N.H. Man Gets Door Slammed on Auto Fraud Ring

A New Hampshire man has been found guilty and sent to jail for his part in an auto insurance scam in which he reportedly attempted to create a phony car accident in an effort to make false insurance claims and collect thousands of dollars in unnecessary chiropractic bills, Massachusetts Attorney General Tom Reilly announced.

An Essex County jury deliberated for two hours before finding Kenneth Knight, 55, of Seabrook, New Hampshire, guilty of one count each of motor vehicle insurance fraud and attempted larceny over $250. Judge Elizabeth Fahey sentenced Knight to serve 2 ½ years in the House of Corrections followed by three years of probation.

On Monday, Melvin Martinez, 26, of Holyoke, pleaded guilty at what would have been the start of his trial to one count each of motor vehicle insurance fraud and attempted larceny over $250. He was sentenced to three years probation with the conditions that he maintain employment, get his GED, and pay full restitution of $362.

Martinez and Knight were two of eight individuals indicted in December 2003 on motor vehicle insurance fraud and other charges after the group allegedly attempted to create a phony car accident in an effort to make false insurance claims and collect thousands of dollars in unnecessary chiropractic bills. The indictments are based on a series of insurance claims arising out of reports of a motor vehicle accident that the Attorney General’s investigation revealed never occurred.

Six other individuals were also indicted on one count each of motor vehicle insurance fraud and attempted larceny over $250: Esmerlyn Diaz, 22; Adam Matthews, 24; Josefina Perez, 50; Julian Perez, 56; Oscar Vargas, 28; and Damarys Vasquez, 22, all of Lawrence.

Josefina and Julian Perez were additionally indicted on one count of perjury each based on their testimony before the grand jury.

Another person charged in the case, Demarys Vasquez, has pleaded guilty and was sentenced to three years probation.

Diaz, Matthews, Josefina and Julian Perez are next scheduled to appear in court on Jan. 11.

According to the indictments, the defendants reported that they had been involved in an accident on Nov. 11, 2002 at the intersection of I-495 and Route 110 in Haverhill. The report stated that Vargas was driving his 2000 Volkswagen Jetta, with Josefina Perez and Julian Perez as passengers, when they were struck by Matthews who was driving Diaz’s 1989 Honda Civic, with Martinez and Vasquez as passengers.

After the accident, the Jetta was allegedly towed to an auto body shop in Methuen, Advanced Auto Collision, where Knight was employed. The defendants allegedly involved in the accident submitted claims to their insurance companies for damage to the vehicles and extensive chiropractic treatment.

As a result of an investigation undertaken by insurance company investigators, the National Insurance Crime Bureau and Massachusetts State Police, evidence was developed to demonstrate that the alleged accident never occurred. Several days after the accident was alleged to have occurred, investigators located and photographed the Honda Civic parked on the street in Lawrence with no substantial damage to it.

The investigation also determined that the Jetta was not towed to Knight’s auto body shop as the defendants reported, but was allegedly driven there and severely damaged there, solely for the purpose of furthering the fraudulent insurance claims.

As a result of the investigation of this case and the fraud it exposed, no payments were made on the claims submitted by the defendants.

The case was prosecuted by Assistant Attorney General Kajal Chattopadhyay of AG Reilly’s Insurance and Unemployment Fraud Division, and was investigated by investigators from Liberty Mutual Insurance Company and the OneBeacon Insurance Group, to which the allegedly fraudulent insurance claims were submitted, the National Insurance Crime Bureau and the Massachusetts State Police Auto Theft Strike Force.