THE FIGHT AGAINST CRIME: NOTES FROM THE FRONT : Auto Insurance Fraud Poses a Long Fight

Rampant auto insurance fraud means crime fighters must relish small victories.

The arrests last week of two allegedly crooked San Fernando Valley chiropractors generated some back slapping. The two spine specialists are accused of ripping off insurance companies by treating accomplices who were staging car accidents.

“It represents one small piece of the entire fraud scene,” said Deputy Dist. Atty. Leonard J. Shaffer, who praised the dozen or so Los Angeles police officers assigned to small “staged collision” units citywide.

The chiropractors, Shahin Ravery, who has offices in Encino and Beverly Hills, and David Denney, who has an office in Chatsworth, are scheduled to be arraigned today in Van Nuys Municipal Court.

For prosecutors and detectives, getting to this point means they’ve done a good job, but there’s a long way to go.

Without question, insurance fraud costs consumers hundreds of thousands of dollars each year in increased premiums--billions of dollars nationwide. Industry groups say that insurance fraud of all kinds may cost the nation as much as $20 billion per year--about $3 billion annually in California--of which auto insurance fraud is a substantial part. Still, it rarely causes the public outrage of such heinous crimes as murder and rape and ultimately is largely ignored by most people outside of law enforcement.

Given a choice, authorities say, the average citizen will opt for more street officers--community policing being the rage--rather than more detectives fighting fraud.

It is an understandable but frustrating truth for anti-fraud officers--who must be prepared to be reassigned virtually any day--and prosecutors, authorities say.

“It’s a big money business,” said Det. William Jessup, the officer in charge of the San Fernando Valley staged collision unit.

“This crime affects everybody where you feel it most--in the pocket.”

The officers sometimes work months gathering evidence needed to prosecute the players in fraud rings. Often they rely on undercover work. There are even times when they prevent accidents by getting a step ahead of the stagers.

Yet authorities acknowledge that auto-fraud conspirators are everywhere. Unlike most other crimes, the staged smashups usually involve lawyers or doctors as participants in addition to the actual street operatives, known as “cappers,” they say.

“The only way auto fraud works is for people to stage accidents and make claims through doctors and lawyers,” said Det. Alan Jordan, the officer in charge of the Central Traffic Division’s staged collision unit. “We want to get to the doctors and lawyers and chiropractors.”

The crashes themselves can be far more dangerous than mere fender benders.

A common ploy might involve players in two separate vehicles working on a third unsuspecting motorist. The object is to distract the motorist so that he or she crashes into the back of a car driven by one of the players.

“You think there’s a chance you’re going to get hurt?” Shaffer said.

So law enforcement officials say they will not let up on auto insurance fraud even if nailing down a strong case takes time.

Perhaps half a dozen players are expected to face court trials next month because of their suspected roles in a 1992 staged accident with big trucks on the Golden State Freeway near Sun Valley in which one man was killed.

“That represents the worst of the worst,” Shaffer said. “When you get somebody dying . . . that’s the height of stupidity.”