The FBI arrested 12 people Thursday, and was searching for seven others, in what the bureau said was highly organized fraud ring that staged auto accidents to cheat insurance companies out of millions of dollars annually.
Those arrested included Sam “Niko” Lahooti, the man suspected of being the head “capper,” or person who orchestrated the potentially dangerous automobile accidents and recruited bogus victims to file insurance claims, authorities said.
The alleged fraud ring also included two chiropractors who would “treat” the purported victims and then file hugely inflated medical bills, according to Ronald L. Iden, special agent in charge of the FBI’s white collar crime division in Los Angeles.
“They’re responsible for hundreds of claims and millions of dollars annually,” Iden said of the suspects at a news conference.
The capper and doctors were alleged to have received much of the money, with more than a dozen people claiming to be victims of the accidents receiving no more than $1,000, Iden said.
FBI agents and Los Angeles police officers fanned out through Southern California, Sacramento and Nevada in the early morning hours to surprise the suspects.
They were still searching for the other suspects, including chiropractor Hamid Manesh, 39, of Diamond Bar. The other chiropractor, Mehrdad Ahrablou, 39, of Los Angeles was among those who later appeared in federal court Thursday for bail hearings.
Among those charged were William Franklin, 33, of Reseda; Sebastian Miller, 29, of Woodland Hills; Hamid Nour, 41, of Canoga Park; and Jennifer Rinaldi, 28, of Studio City.
The dragnet, FBI officials said, was the culmination of a long-term initiative by the bureau dubbed “Operation Blown Engine,” part of a multi-agency initiative to rein in fraudulent insurance claims that is estimated cost billions of dollars a year in the United States.
Los Angeles, authorities and industry experts said, is the insurance fraud capital of the nation. About one in five dollars in insurance payouts go toward fraudulent and illegal claims.
“The real victim is every person in the United States who has to pay for insurance,” said Ralph E. Lumpkin, a supervisory special agent with the National Insurance Crime Bureau, which works with law enforcement agencies to combat fraud.
Lumpkin, a former FBI agent specializing in white collar crime, said staged auto accidents are among the most pervasive types of insurance fraud--and among the most dangerous, given that the “accidents” often involve unwitting drivers on freeways and other busy roadways.
In the current case, authorities said, the suspects engaged in dozens of less serious one-car accidents rather than a more serious and potentially dangerous multiple ones. Most “accidents” cited in a 57-page complaint involved car occupants who claimed injuries suffered by driving into walls and other fixed objects.
In all, 17 people were charged with mail fraud and conspiracy to commit insurance fraud through a network of attorneys, office administrators, medical clinics and recruits, known as “claimants.”
Some of those arrested and sought by the FBI helped find claimants and send them to doctors and lawyers who knowingly participated in the scheme, the complaint said, while others played smaller roles, driving the cars or being passengers in them.
Like other cappers, Lahooti was believed to have been a middleman of sorts, employed by lawyers and doctors to increase the number of insurance claims handled by their office. He was suspected of helping plan the actual details of the “accidents,” all the way down to who was sitting where in the car, authorities said.
“Scripts” with details and diagrams of the planned accidents were provided, and in some cases, participants injured themselves “to lend credibility to the claim reports,” according to the FBI.
Rick Wade, assistant special agent in charge of the white collar crime division, said the bureau was still investigating the case, and looking for doctors, lawyers and others who played active role in the alleged criminal network.
Agents were also trying to track where any illegal profits went.
Although such dragnets can look relatively insignificant given the thriving insurance fraud business, Wade said he hoped they would have a deterrent effect.
Also, Wade added, those arrested in such insurance rings “are often quick to cooperate with us in ongoing investigations” against their co-collaborators.