The organized criminal enterprise usually has a hierarchy. The bosses tend to be professionals, such as doctors and lawyers. They work with the cappers who identify the parties to take part in the swoop and squats and other forms of staged accidents.

The claimants are often poor, frequently illegal immigrants looking for an opportunity to make money. The cappers fulfill this need by paying them a sum of cash, usually a few hundred dollars each, to be hit by another car. The capper provides each of the parties with a “script” so that when questioned by law enforcement or claims adjusters, there are no discrepancies.

The capper then sells the rights to the claim to the lawyer at the top of the hierarchy. The lawyer refers the claimants, or people who were in the squat vehicle, to a medical provider. The medical provider will document, fraudulently, that a number of diagnostic and therapeutic procedures were performed on the claimants. In many instances the claimant never goes to the medical facility or meets the doctor.

The 1992 case took on a different twist since the investigating officer believed that not only was this a staged accident, but that there was sufficient evidence to pursue the lawyer who orchestrated the entire charade.

According to various investigative reports, the officer's investigation led him to the Beverly Hills office of attorney Gary Miller. Prosecuting attorneys involved in fraud is always a challenge since the attorney will invariably say, “I didn't know this was a fraudulent claim.”

During the course of his probe into Miller, the investigating officer enlisted the help of an insurance investigator who wore a wire and captured damning information directly from the attorney. Miller was arrested and charged with conspiracy and second-degree murder, along with several other people involved in this particular staged accident ring.

Records from the California Bar show that Miller was ordered to stop practicing law and four years later resigned from the state bar. After the jury deadlocked on the second-degree murder charge, prosecutors refiled with a lesser charge and the attorney pled no contest to involuntary manslaughter and received a six-year prison sentence. He was also convicted of nine other felonies for insurance fraud and conspiracy, and received a concurrent six-year term.

Investigative records show that Miller typically cleared up to $20,000 dollars for each crash, netting over $1.6 million in the year prior to his arrest. The claims nearly always involved soft tissue injuries, which are hard to disprove. So the question is how can we as claims investigators effectively fight swoop and squats and other staged accidents.

It's tough. While most attorneys and medical providers are law-abiding, the reality is that a subset of each profession is involved in such scams from coast to coast and yet there are only a handful of prosecutions, making success seem akin to finding a needle in a haystack.

In my insurance fraud thriller, Swoop & Squat, many of the insurance-related scams were based on personal experience gained during my years of investigating fraudulent claims in South-Central Los Angeles. To be successful, an investigation needs to be highly detailed and well documented.

Illustration courtesy of the Coalition Against Insurance Fraud

The first critical element is to inspect the damaged vehicles. If the damage, paint transfers or metal striations don't match, the collision probably never took place. These are the easiest claims in the staged accident realm to disprove. In a classic swoop and squat, the damages will match because the accident actually happened.

The next key step is to look for patterns of known associates. Each of the claimants probably has prior claims since cappers tend to recycle their clientele. Sometimes they are drivers, and other times passengers or witnesses. They all play a role in these sordid tales. Index returns will often provide some basic insight, as will link analysis tools.

Demanding to speak to the claimants is critical. Attorneys will often fight this request, but the reality is that everyone can be deposed should the matter be litigated. The claimants will be forced to sit down and recount the tale of what happened, and truth be told, many of these claimants will disappear.

When the attorney capitulates, it is important that these statements be in person. Invariably, the claimant will take out the script to recount what transpired. Simply taking away that script can be enough to not only throw claimants off their talking points, but to convince the attorney to drop the claim.

Even if they refuse to give up the script or don't have one, asking basic questions can yield a similar result. What did the doctor look like? Describe the medical facility? How did you get from your home to the doctor's office? These are basic questions to which the claimant will not have a good answer. Another trick of the trade is to carry photographs of random people dressed as doctors, show them to the claimants and ask them to point to their medical provider. They usually get it wrong and the claim often goes away.

Clinic inspections are another key tool in the investigation process. Some clinics will allow these, while others will resist. Having a medical authorization is very important and cannot always be obtained short of litigation. During my years investigating clinics, we often traveled in pairs. Aside from these being potentially dangerous criminal enterprises, splitting the attention of the clinic administrator was crucial.

In one instance, my partner was gathering copies of the clinic sign-in forms in order to compare signatures and look for evidence that all of the forms were signed on a single date. I used this as an opportunity to snoop around the clinic unattended. After capturing photographs of unplugged and inoperative equipment that could be used to not only deny the claim, but likely get an active state fraud investigation going, we were confronted by staff in the clinic who threatened us if we did not give them the film. After a physical altercation, we managed to get out of the clinic and turn the evidence we had gathered over to both SIU and law enforcement.

Another key step is to actively canvass the neighborhoods where the claimants live. Talking to neighbors can yield a significant amount of information. In addition, digging into claimant history and talking to ex-spouses can provide telltale clues as to whether or not you are dealing with potentially fraudulent claims. Of course any claimant should also have their criminal records checked, since these can provide not only valuable information to impeach credibility, but they can also highlight prior convictions for various types of fraud or other illegal activities.

The reality is that proving fraud is hard, especially when there is real damage as in the case of a swoop and squat. Often the best hope is to convince the attorney that dropping the claim is in his best interest. Attorneys and medical providers are largely shielded from prosecution due to simple plausible deniability.

The more information that can be gathered to link the attorney, provider, capper and claimants together, the higher the probability of success. The perpetrators of insurance fraud don't like aggressive investigations. Just as they are aware of who does and does not reduce medical bills, pay for hot packs or assess comparative negligence, they are aware of carriers that are tough to deal with. Carriers should strive to be in that bucket, as effective investigative tactics tend to keep at least some of the fraudsters at bay.

Christopher Tidball is a casualty claims consultant and author of multiple books including Re-Adjusted: 20 Essential Rules to Take Your Claims Organization From Ordinary to Extraordinary! He spent more than 20 years as an adjuster, manager and business leader with multiple top tier insurance companies. To learn more, visit www.christidball.com.