Staged-Wreck Fraud Thrives in Auto-Rich L.A. Suburbs
Climbing into her late-model Lincoln Continental, Joan S. (last names are not used in this story) pulled out of a parking lot on Century Boulevard near Los Angeles International Airport, as she did every day when leaving work. Carefully nosing out onto the congested street, she prepared to make a right-hand turn when she struck an on-coming Ford carrying three people.
Damage was minor, and the driver of the Ford assured Joan there was no problem and no need to call the police. Relieved, she exchanged information with the driver and sped away.
Two days later, a female co-worker of Joan’s pulled out of the same lot, and while attempting to make the same turn, clipped an on-coming car carrying several people. She, too, was told by the driver whose car she hit, “not to worry about it.”
Weeks later, both women received ominous-sounding letters from the same attorney, advising them that his clients suffered numerous physical injuries in the two accidents and that medical bills would be forthcoming.
Shaken, the two women later discovered they were the victims of staged auto accidents--in which skilled drivers carefully maneuver themselves into a position where the victim cannot help but hit them. The industry is one that experts say cost Southern California motorists an estimated $200 million yearly in the form of increased premiums.
Preferred Area
Because many affluent, hence well-insured, motorists are drawn to the beach cities, Los Angeles International Airport and numerous shopping malls, the South Bay, experts say, is becoming a preferred area for such staged accidents.
“The favorite target of these auto accident stagers is a woman driving alone in a late model car, or commercial vehicles that are likely to carry good, high-limit insurance,” according to Rick Dinon, a training manager at 20th Century Insurance Co., who conducts seminars on spotting staged accidents.
“This makes the South Bay very attractive to stagers. Hawthorne Boulevard is a stager’s dream come true,” Dinon said. “You’ve got a wide street, well-traveled, with lots of malls and shops that attract affluent consumers driving nice cars.” Pacific Coast Highway, with its shops and proximity to the beaches, is another likely spot, he said, as is Prairie Avenue, with its large amount of commercial traffic. Other favored areas include Beverly Hills, Hollywood and Westwood.
In a seminar for the South Bay chapter of Professional Insurance Agents, Dinon described the tactics used by professional auto accident stagers.
‘Swoop and Squat’
One of the most common ploys is termed, in street parlance, “swoop and squat.”
In “swoop and squat,” Dinon said, stagers typically use a large, older car with existing damage (from previously staged accidents) to act as the squat, or crash car. Piling in up to four or five passengers, the driver begins cruising a well-traveled street, looking for a likely victim.
“This could happen to you as you leave here today,” Dinon said, “and if it’s done correctly, you’ll never guess you were the victim of a staged accident. You’re driving down Pacific Coast Highway when the driver of the squat car positions himself in front of you. Imperceptibly, he narrows the space between your car and his until there’s maybe less than half a car length between you.
“Meanwhile, the swoop car is waiting in the next lane to make its move. On a prearranged signal, it cuts abruptly in front of the squat car. That car’s driver slams on the brakes, and you rear-end him. He gets out and says, ‘Did you see that guy cut me off? I had to stop like that.’ ”
Above all, Dinon said, “swoop and squat” is subtle.
“You’ll never see these guys falling out of the car clutching their necks, moaning about whiplash,” he said. “They’ll never start screaming at you or threaten to punch you out for hitting them. They don’t want to cause a scene and they don’t want to attract the police. One of the occupants often will get out to re-direct traffic. What they’re really doing is re-directing potential witnesses. If you insist on calling the police, one of them will offer to call while you’re busy exchanging information with the other driver. Don’t you believe it.”
Soft-Tissue Injuries
Weeks later, Dinon said, all the occupants in the car will file for so-called soft-tissue injuries, such as whiplash and back injuries, which are difficult to disprove.
“Don’t think you’ll get socked with some $100,000 claim, either,” he said. “They don’t want to arouse suspicion. Everything about staged accidents is strictly routine--routine accidents, routine claims, everything by the book.”
In most cases, he said, stagers operate in a ring that includes crooked doctors, lawyers and chiropractors at the top, to make sure that medical reports are correct and verifiable, and that the proper legal steps are taken.
Another common method of auto insurance fraud, Dinon said, is the “paper accident,” in which people posing as victims file claims for accidents that never occurred.
Driving their cars into telephone poles or brick walls, or battering them with sledge hammers, stagers with insurance policies then file claims for auto body damage and nonexistent injuries. Because of a state mandate, Dinon said, insurance companies must maintain an assigned risk pool to insure drivers with poor records.
According to Ronald E. Warthen, supervising investigator for the state Department of Insurance Fraud Bureau, some rings approach an almost “paramilitary” level of organization.
“We’ve found rings that involve up to 75, 100 people. They have professional training manuals, driving classes that teach the finer points of staging accidents. They work in shifts, with designated territories. They even have quotas to meet.” One such ring, he said, was found to be raking in as much as $170,000 a week from fraudulent auto insurance claims.”
Dinon, whose company operates a unit that investigates suspected staged accidents, said the driving skills of stagers in such rings often rival those of professional stunt car drivers.
“As a rule, these people don’t drink or take drugs--at least not while they’re staging accidents--and they have clean driving records. They have to be good enough drivers to orchestrate an accident without really hurting anyone and without incapacitating their own car. They don’t really care what happens to yours.
Only Takes an Instant
“These people are so good,” he said, “that you can be backing out of your driveway, or a supermarket parking space, and in the instant you turn your eyes from the rear view to check your front end, they zoom in behind you, and bam! You hit them.”
Although specific figures for the South Bay are not available, Warthen said the bureau receives 175 to 200 suspected fraudulent auto insurance claims a month, most of which come out of the Los Angeles area, including the South Bay.
According to Wally Rodgers, of the Insurance Crime Prevention Institute in El Monte, 30 to 40% of all auto accident claims in Southern California are suspected to be fraudulent.
