Accident Victim Is Linked to Insurance Fraud Ring : Collisions: A North Hills man killed on the Golden State Freeway is believed to have been a leader of one group of crash-stagers. There have been 20 arrests.

A man killed on the Golden State Freeway last month in what authorities suspect was a deliberate effort to cause an accident between a car and a tractor-trailer is now believed to have been a leader in one of several insurance fraud rings.

During the past two weeks, the Los Angeles County district attorney’s office has filed charges in three other cases that they allege involve the particularly desperate tactic of forcing large trucks to rear-end cars on freeways in an attempt to collect a payment from the truck’s insurer.

In a fifth case, an accident was planned but never carried out, court records indicate, because the organizer became suspicious of undercover officers posing as participants.

Links among the five rings are still being investigated, said Deputy Dist. Atty. Barry Thorpe, one of two prosecutors handling the freeway crash cases. In all, 20 people had been arrested on insurance fraud charges as of Friday and more arrests are expected, Thorpe said.

The accidents under investigation have occurred on the Glendale, San Bernardino, Artesia and Long Beach freeways, in addition to several collisions on the Golden State Freeway. In April, for example, a tractor-trailer northbound on the Long Beach Freeway hit a car that braked to avoid another car that had swerved in front of it.

The typical payout in a staged accident is $20,000, which represents $5,000 medical payments for each of four passengers, said Hal Huber, supervising criminal investigator for the California Department of Insurance. However, investigators said the passengers who risk their lives in the crashes end up with little. Participants in the recent rash of freeway crashes have said they were offered as little as $100 per accident to be passengers.

So far, the only known fatality blamed on allegedly staged accidents was the June 17 death on the Golden State Freeway of Jose Perez, 29, of North Hills. Perez was a passenger in a car that was rear-ended by a car-carrier truck in the Sun Valley area. According to witness accounts, the car was swerving and braking erratically. The car’s driver, Jorge Sanchez, 30, of Los Angeles and two other passengers face murder charges in addition to fraud charges.

From interviews with participants in the staged accidents, authorities believe Perez was a leader in one of the rings.

Thorpe speculated that crash-stagers, who have been active for years throughout Southern California, have moved their activities from streets to freeways in the belief that insurance companies pay more for freeway crashes. Possibly that’s because the companies take such crashes more seriously, Thorpe said.

He added that a notebook seized from one organizer--sometimes known as a “capper”--indicated he anticipated higher payouts from truck insurance companies than from auto insurers. Commercial trucks are considered more likely to be insured than the average auto driver, Thorpe said.

Even though the risk of injury is far greater in a freeway truck wreck than in the more common fender-benders staged on city streets, Thorpe said, the recruiters are able to find plenty of willing participants among poor immigrants, some of whom are recruited right off the street. The latest series of fraud rings has relied exclusively on Latino immigrants, according to court records.

“Sure, there are people who were injured and in this case someone was killed, but there are a lot more people out there walking around with money,” he said.

Although staging crashes with trucks on freeways represents a sharp escalation in danger, the practice of faking accidents to win money has been around for years. A recent insurance industry study concluded that 20% to 25% of the 570,000 accidents reported in California annually are staged, said Mary Crystal, spokeswoman for the Western Insurance Industry Service.

One Los Angeles-based ring that police broke up in 1991 was blamed for staging 1,500 accidents in a two-year period, prosecutors say. Most of those were minor accidents and in many instances the crashes occurred only on paper.

Experts disagree on the exact dollar loss attributable to fake accidents, Crystal said. But she said that nationwide, 15% of each insurance premium dollar goes toward fraudulent claims--including exaggerated claims stemming from actual accidents. Staged accidents are said to represent about 20% of that loss.

Dist. Atty. Ira Reiner, whose office prosecutes most such cases in Los Angeles County, called it an “epidemic that seems to be growing worse.” As for the new wave of staged freeway crashes, Reiner said it was a “mystery to me how they can get people to do this. I’m sure the risks are understated to the participants.”

Huber of the Department of Insurance said that like the Latinos who appear to have formed the freeway crash rings, participants in other staged-accident rings tend to be from a single ethnic or racial group.

He said that in Los Angeles County, investigators have previously uncovered rings formed by Latinos, African-Americans, Korean-Americans and Armenian-Americans. In Orange County, staged-crash rings have been formed by Vietnamese and Filipino immigrants.

He and other experts speculated that ethnic and racial groups tend to join together in such frauds because of the level of trust needed when large numbers of conspirators are involved.

Another factor might be that the only people willing to be crash-car passengers are the very poor, such as recent immigrants who speak little English and can communicate only with their countrymen, Huber said.

Suspected Fraud Cases

Among the findings in the ongoing investigation conducted by the California Highway Patrol and the Los Angeles County district attorney into auto insurance fraud are the following:

Jan. 21--The driver of a double-cab pickup on the San Bernardino Freeway was distracted by a car driving erratically to his left. When he turned his attention back to his own lane, the car in front of him had stopped dead and he rear-ended it. The accident was identified as a suspected fraud after authorities examined the driving record of a man arrested later in a similar incident.

March 18--The driver of a 1990 Freightliner truck traveling on the Artesia Freeway ran into a car that had braked to avoid a second car stopped in front of it. In April, an informant told police he had been recruited as a passenger by a South Gate man.

March 23--A tractor-trailer driver northbound on the Long Beach Freeway hit a blue Subaru after another car made an abrupt lane change in front of it. The front car quickly exited the freeway. Ten people have been arrested and charged with insurance fraud in connection with the incident.

June 3--A police informant met with two members of a fraud ring at a mini-mart near downtown Los Angeles. The informant was told of an accident to be staged that was to involve three or four cars and a truck chosen at random. Those planning the crash became suspicious about the informant and called it off. One man was arrested, another is being sought.

June 17--The driver of a northbound car-carrier truck was three to four car lengths behind a black Pontiac that slowed and began swerving. A second car pulled in front of the Pontiac, which then stopped. The truck hit the car, killing passenger Jose Perez. The driver and passengers of the rear-ended car were arrested on suspicion of murder and insurance fraud.

June 24--A police informant and two undercover officers met with a crash organizer in a Los Angeles motel. The plan was that one car would swerve, one would brake and a third would drive to the truck’s left to prevent it from changing lanes. The recruiter told the officers “to wait for the police to come and take a report to claim back and neck injuries.” Five people were arrested before the planned accident could occur.

SOURCE: California Highway Patrol and Los Angeles County district attorney