A bail review hearing before a District Court judge was set today for a 62-year-old lawyer indicted on theft and fraud charges stemming from a yearlong investigation of automobile insurance accident claims.
A Central District Court commissioner early today ordered the attorney, Nelson R. Kandel of Ruxton, held on $25,000 bail pending today's bail review hearing. Mr. Kandel was arrested yesterday.
The charges were the first from the investigation, targeting practices of lawyers, doctors and other professionals with roles in the handling of insurance claims, said the Maryland attorney general's office.
A state insurance official said as many as 10 lawyers and several physicians also could face indictment in the probe -- the first major investigation of insurance fraud in the state since the mid-1970s.
"We are targeting the key players who encourage and facilitate the theft of millions of insurance dollars each year, including some lawyers, doctors, and others," said Attorney General J. Joseph Curran Jr.
"The industry in general and Baltimore in particular seems to be very hard hit by an inordinate amount of frivolous and fraudulent insurance claims," said Ronald A. Sallow, supervisor of the Maryland Automobile Insurance Fund's special investigation unit.
More than a year ago, he said, insurance industry representatives -- including what now is the National Insurance Crime Bureau -- began work on "a plan of attack" and won the support of the attorney general's office in ferreting out lawyers who allegedly encourage the filing of false claims, often with the cooperation of medical care providers.
The investigators furnished undercover officers with phony identities and bogus policies provided by insurance companies, and sent them to lawyers handling accident claims.
"We insured State Police undercover vehicles," Mr. Sallow said. "There was never any contact or damage to any of the vehicles. There were never any accidents."
But the undercover operatives would tell the lawyers they had been involved in an accident, were not injured, but wanted to make some money, according to Mr. Sallow.
"I can tell you that the people in the attorney general's office and State Police were shocked at how blatant the actions were on the part of virtually every attorney they went into," Mr. Sallow said. "There were a significant number of attorneys involved, and a collateral number of care providers."
Mr. Sallow said "there are probably 10 attorneys with significant problems" from the investigation.
Mr. Kandel, of the 7500 block of L'Hirondelle Club Road in Ruxton, was arrested at his office in the downtown USF&G Building.
State Police investigators had a search warrant and seized "a carefully enumerated group of files," said Norman L. Smith, assistant attorney general in the Criminal Investigations Division who is in charge of the case.
Mr. Kandel faces 10 counts of felony theft, presenting fraudulent insurance claims, and soliciting others to steal, file fraudulent claims and make a false police report.
Three of the investigators are identified in the indictments, which allege that Mr. Kandel solicited them variously to make false insurance claims, and through false claims to steal money from the Government Employees Insurance Co.
In the last major investigation of fraud in automobile accident claims, federal prosecutors won convictions of more than a dozen lawyers, doctors and chiropractors.