Lawyer’s Drive for Success Is Measured in Fraud Case : Insurance: Two faces are painted of a successful Encino attorney who has been accused of masterminding staged freeway crashes, one of which ended in a death.

There are two faces of attorney Gary P. Miller.

One is that of a 44-year-old Encino family man and hard-working personal injury attorney, who was just beginning to enjoy financial success after years of struggling.

The other is that of a mid-Wilshire lawyer charged with second-degree murder for allegedly masterminding a staged freeway wreck near Sun Valley in which an El Salvadoran immigrant was accidentally crushed to death by a car-carrier truck.

Miller is believed to be the first attorney ever charged with murder in an insurance fraud case, which makes proving that he was directly responsible for the fatal June 17 wreck a challenging task for prosecutors.

Investigators in the case allege--through legal documents, court testimony and interviews--that the two faces of Miller are not contradictory. They say that his desire to become well-to-do may have coaxed his dive into illegal waters.

His defense attorney, Alan Baum, maintains that the two views of Miller are so divergent that one of them must be erroneous. He portrays Miller largely as an unknowing victim of the personal injury law business, a business that he says is hectic and riddled with fraud.

“Maybe they have evidence that people have admitted they staged accidents, but there’s no evidence that they ever told Mr. Miller that,” Baum said during a series of bail hearings, which concluded last week with a $1-million bail set for Miller.

During the hearings, each side seized on many of the same facts, but gave them a vastly different spin. Which interpretation is most believable will ultimately be determined in Los Angeles County Superior Court, where pretrial hearings continue this week.

Already, the case promises to feature emotional testimony, secret tape recordings and complicated maps and charts. The bail hearing was dutifully attended by a dozen of Miller’s friends, co-workers and family members--including his visibly distraught wife, Heidi, a Hollywood press agent.

When Deputy Dist. Atty. Barry Gene Thorpe grilled Heidi Miller about a personal loan used to help buy their house and mentioned that he believed Miller could be a flight risk if bail were set too low because he might have access to the wealth of his in-laws, many in the audience shook their heads in disgust.

But they remained impassive when Thorpe detailed two bits of independent evidence against Miller: The State Bar of California is conducting two investigations of his practice, both of which Thorpe says involve allegedly set-up accidents; and the state Department of Insurance has received 55 complaints against Miller since 1987, all from insurance companies suspecting fraud.

Miller, a native of New Jersey who attended a military academy for high school, received his law degree in 1976 from the now defunct Mid-Valley College of Law, according to the State Bar. In documents filed with the court, he said he worked for a defense firm, a personal injury firm and as in-house counsel for a vehicle manufacturer before opening a solo practice in 1983.

In 1984, he married Heidi Schaeffer, whose parents owned a Hollywood camera store, and the two had a daughter 2 1/2 years ago. In a letter to the court pleading for a low bail, Miller said he had become so close to his in-laws that they had family dinners every Sunday and his mother-in-law worked part time in his office.

“I am truly a lucky man,” he said.

Heidi Miller testified last week that gross income from Miller’s law practice jumped nearly fivefold in two years--from $347,000 a year in 1989 to $1.64 million in 1991. She and defense attorney Baum attributed that leap to a growing business and several large settlements in long-term cases.

“He had more referrals,” Heidi Miller said. “There were just more people out there.”

Thorpe believes the rapid increase in money flowing through his practice may have had more to do with Miller’s growing involvement with auto wreck stagers, known as “cappers.” Investigators believe cappers work directly with attorneys to stage accidents, sometimes recruiting people off the street shortly before the wreck for $100 or less. Following the crash, they say the attorney files medical and liability insurance claims of $1,000 or more per passenger, usually against the only truly innocent victim--the driver of the vehicle that rear-ended the capper-sponsored car.

Staged accidents with cars on surface streets have become relatively common in Southern California, but the escalation to the freeways and to tractor-trailer trucks is viewed by investigators as particularly desperate and dangerous. More than 100 “swoop-and-squat” wrecks in front of trucks are believed to have taken place on Los Angeles freeways in the past year or so.

Investigators in the Miller case say they have linked at least eight suspected fake accidents to Miller’s office. Four besides the fatal accident involved rear-end wrecks with large trucks on the Golden State Freeway. Two others are thought to have been similar “swoop-and-squat” crashes in front of cars, one on the Ventura Freeway and one on a surface street.

But Miller did not become the target of the fatal accident investigation until more than a week after it happened. At first, all that was known for sure was that a car had swerved in front of a truck several times and then stopped, causing the truck to jack-knife. One of the passengers in the swerving car, Jose Luis Lopez Perez, was killed.

In testimony before the Los Angeles County grand jury last month, truck driver Peter Liebich said the car sped up, slowed down and braked in front of him at least six times in the five or six miles before the accident.

