Arguably the largest no-fault insurance scam was committed by 36 defendants and three of the defendants allegedly involved in the fraud are New Jersey residents.
The large-scale insurance fraud scam began when the defendants allegedly recruited accident victims for treatment at designated clinics. The prosecution contends that after the accident victims went to the designated clinics, the clinic billed the insurers for patient treatment and procedures that were not necessary or even performed on the accident victims.
These defendants, also known as runners, who brought the accident victims to the designated clinics, were paid $2,000 – $3,000 per patient. The prosecution claims the runners would seek out injured victims directly from accidents and hospitals. In addition to runners, the insurance fraud scam also involved clinic controllers, doctors and other professionals. The prosecutors claim that lawsuits were filed fraudulently based personal injury claims rising from the underlying accidents.
The insurance fraud was reportedly committed by billing in excess of $275 million of fraudulent charges through medical fraud mills. The fraudulent charges were billed to no-fault auto insurers. No-fault insurance can provide up to $50,000 per person for claimed injuries. The defendants who were charged with the insurance fraud scam made a reportedly $113 million from the fraudulent charges.
The defendants were formally charged with health-care fraud conspiracy, money laundering conspiracy, mail fraud conspiracy and racketeering conspiracy. If convicted, the charges against the defendants carry a prison sentence that has a maximum sentence of 30 years to 59 years. This fraudulent insurance scam involved the legal system, insurance system and medical system simultaneously.
Source: NJ.com, “N.J. doctor among dozens charged in largest no-fault insurance fraud case,” Feb. 29, 2012