Fraud crackdown cited in car accident decline

That could help consumers, because fraud costs the average policyholder $200 to $300 a year, an insurance industry representative said.

Reilly was in Lawrence yesterday to praise public safety and insurance industry officials for the recent indictments of eight people who allegedly filed bogus personal injury claims for a November accident that police say never happened.

Reilly said a Liberty Mutual fraud investigator, Sherry Smith, suspected the claims her company received for the accident were bogus. "Sherry contacted my office and further investigation prompted these eight indictments," Reilly said.

Reilly said a streamlined system his office has put in place for processing suspected cases of auto insurance fraud since a September accident in Lawrence that police said was staged has allowed law enforcement officials to better focus their energies on the problem.

This commitment, Lawrence Police Chief John J. Romero said, has brought a decrease in accidents from 898 between Sept. 13 and Dec. 22, 2002, to 583 in the same period this year.

Reilly said he was highlighting the recent indictments because they represent the more common type of suspected fraud: when a car is intentionally damaged followed by the filing of expensive auto repair and doctor's bills.

"I think it is the sheer volume of auto insurance claims that has discouraged the industry from pursuing suspect fraud cases," said Colleen Cassidy, spokeswoman for the National Insurance Crime Bureau. ". . . It has been hard for us to pursue it on our own."

Caroline Louise Cole can be reached at cole@globe.com.