Allstate Rounds Up More than $30M in 2004 Fraud Collections from Judges, Juries

In 2004 Allstate Insurance Company’s Special Investigation Unit, or SIU, exposed criminals including a New Jersey chiropractor using unlicensed personnel to perform unnecessary exams and a Florida outfit staging car accidents on Miami streets – all for illegal profit at other’s expense.

In 2004, judges and juries around the country awarded Allstate Insurance Company $30,810,000 in damages resulting from insurance fraud schemes against the company and its customers — the result of a campaign Allstate embarked upon in late 2001 to go after the pocket books of fraud perpetrators in court. Since that time, Allstate has gotten more than $55 million in judgments against criminals the company says range from individuals to sophisticated organized crime syndicates.

“Industry estimates say phony insurance claims take an extra $200 out of every consumer’s pocketbook annually in the form of higher premiums,” said Ed Moran, Allstate assistant vice-president in charge of SIU. “2004 was a good year in the fraud fight, but we have barely scratched the surface battling criminals coming up with newer, more creative schemes every day.”

Despite thirty-plus million dollars in judgments, Allstate has only collected $5.24 million in 2004. Bankruptcies and alleged money laundering often make it difficult to find the cash.

Industry estimates put the overall yearly price tag for fraud at more than $80 billion dollars. According to the Insurance Information Institute, historically, more than one-third of bodily injury insurance claims resulting from auto accidents contain some kind of fraud.

In addition to financial victories, Allstate SIU works closely with local, state, and federal authorities for criminal investigation and prosecution – resulting in arrests around the country, taking criminals off the street.

In New York City, the NYPD’s Organized Crime Task Force asked Allstate SIU for help investigating an auto salvage yard allegedly run by a noted New York mob figure. Allstate SIU helped the police identify stolen vehicles that were being crushed in the salvage yard after being picked off New York City streets. The alleged crime boss has been arrested and is now serving time in prison.

In early 2004, Allstate SIU tipped off Monterey County, California Sheriff’s Police to what became the county’s biggest-ever insurance fraud sting. After an investigation where Allstate led police to auto repair facilities allegedly performing unsafe repairs and billing customers for work that was never performed, five local businessmen were arrested after one of the alleged crooks reportedly showed an undercover officer how best to fake a car break-in.