Md. targets accomplices in insurance fraud case

Mitchellville man jailed for collecting $268,000 in bogus auto claims

April 16, 2004|By Paul Adams | Paul Adams,SUN STAFF

The scheme was inspired in its simplicity: Fake a series of auto accidents and then file numerous claims for damages against the insurance companies of dozens of accomplices and unwitting participants.

For three years, Charles L. Burton of Mitchellville in Prince George's County got away with it, collecting $268,000 in bogus claims against 12 auto insurance companies in what state officials described yesterday as one of the largest insurance frauds in recent years. It wasn't until claims investigators for one of the companies tipped off state insurance regulators that the scheme unraveled, resulting in an eight-year prison sentence for Burton on April 9.

With Burton, 33, behind bars, officials with the Maryland Insurance Fraud Division say their next step is to go after his accomplices as part of a campaign to stem fraud that costs every insurance policyholder in the United States. an estimated $200 to $300 a year in the form of higher premiums.

"Insurance fraud impacts insurance companies, and in order for them to make up their losses, they charge every citizen who needs health insurance or casualty insurance or homeowner's insurance. It affects everybody," said state Attorney General J. Joseph Curran Jr.

Burton, who used at least 14 aliases, pleaded guilty in Prince George's County Circuit Court to 50 fraudulent claims, though investigators say there were likely more. They displayed a table covered with dozens of plain brown case files during a news conference yesterday. The claims ranged from less than $3,000 to more than $10,000. Of the companies involved, Bloomington, Ill.-based State Farm Insurance Co. was hit the hardest, with $75,479 in false claims.

Investigators say the scheme involved more than 35 people, some of whom were paid by Burton to contact their insurance companies and falsely claim to have hit one of at least three vehicles he used in the scheme. In other cases, Burton obtained insurance information from unwitting victims and then filed false claims without their knowledge.

"I hate to say this, but none of these scams is particularly original," said Ronald A. Sallow, associate commissioner with the state Insurance Fraud Division. "We've seen them all before, and I'm sure we'll see them all again."

State officials and industry experts say Burton's eight-year sentence is unusual for a case of this nature.

"Often insurance fraud is viewed as somewhat of a victimless crime, and ... often when cases are brought to court, the courts are reluctant to give a substantial period of incarceration," said Assistant Attorney General Emmet Davitt.

The Insurance Information Institute in New York estimates property-casualty insurance fraud cost insurers $31 billion in 2002, the most recent statistics available. "It's nearly an epidemic," said Jeanne Salvatore, a spokeswoman for the institute, referring to staged accidents.

Often, the schemes go unnoticed because insurance companies aim to demonstrate good service by paying claims quickly, said James J. Cadigan, special agent for the National Insurance Crime Bureau in Washington.

"So, there can be quite often - depending on the amount of claims made - the possibility that something like this falls through the cracks," he said.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.