Scammers grab crash reports to hound victims for treatment

Willis Price and Kevin Kerr were involved in automobile accidents in Memphis. Neither was happy about it. Their anger increased when, within days, they started receiving sales pitches to contact attorneys — possibly to exploit their mishap with bogus injury treatment and fraudulent insurance billings.

The attorneys found their names in local police crash reports. Price and Kerr are the lead plaintiffs in a federal class action lawsuit filed in Tennessee. The suit seeks to quash the sale of police crash reports by the City of Memphis.

Their suit may spur similar filings across the nation, whether or not it succeeds. Personal privacy rights are moving to center stage in today’s cyber-driven world. For years, local police departments and other government agencies have supplemented their budgets by selling the personal information of crash victims as public records. Report sales can earn quite a bit of money for cash-strapped departments and agencies. It’s a revenue stream they want to protect.

But who are the “customers” of the report sales? The U.S. Supreme Court authorized attorneys to advertise for clients in 1974. America’s “personal injury machine” has exploded since then. Shady lawyers, chiropractors, body shops and others use the crash reports to identify crash victims. They hound the victims. The goal is to lure them into getting unneeded — and sometimes medically dangerous — injury “treatment.” Auto insurers are billed for inflated claims. The lawyers may falsely sue insurers to extract yet more money.

It’s a booming scam industry in many states around the U.S.

Access to public records is a crucial to our democratic governance. Yet does the mere fact that you’re involved in a collision give someone the right to access your home address, phone number, drivers license number, date of birth, email and other sensitive personal information?

For all practical purposes, local law enforcement is feeding personal-injury mills by offering up your sensitive information for sale and profit. Do we need more state laws limiting this practice? Or do existing laws simply need better enforcement? Or both?

President Clinton signed into law the Driver’s Privacy Protection Act of 1994. It allows disclosure of personal information only with the person’s express consent. However, the law has many loopholes. Many states (including Tennessee) have similar privacy laws, though enforcement is minimal at best.

The Coalition supports reasonable limits such as a 30-day blackout period for outsider access to crash reports. It’s an uphill battle, however. Budget-minded pushback by state agencies often stalls state legislation limiting access to the reports. Sadly, budget concerns also trump needed policy debates over the privacy of crash victims.

We need better privacy debates, and stronger state laws. How much of our personal information do we want released by “accident”?

Homes bought cheap, burned for inflated claims

Homes and cars were kindling for Verdon Taylor, the overlord of a crime ring that lit up more than 30 arson fires to score nearly $1 million of insurance money.

Buy cheap and claim big was Taylor’s modus during a 16-year binge that traversed the Richmond, Va. area

Taylor’s rat pack bought homes and cars at auctions and foreclosure sales — all at steep discount prices. Single-family homes and mobile trailers and cars all were rounded up. Taylor’s cohorts often rented houses as well.

They stuffed the homes with old furniture and clothing they bought at flea markets or auctions. Several times they recycled furniture, using the same burned items singed in prior home fires.

They often brazenly set fires just weeks or even days after buying policies. The claims were inflated, as if the dusty old furniture was new. Fire claims ranged from $1,000 to $300,000. Ring members often lied about past home-fire claims when buying new policies.

Nearly entered burning home
Taylor’s son Vershawn bought a house at a steep discount, and set the place afire just eight days later.

A concerned neighbor wanted to risk his life to race into the home and see if anybody needed help escaping.

“Everybody should be mad. This is a crime against all of us,” said Miami-Dade State Attorney Katherine Fernandez Rundle.“He was about to run in the house … I said ‘Don’t.’ … It was engulfed and I didn’t know if it would blow up or anything,” his wife said.

The rescuer wisely stayed outside — he nearly put his life on the line for a home that was empty. Vershawn pulled down $303,000 of insurance money.

The feds started investigating as the fires and claims suspiciously piled up. Taylor issued a gag order to one ring member. “Tell those people to get out of your face,” Verdon ordered. Just hang up the phone whenever federal agents called him, he said.

Taylor will spend up to 50 years in federal prison after being convicted in October 2017. His girlfriend and Vershawn will spend up to 20 years of quality time behind bars.

Arson rings ransack South Florida
Stuffing homes with old furniture and clothing seems to be a habit with some arson rings. Five gangs ran amok in South Florida, launching an eye-popping $25-million insurance crime wave by torching dozens of homes.

Corrupt public adjusters led the rings. The adjusters exploited the insurance system to rubber-stamp false claims for payment. They typically rented homes, often large ones. They recruited cronies as straw owners, waited 90 days for the insurance to kick in, then started the fires.

The arsonists often filled homes with inexpensive old furniture and clothes. The stuff was stolen or bought from thrift shops — just like Verdon Taylor.

Often they placed a burning candle next to a fake plant or other flammable item. That sparked fires and created seemingly plausible excuses for the “accidental” blazes.

The sham renters made inflated claims for the junk possessions.

They even planted the same seared furniture, family pictures, bedding and other personal items in multiple homes they burned.

Closets sometimes were filled with sweaters. That seemed strange to investigators in a region known for year-around heat.

Innocent homeowners foreclosed
Two homes were the main income source for unsuspecting homeowners who rented their places to ring members. When the fires forced the renters out, the owners couldn’t pay their bills and lost their homes to foreclosure.

Home insurance arsons have fallen significantly in South Florida. Some would-be arsonists have fled the state rather than face prosecution and certain convictions. At least 75 others who stuck around were rounded up and have pleaded guilty.

“Everybody should be mad. This is a crime against all of us,” said Miami-Dade State Attorney Katherine Fernandez Rundle.

End times for personal vehicles – and automobile fraud?

If you’re just starting your career as an auto fraud investigator, you might consider broadening your portfolio of skills.

That’s sound advice if you believe the predictions of car guru Bob Lutz. The automobile will go the way of the horse and buggy in 15 years, 20 at the most, Lutz says In its place will be “standardized modules.” Here’s how he sees the future:

“The end state will be the fully autonomous module with no capability for the driver to exercise command. You will call for it, it will arrive at your location, you’ll get in, input your destination and go to the freeway.

“On the freeway, it will merge seamlessly into a stream of other modules traveling at 120, 150 mph. The speed doesn’t matter. You have a blending of rail-type with individual transportation.

“Then, as you approach your exit, your module will enter deceleration lanes, exit and go to your final destination. You will be billed for the transportation. You will enter your credit card number or your thumbprint or whatever it will be then. The module will take off and go to its collection point, ready for the next person to call.

“Most of these standardized modules will be purchased and owned by the Ubers and Lyfts and God knows what other companies that will enter the transportation business in the future.”

So … no human control means no staged crashes, no auto giveups and likely very few accidents because 99 percent are caused by human error.

Still, don’t count out the creativity, flexibility and skill of the fraudster community. Where there’s a will — and insurance dollars — they’ll find a way. Fortunately for us all, so will fraud investigators.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.