Lawrence car crash scheme suspected

Faked accident endsin death, police say

By John Ellement and Caroline Louise Cole, Globe Staff and Globe Correspondent, 9/13/2003

LAWRENCE -- Altagracia Arias was an honest dominoes player and a cheery regular at bingo games, say those who knew her at the senior center. But authorities said the 64-year-old grandmother was also playing another game, an illegal one that can earn participants thousand of dollars and costs the insurance industry millions each year.

And it cost Arias her life.

She approached friends at the Lawrence Senior Center, offering to sell them "seats" in two cars that would stage a crash Sept. 4, Lawrence Police Chief John J. Romero said yesterday. The price for a chance at an insurance fraud payday: $200.

"Staged accidents in Lawrence -- it's an industry," Romero said.

That crash was supposed to earn Arias and the seven other people -- four in each car -- $2,000 to $3,000 each, authorities said. Instead, Arias suffered a fatal head injury when the car she was in struck the other car, bounced off it, and slammed into a pole on East Haverhill Street. Both drivers are facing manslaughter charges.

Romero and Essex District Attorney Jonathan W. Blodgett said her death created an opportunity for law enforcement to crack down on the fake accident trade.

"These staged accidents that have been going on for a while have finally culminated in a death," Blodgett said. They also contribute to artificially high insurance rates for all policyholders, he said.

Lawrence residents file many more personal injury claims per capita than residents of any other city in the state, Blodgett said yesterday outside Lawrence District Court, where one of the drivers in the accident was arraigned on a manslaughter charge.

In the crash, Romero said, Arias was riding in the back seat of what is known as the "bullet car" -- the vehicle that causes the staged accident.

Police said Jacinto Maldonado, 22, ran a stop sign on Ferry Street at the intersection of East Haverhill Street and smashed into the other car, driven by Hairo L. Gomez. Arias was riding in the car driven by Maldonado, her grandson, authorities said.

Gomez, 22, an immigrant from the Dominican Republic who works as a machine operator for a New Hampshire company, pleaded not guilty yesterday to manslaughter, a felony that carries a 20-year maximum sentence, and was ordered held on $100,000 cash bail by Judge Michael F. Stella. Maldonado has not been captured and is being sought on a manslaughter charge, police said.

At the arraignment, Lawrence J. McGuire, a court-appointed lawyer, said Gomez grew up in the Dominican Republic and came to the United States about two years ago. Gomez was in court wearing the uniform of the company where he works. McGuire said Gomez attended one year of college in the Dominican Republic, studying to be an electrical engineer. He has no criminal history in the United States or in his native country, and has worked to establish a reputation as a hard-working man, McGuire said.

Steve O'Connell, spokesman for the Essex district attorney's office, said all eight people in the two cars were participating in the alleged insurance fraud. Authorities said more charges are expected. Romero said Lawrence police Officer Rick Santiago, who responded to the accident, was suspcious about some things that didn't appear right. After word got out that Arias died, Romero said, the Police Department started getting tips from people outraged at the fraud plan, and it became clear to authorities that she had solicited potential riders for the staged crash from the senior center and elsewhere in the city.The number of personal injury claims filed annually in Lawrence is among the highest in the state, said Dan Johnston, president of the Automobile Insurers Bureau and executive director of the Insurance Fraud Bureau of Massachusetts, an industry group that investigates insurance fraud. He did not have figures available last night, but said that "every year is higher, which suggests that more fraud is creeping into the system." The rate at which people are reported hurt in automobile accidents in Lawrence is also high -- above the state average -- which raises suspicion in the industry about fraud, Johnston said.

"Clearly, some parts of the state have higher rates than others," he said, "but Lawrence has always been under suspicion."

Estimates for how much staged accidents cost insurance policyholders in Massachusetts were unavailable last night, but Robert Hartwig, chief economist at the Insurance Information Institute in New York City, said such fraud cost policyholders in New York state about $432 million this year.

While it's difficult to calculate how much fraud costs individual policyholders, it could range from $40 to $100 per vehicle annually, Hartwig said. Yesterday, a bouquet of roses and chrysanthemums lay at the telephone pole at one corner of the intersection where Arias died. Her relatives could not be reached yesterday, but at the senior center she visited nearly every day, those who knew her were shocked to hear that authorities said her death occurred as part of a scheme to defraud insurance companies.

Those interviewed at the center yesterday said they were not approached by Arias with her alleged offer to participate in the scam. Joe Dee, 73, of Lawrence, said Arias had returned from a vacation in the Dominican Republic about two weeks ago, and appeared tanned, relaxed, and worry-free. "She was a very fine person, a very good domino player," Dee said. "She wasn't a devious person."

Globe correspondent Jared Stearns contributed to this report.