Six Arrested in Connection With Auto Insurance Fraud Ring

State insurance investigators arrested an attorney in his Playa del Rey home Tuesday on suspicion of masterminding a major auto insurance ring that bilked insurers out of $20 million in phony claims.

Noel Stephen Olshan, 54, a lawyer whose office is in Sherman Oaks, was booked on 19 charges, including 11 counts of insurance fraud and two counts each of tax fraud and tax evasion. He was in custody in lieu of $5-million bond.

Five others were arrested, including his wife and another attorney.

State Insurance Commissioner Charles Quackenbush condemned the alleged ring as an example of fraud that costs California drivers $3 billion to $5 billion a year.

“If we could totally eliminate auto fraud in Los Angeles”--most of it perpetrated by unscrupulous lawyers and doctors--”we could reduce premiums by 20%,” Quackenbush said.

Deputy Dist. Atty. David Guthman said the gang had staged as many as 100 car accidents since 1988, winning between $10,000 and $20,000 per claim.

He said Olshan hired Daryl Thornton and Oliver Manuel Morgan as “cappers” to stage auto accidents in the South-Central Los Angeles area. Morgan and Thornton would recruit drivers and refer the accident victims to Olshan, who would demand settlements from the insurance company, Guthman said.

Olshan allegedly filed phony or inflated medical reports that authorities believe were produced by Paul Blanker, who at the time was a chiropractor and who was arrested Tuesday morning in Lake Havasu, Ariz.

Many times the driver would either speed away from the curb and hit onrushing traffic or slam on his or her brakes while driving in front of an unsuspecting vehicle, Guthman said.

“They placed innocent lives in danger,” he said.

Morgan, 48, of Inglewood, and Thornton, 39, of Monrovia were booked on suspicion of assault with a deadly weapon as well as conspiracy to commit insurance fraud. Each has one prior robbery conviction and will be prosecuted under the “three strikes” provision that inflates punishment for a second felony to a maximum of 20 years.

Olshan could spend as much as 14 years in prison, said Max Huntsman, a deputy district attorney.

Edgar Russel Carver, 79, also an attorney in Sherman Oaks, was taken into custody for allegedly making unlawful referrals for Olshan.

Olshan’s wife, Nanci, 51, was booked on charges of tax fraud and tax evasion for allegedly helping her husband falsify their tax returns.

In trying to prosecute such rings, Huntsman said, authorities are hampered by the law’s protection of attorneys. Lawyers are not required to know whether evidence they present is truthful, making it difficult to prove that they are co-conspirators with their clients, he said.