity?”

Law enforcement officials around the state – including each of the five New York City district attorneys – have called for new laws to crack down on auto insurance fraud in New York.

Contact: Pattie Haubner, 212-938-0005

New York – Jan. 27…Staged car accidents and other auto insurance scams have become a “cottage industry” in states like New York and Florida, with organized criminal gangs and crooked medical facilities bilking hundreds of millions of dollars from insurance companies and hiking rates for innocent drivers. The problem is outlined in this television report released last night from CBS News.

Florida is advancing legislation to crack down on these scammers – who have murdered innocent victims preyed upon in staged accidents – but no progress has occurred in New York, where trial lawyers, who profit off auto accidents, have lobbied to prevent reform, the group New Yorkers Stand Against Auto Insurance Fraud (NYSAIF) today charged. Every single New York City District Attorney has asked for new laws to crack down on the dangerous and costly crime epidemic, which has cost New York drivers an estimated $1 billion in higher auto premiums over the past five years. But still, legislation to give law enforcement officers the tools they need to crack down on this crime wave remain holed up in committees, where they have sat for years.

NYSAIF is urging Governor Andrew Cuomo and New York lawmakers to immediately address the crisis to protect citizens from harm and to break up organized criminal enterprises that are growing larger each year. There is no law in New York State expressly forbidding staged auto accidents.

“Criminals are making a mockery of our laws in New York, people are getting hurt, and nothing is being done about it,” said former Kings County Assistant District Attorney and NYSAIF spokesman David Schwartz. “New Yorkers pay 53% more in auto insurance premiums on average than drivers in other states, largely because of staged accidents and other auto insurance scams. In some cases, civilians have been killed. It’s insanity. Something has got to get done this year.”

New York, Jan.17…A nefarious – and pointedly obnoxious – cartoon character called “Frankie the Fraudster” was today named a 2012 spokesman for New Yorkers Stand Against Insurance Fraud (NYSAIF), an organization of drivers fighting rampant auto insurance fraud in the Empire State. The so-called “Fraud Tax” has cost New Yorkers more than $1 billion in higher auto premiums over the past five years. Drivers here pay 53% more for auto insurance on average than other Americans.

“Frankie the Fraudster” personifies the thousands of criminals at work every day, crashing into innocent drivers and running up fraudulent medical bills as a way to scam New York’s loophole-ridden “No Fault Insurance” system. Recent surveillance video of “Frankie the Fraudster” is available here.

Legislation to crack down on organized criminal enterprises scamming New York’s no-fault system has widespread support, especially among law enforcement authorities. Each of the five New York City district attorneys supports legislation in Albany to address auto insurance scams, but the bills never make it to the floor, thanks largely to the efforts of the New York Trial Lawyer Association which actively works to block them each year. The New York Trial Lawyer Association has repeatedly refused to provide estimates on how much its members have profited from New York’s broken system.

“This is a real honor,” Frankie the Fraudster said of his appointment. “After working in the shadows ripping off New Yorkers for years, I am finally getting my moment in the sun. I can’t wait to wrap my arms around the first New York Trial lawyer I see and never let go. I may just about have a heart attack when I begin attending their events!”

NYSAIF also announced that it will roll out a full-sized “Frankie the Fraudster” character who will visit the hallways of Albany throughout the year and visit as many New York State Trial Lawyer Association events as possible to thank its members for keeping New York’s laws weak.

“NYSAIF created this character to draw public attention to one of the greatest criminal rip-offs in New York State history,” said NYSAIF counsel and former Brooklyn Assistant District Attorney David Schwartz. “Frankie the Fraudster may elicit some smiles, but at the end of the day, there is nothing funny about the Fraud Tax in New York. We will continue to urge the New York Trial Lawyers Association –through all means at our disposal – to join with us in finding a workable solution to the auto insurance crisis in our state.”

The latest high-profile insurance scam involved bogus anti-Semitic attacks on Midwood, Brooklyn automobiles.

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Press Contact: Bill O’Reilly, 212-396-9117

When the car crashes were through, the suspects called the police to have accident reports logged. They all sought $39,000 worth of medical treatment for various injuries they claimed to have suffered.

A Bronx driver reaped an insurance windfall by pretending he was involved in a wreck between a tractor-trailer and a car near the Triborough Bridge — but surveillance video caught him in his lie, police said yesterday.

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After this truck overturns, a man pulls up, gets out of his car, and appears to help the drivers involved in the accident. The police say he later filed false insurance claims for damages and injuries to him and his car.

“About one in five no-fault claims in the New York City area shows evidence of fraud,” said Robert Hartwig of the Insurance Information Institute. “In other words, the claim itself may have been entirely contrived. In New York state alone we are looking at a quarter of a billion dollars in no-fault fraud.” And according to Hartwig, regular law-abiding drivers are paying the price.

As New York’s average no-fault claim is 56% higher than the national median of$5,135, it is clear that we need to take positive steps to address this issue. As you know, auto insurance fraud is a prime reason that New Yorkers pay some of the highest premiums in the nation, 54% more on average than drivers in other states.

While the State Department of Financial Services has unde1iaken some positive regulatory efforts to crack down on deceptive practices and unscrupulous medical providers in the no-fault system, more needs to be done legislatively. I have supported, and will continue to support, the bills you highlighted and, as you are aware, I voted in favor of A.1 0784 when it passed the Assembly in June.

I am also a co-sponsor of Assembly Bill A.5200, omnibus legislation on no-fault fraud, which, if enacted, would address many of the concerns that have been raised on this topic. I invite you to review this legislation and lend your support in our efforts to address this important issue.

I look forward to working with you and the coalition, New Yorkers Stand Against Insurance Fraud, to enact meaningful no-fault fraud reform.

“Staged auto accidents are serious. They inflict physical and economic harm — and, in the case of my constituent, Alice Ross, death. My bill sends a clear message to the crooks roving our streets and highways in search of a pay day at our expense, that these shenanigans will not be tolerated. Thanks to “Alice’s Law” we now have a mechanism in place to charge these unscrupulous individuals and send them to prison.”