Sen. Pica asks for limits on wiretaps Bill would ban tool used to investigate insurance fraud cases

February 16, 1996|By Frank Langfitt | Frank Langfitt,SUN STAFF

In a move that has surprised and puzzled state insurance regulators, a Baltimore senator has proposed outlawing the use of an investigative tool for fighting fraud.

State Sen. John A. Pica Jr. has introduced a bill that would prohibit state investigators from secretly taping conversations between their informants and fraud suspects. Such tapes are designed to help catch unscrupulous lawyers and physicians who conspire to fake car accident injuries.

"I can't see why anybody would be opposed to it," said state Insurance Commissioner Dwight K. Bartlett III.

But Mr. Pica says the law grants too much power to the insurance industry, which has a financial incentive to oppose claims.

"Why should we allow an industry with a profit motive to wiretap citizens?" said Mr. Pica, a Democrat and chairman of the city's Senate delegation in Annapolis. "I don't think we should give this crowd the ability to walk into the street and start eavesdropping."

Despite his argument, the bill is not expected to pass the Senate Judicial Proceedings Committee, where a hearing was held on the measure this week. Mr. Pica was the only person to speak in favor of the bill.

The opposition was widespread. It included the Maryland Insurance Administration, the state attorney general's office, the state police and the state's attorneys association.

'Criminal's best friend'

"This bill is a criminal's best friend," said Dennis Jay, executive director of the Coalition Against Insurance Fraud, a Washington-based organization that represents consumer groups, prosecutors, regulators and insurance companies.

"It will probably die," said Sen. Walter M. Baker, the committee chairman.

Auto insurance fraud, a significant problem in Baltimore, costs each American household more than $200 annually in additional premiums, according to the FBI.

In Baltimore and other cities, auto accident rings stage car crashes, then conspire with lawyers and doctors to fake injuries to win settlements from insurance companies, according to state officials.

When real accidents occur, "runners" working with fraud rings sometimes arrive soon afterward and encourage victims to falsify injuries for a fee.

In recent years, the General Assembly has tried to crack down on the problem. The legislature last year created a state insurance fraud division funded by the industry to investigate complaints.

A helpful tool

In 1994, legislators added insurance fraud to the list of crimes in which police could tape conversations without a court order as long as one party consents. State investigators say it can be a very helpful tool.

Using microphones hidden on informants or by taping telephone conversations between informants and accident ring members, police can get the evidence they need to convict, state officials say.

Assistant Attorney General Michael DiPietro said that Maryland is one of more than 40 states that allow taping conversations in insurance fraud investigations.

Law still unused

Officials with the Maryland Insurance Administration acknowledge that, although the law has been on the books since 1994, they have yet to use it in an investigation.

Associate commissioner Ronald Sallow attributed the delay to a shortage of workers and the amount of time it takes to investigate suspects and set up an operation.

Mr. Pica argues the law goes too far. Until 1994, investigators could record conversations only in such crimes as murder, kidnapping, arson, bribery, extortion, gambling and robbery.

Insurance fraud, Mr. Pica said, is not nearly as serious. "This is overreaching," he said.

He also argued that the legislature has bent over backward in recent years to help the insurance industry on various issues. "These are the people denying benefits, and we're giving them everything they ask for," he said.

Mr. Pica, a Baltimore lawyer, has backed bills in the past that have favored plaintiffs. He said the law firm he works for, &L Neuberger Quinn Gielen Rubin and Gibber, does almost no accident cases.

"It's less than 1 percent of our total workload," he said.

Until recently, Mr. Pica worked for the law firm of Peter Angelos, the multimillionaire asbestos attorney and owner of the Orioles. Mr. Pica said accident cases make up only a small percentage of the Angelos firm's work.

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