A recent programme on Channel 4 followed the investigators assigned to Operation Nacho which resulted in the arrest of 70 people, with 57 people either pleading guilty or found guilty of offences including fraud and conspiracy to commit fraud. Ben Fletcher, Director of the Insurance Fraud Bureau commented in March that “Convictions send a clear message – insurance fraud is not a victimless crime.’
March 2013 saw the conclusion to the long running “cash for crash’ trial at Newcastle Crown Court. Operation Nacho, the police investigation into fraudulent car insurance claims, commenced in 2009 and highlighted 25 accidents which were identified as being fraudulent although 261 accidents were considered to be suspicious. Farleys’ criminal defence solicitors represented one of the defendants charged as part of Operation Nacho.
The fraud termed as ‘Crash for Cash’ is quite simply that; deliberate and staged accidents to scam monies from insurance companies. Following the ‘accidents’, exaggerated claims are filed seeking financial restitution which may include monies for damaged vehicles, car hire, personal injury and loss of earnings.
The staged accidents can involve a variety of different techniques to create an accident, one such example being a “rear-end shunt’. This involves two vehicles; the driver of the first vehicle applies the breaks suddenly causing the driver of the vehicle behind to drive into the back of the first vehicle. This can of course be more complex with the introduction of additional vehicles. The second vehicle may even be driven by an innocent motorist to add credence to the deception or both drivers may be part of the trickery to increase the financial return.
Shunt accidents resulting in whiplash personal injury claims can be difficult to disprove as quite often, there is little physical evidence of injury and the medical practitioners must work from the symptoms described by the fraudster patient. The fraudster may have also been carrying passengers in the vehicle, (or on occasion, passengers are fabricated altogether) who also seek compensation for their alleged injuries. The fraud does not end there though, vehicles must be towed away, repaired and placement vehicles hired and all at the cost to the insurance companies.
On the 27th June, the Sentencing Council launched a 14-week public consultation, which closes on 4 October 2013. The consultation is seeking views on sentencing for fraud, bribery and money laundering offences. The Sentencing Council detail that private sector fraud, which includes employees claiming for bogus expenses, suppliers making fraudulent payment claims, cash for crash scams and other insurance fraud and people falsifying mortgage applications cost businesses £45.5bn in 2011.
Although the consultation remains open for some time it is likely that changes to sentencing guidelines will result in tougher sentences. In March Durham Police commented that the IFB were investigating 49 organised fraud rings across the UK and suggested that the value of such frauds was in the region of £66 million.
If you have been arrested on suspicion of being involved with fraud or the police wish to speak to you about fraud allegations, it is essential that you seek advice from an experienced solicitor as soon as possible.
The serious crime and fraud solicitors at Farleys have a wealth of experience representing clients accused of fraud offences of all types. Our solicitors work on a UK wide basis and are available to assist 24 hours a day on our dedicated crime line 01254 606050.