“I was trying to go around this car,” he said, pausing as he became choked by emotion. “I slowed down and I changed lanes . . . If I changed lanes, he changed also.”

Even after the truck jack-knifed, Liebich said he thought he might have successfully avoided the car. Then he climbed out of his cab window and discovered the car crushed underneath his truck.

“I thought, ‘I can help. I can do something,’ ” transcripts indicate he told the grand jury. “But I couldn’t.”

As suspicions about the nature of the crash mounted because of witness descriptions and conflicting statements from the car’s passengers, the two surviving passengers and the driver were arrested and charged with murder and insurance fraud.

California Highway Patrol investigators began to tie Miller to the crash when some of his business cards were found on June 25 at the West Hollywood home of Filemon Santiago, the man identified as the “capper” by one of the arrested passengers and by the owner of the wrecked car.

During the bail hearing, Baum dismissed the business card evidence as inconclusive because he said a friend of Santiago’s worked in Miller’s office and would have had easy access to the cards.

Baum’s contention is that cappers operate independently from attorneys, setting up and executing wrecks, then peddling the crashes to the often unsuspecting lawyers.

“There’s an assumption being made about the relationship between my client and Santiago . . . that Gary Miller should know what Santiago was doing,” Baum said. “They didn’t have that kind of connection.”

Both sides submitted into evidence what they identified as an extortion note from Santiago, discovered during a CHP search of Miller’s house July 17. In it, Santiago asked for $20,000 to “get myself and my family out of here in order to start a new life.” He says he knows law enforcement wants “to get me in order to get Gary” and concludes with the postscript: “Please don’t let me down because I won’t let you down if you work with me.”

Santiago has since disappeared.

Thorpe and Highway Patrol investigators believe the extortion note proves the close relationship between the two men. Baum, on the other hand, says Miller turned it over to authorities as part of his attempt to help them apprehend Santiago, which in turn is proof, he says, that Miller is as interested in halting the fraudulent activity as anyone.

“You would think Santiago would be the last person he would want to see arrested,” Baum said. “Because who is he going to finger? Mr. Miller . . . Whether it’s true or not, that’s what he’s going to say.”

Miller’s Wilshire Boulevard office also was searched July 17 by the Highway Patrol. More than 80 files and several computers were seized. Since then, the eight suspected fake accidents have been identified in court records as being linked to Miller. Confessions regarding their staged nature have been obtained from participants in five of those crashes, Thorpe said.

All of the cases appeared to involve Santiago and financial records document frequent payments to Santiago from Miller’s office--at least $20,000 between July, 1990, and September, 1991.

But Baum pointed out that none of the information taken from the office involved the fatal crash because Miller refused to take on that case after he learned of the death. Baum suggests that declining to pursue that case and dropping several other Santiago-related cases within weeks of the fatal wreck is evidence of a “good-faith effort” by Miller to rid his firm of a fraud that Baum said the attorney had just discovered.

Thorpe views Miller’s dropping of the cases as proof that he panicked after Lopez Perez died and tried to cover his tracks, realizing he had gotten in too deeply.

“If Miller truly had any interest in divesting the firm of fraud, he would have done it several years ago, when he was made aware of Filemon Santiago and the fraud,” Thorpe said, referring to an April, 1991, case involving Miller and an insurance company investigator named Hollis Spillman.

Spillman, who works for Mercury Insurance Co., has known Miller for several years and told the grand jury that in 1991 a client of Miller’s confessed to him that she let her car be wrecked by people associated with Santiago in order to collect more than $1,000 in insurance money. Spillman said that when he confronted Miller with that admission at the time, the attorney agreed to drop the case but professed no knowledge of anyone named Filemon Santiago.

Then, within days of the search of Miller’s office, Spillman said Miller called him and asked him to intervene on his behalf with the Los Angeles County district attorney’s office. Spillman agreed to meet Miller for lunch and then turned informant, entering the restaurant wearing a tape-recording device supplied by the state Department of Insurance.

At the July 24 lunch, Spillman said Miller “basically asked me to lie for him. He wanted me to say that I had known him for eight years and he was an outstanding attorney, that he deplored fraud and that if he found out he had a fraud case, he would drop it.”

Spillman said Miller was nervous about the search and blamed employees in his office for getting him involved with Santiago, whom he did then acknowledge knowing. The tape transcript indicates Miller also admitted prior involvement with other cappers.

Baum maintains that Spillman’s characterization of Miller’s request was biased, that Miller was only asking the investigator to tell the truth. After all, Baum pointed out, Miller had dropped the 1991 fraud case when Spillman brought it to his attention.

His willingness to admit to prior involvement with capping further illustrated his concern about the situation, Baum said.

“He knew that he had grown too fast,” he said, “that it was out of control.”