Car Crash Ring Prosecutions Near End; Man Pleads Guilty, Wife Awaiting Trial

A guilty plea by a principal in a sophisticated ring that staged auto accidents is bringing to a close prosecution of what federal officials have called the biggest auto insurance fraud operation uncovered in Southern California.

Gregory Benson, 41, and his wife, Vida, 33, were the last of the 15 people indicted in July, 1984, to be brought before a federal court judge for resolution of the case.

Benson entered his guilty plea to two counts of conspiracy and mail fraud before U. S. District Judge Edward Rafeedie July 29. He will be sentenced Aug. 27.

His wife was arraigned Friday afternoon on one count of conspiracy to commit mail fraud and 24 counts of mail fraud. Her trial was set for Sept. 17.

Of the other 13, all but one entered guilty pleas or were convicted. The exception, a Pasadena lawyer accused of filing phony insurance claims for accident “victims,” was acquitted by a jury.

Benson and his wife, formerly of Long Beach, were fugitives for almost a year, until their arrests last month.

Benson was the ring’s primary driver--known as a “cracker” or “hitter” in the group’s code--and a trainer of other drivers in the ring, according to Assistant U.S. Atty. Terree A. Bowers. Benson’s wife was a receptionist at one of several therapy centers operated to treat the “injured,” Bowers said.

Operating out of therapy clinics and medical centers where accident participants were sent for “treatment,” the ring filed hundreds of phony insurance claims through the mails, “probably amounting to millions of dollars over the life span of the operation,” Bowers said.

The case was unusual in that the government had been able to convict participants at all levels of the operation, including a doctor and a chiropractor, Bowers said.

Bowers said authorities have indicated that there was a drop in fraud claims locally after the breakup of the ring.

Secret Service agents stumbled onto the ring in the course of investigating a suspected counterfeiting operation in 1983. They were getting ready to arrest a Long Beach man for selling phony $20 bills when they overheard talk about staging accidents while eavesdropping on wiretapped telephone conversations.

The Secret Service tipped the U.S. attorney’s office and U.S. postal inspectors to the auto fraud. Two postal inspectors managed to infiltrate the ring and went through the whole process of participating in a staged accident, going for “therapy” and filing a phony auto insurance claim.

Bowers said the operation was very well organized and was “run like a business.” A well-developed code was devised for telephone usage and security purposes. Sometimes at chosen staging sites, participants used walkie-talkies to coordinate an accident before its occurrence, Bowers said.

Sometimes they would run into each other, Bower said, and sometimes they would stage a hit-and-run or involve buses or cars driven by unwary, innocent motorists.

Benson, in his July 29 court appearance, said, “The driver had the responsibility to make the accident look like a good case.”

Sometimes this was done by “finding someone driving along, making an illegal turn, that sort of thing.”

Benson said he had participated in “quite a few” staged accidents, either as the driver or a “supervisor . . . at the scene to see that everybody carried out their function.”

The purported mastermind of the staged accident ring, Julian Johnson, 33, of Compton--also known as Zaafir Saafir--supervised the recruitment and training of hundreds of people to participate in phony accidents, Bowers said.

He also allegedly fielded insurance claims through a Pasadena law office operated by Atty. James C. Williams. Williams was the only one of the indicted who was acquitted after a jury trial.

Johnson pleaded guilty to four counts of mail fraud and was sentenced to five years in prison, plus five years probation. For his part in the counterfeiting case, he was sentenced to one year and one day in prison.

Three-Year Term

Johnson’s “right-hand man,” Ronald Burton of Compton, was convicted by Rafeedie on conspiracy and mail fraud counts and sentenced to three years in prison.

A Hawthorne chiropractor, Jesus Dominguez, 64, and a Redondo Beach physician, Dr. Elroy Tatge, pleaded guilty to charges related to fraudulent claims. Dominguez was given a one-year prison sentence and Tatge was placed on three years’ probation and fined $2,500, with an order to perform 500 hours of community service.

The man the Secret Service was getting ready to pounce on in 1983 for passing phony $20 bills turned out to be one of the relatively minor figures in the accident ring. Craig Howard, 28, pleaded guilty to two counterfeiting counts and two counts of mail fraud. He was placed on five years’ probation, fined $2,500 and ordered to complete 300 hours of community service.