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As rings go, this was a giant. An estimated 1,000 people participated more than one percent of the city’s adult residents. A staggering $50 million may have been paid to individuals involved in this enterprise, suspected to be the nation’s largest staged auto accident ring.
The Camden Fire Insurance Company and the Maryland Insurance Group are fighting back. Each has filed civil lawsuits against hundreds of suspected participants in the scams. Both suits are based on New Jersey’s Fraud Prevention Act, which allows insurers to challenge suspected fraud claims before making payment and then seek triple legal fees and payment for investigative costs.
In many cases, the abuses were blatant. One defendant pressed claims from six fender benders in a period of three months. Another individual made claims for nine accidents in only four months. Yet another individual bought multiple policies and filed claims with each carrier for the same staged accidents. The ring activities generally involved two car accidents and a total of eight people between the two vehicles. In some cases, however, as many as 15 people were supposedly involved in a single two car accident. The Camden suit alleges that a single group of individuals orchestrated 126 accidents over an 18 month period. Maryland’s suit, a 102 count, 137 pager, mirrors the allegations and accuses many of the same defendants with staging 31 accidents during 1995 and 1996. The suit seeks to have the court block all lawsuits and mandatory arbitration proceedings related to the 31 suspect accidents.
Due to the massive problems in the Garden State’s present insurance system, lawmakers are being asked to review the situation and come up with a legislative package to close the loopholes that currently permit such flagrant abuse.
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