The director of a multi million pound accident management company was arrested for conspiracy to scam UK motor insurers.
The 23 year-old director has possibly made millions by submitting fraudulent accident claims to insurers and has covered this activity by engaging in other business activities, including involvement in numerous London-based accident management companies.
Officers from the Traffic Operational Command Unit began their investigation, codenamed Operation Scarp, eight months ago when insurance companies identified irregularities in the claims being made and the IFB contacted the police.
So-called ‘cash for crash’ scams have typically involved staged crashes, where fictitious paper-based claims were submitted to insurance companies. They have usually involved a low and high value car, where the low value car was ‘at fault’. The party was able to reap maximum pay-out from the claim, including cost of repair, vehicle storage and significant sums for often phony courtesy cars.
In the case of the arrested man, detectives estimated that the director was making an average of £40,000 per dishonest claim by engaging in this type of activity. Part of this sum was generated by his company’s leasing business, which specialised in hiring out high value vehicles such as Mercedes, BMWs and Jaguars costing insurance companies several hundred pounds a day.
Police said the real victims were the motorists who had absorbed the costs of these scams by paying £40 – £50 more annually on their car insurance premiums.
John Hollands of the traffic operational command unit, said: “Criminals who organise this type of crime exploit people in the community who ordinarily would not become involved in criminal activity and believe they won’t be caught. My message is, do not get involved in this crime. If you do, we will find out about it and you will be caught.”
The police have been working with the Insurance Fraud Bureau (IFB) and insurers to prevent this type of fraud. Since May police have arrested over 25 people suspected of involvement in similar actions, who now risk prosecution. Many of them are believed to be otherwise law-abiding citizens who were asked by criminal organisers to provide their details to substantiate the claims and were paid a small sum of money in return with assurance of little or no risk.
In regards to these arrests, Sue Jones, head of unit at the IFB commented: “The success of these arrests shows the power of the private and public sector working collaboratively and sends a very clear message to those criminals involved in this type of crime – the insurance industry is no longer an easy touch, we know who you are and we will continue to work closely with our colleagues in the police to protect honest policyholders. We will detect, disrupt and wherever possible, prosecute these criminals.”