LAWRENCE — Almost since the start of the city's auto insurance fraud crackdown, Lawrence attorney Socrates De La Cruz — the 1991 National Youth of the Year honored by the Boys and Girls Clubs of America — was rumored to be a target of investigators.
Many admirers at the Fenton Judicial Center, where De La Cruz had made a name for himself as the Methuen boy who made good despite growing up without a father, were hoping that the courthouse rumblings about the former prosecutor weren't true. He was an inspiration to youths who in 1991 at the age of 18 met President George H. W. Bush in the Oval Office and was also honored at a Congressional breakfast.
But yesterday, the 34-year-old Methuen resident was named by state Attorney General Martha Coakley's office as one of seven people indicted by an Essex County Grand Jury as part of a conspiracy to stage phony accidents to defraud insurance companies.
Efforts to reach De La Cruz for comment were unsuccessful. He did not return telephone calls left at his Lawrence law office. His residential number was disconnected.
De La Cruz was charged with five counts of auto insurance fraud, five counts of larceny over $250, four counts of attempted larceny over $250, four counts of conspiracy to commit auto insurance fraud and four counts of conspiracy to commit larceny. De La Cruz has been an attorney since January 1999.
The indictments stem from an investigation initiated more than 18 months ago by the attorney general's office, working with detectives of the city's auto insurance fraud task force and investigators of the Insurance Fraud Bureau of Massachusetts. That investigation focused on four separate staged crashes that occurred between October 2002 and February 2003.
Also indicted were:
Andover Attorney James C. Hyde, 56, of Boxford. A partner of the Andover law firm of Berger and Hyde, he was charged with two counts of auto insurance fraud, two counts of larceny over $250, two counts of attempted larceny over $250, two counts of conspiracy to commit auto insurance fraud and two counts conspiracy to commit larceny.
North Andover chiropractic clinic operator Michael Kaplan, 46, of Hampstead, N.H. He is charged with three counts of auto insurance fraud, two counts of larceny over $250, two counts of attempted larceny over $250, three counts of conspiracy to commit auto insurance fraud and three counts of conspiracy to commit larceny. The task force has previously charged several former employees of Kaplan Chiropractic Corp. on Sutton Street in North Andover with auto insurance fraud.
Haverhill chiropractic clinic operator Troy L. Wheelwright, 40, of Amesbury. He is charged with two counts of auto insurance fraud, two counts of larceny over $250, two counts of attempted larceny over $250, two counts of conspiracy to commit auto insurance fraud and two counts to commit larceny.
Investigators say Wheelwright once worked for Kaplan, before setting out on his own at the clinic set up at 606 Broadway in Haverhill
Leo M. Lopez, 28, of Lawrence, a former Haverhill resident, was described by investigators as "a big-time runner" who got paid by area lawyers and chiropractors to recruit victims of phony crashes. He was charged with five counts of insurance fraud, three counts of attempted larceny over $250, three counts of conspiracy to commit auto insurance fraud, three counts to commit larceny and two counts of larceny over $200. He allegedly set up numerous staged accidents in the area. Lopez, who also worked as a van driver and chiropractic assistant for Kaplan's clinic, has been charged previously in connection with several task force cases.
Omar Castillo, 35, of Methuen, a former van driver for Kaplan, was charged with auto insurance fraud, larceny over $250, conspiracy to commit auto insurance fraud and conspiracy to commit larceny.
Josue Jerez, 28, of Lawrence. Jerez has been described by fraud investigators as an associate of Lopez. He was charged with two counts of auto insurance fraud, two counts of attempted larceny over $250, conspiracy to commit auto insurance fraud and conspiracy to commit larceny.
None of those implicated in the fraud conspiracy and named in indictments returned late Friday by a grand jury that had convened in Salem could be reached for comment. A spokesman for the attorney general's office said no arraignment dates had yet been scheduled.
The attorney general's office initiated its joint probe with Lawrence police and the fraud bureau in September 2006 after a number of accidents handled by the two lawyers and the two chiropractic clinics caught their eye.
Investigators say Lopez, Jerez and Castillo recruited individuals to participate in staged accidents in the Lawrence area. The accidents never actually happened. But the three men would damage the vehicles to make them look like they had been involved in crashes.
The two chiropractors and the two attorneys are accused of knowingly employing Lopez and Castillo to recruit claimants for the staged accidents. Both "runners" would then direct the phony passengers to the chiropractors and attorneys for unnecessary medical treatment and legal representation for accidents that never occurred. Both the attorneys and chiropractors submitted fraudulent injury claims and letters to the claimants' insurance companies seeking payment for injuries they allegedly received in the staged accidents, investigators said.
Court documents obtained by The Eagle-Tribune and used as the basis of a story a year ago showed that the two offices and the two chiropractic clinics had been named in a second grand jury investigation initiated by District Attorney Jonathan W. Blodgett's office.
The first grand jury probe instigated by the district attorney culminated in the indictments of 16 people — including three lawyers and four chiropractors — who were charged with being part of a Lawrence-based "network of fraud" that helped drive up auto insurance rates across the state. That probe focused on a cottage industry of crime where middlemen known as "runners" get paid to steer accident victims to lawyers and chiropractors for cash.
In an interview with The Eagle-Tribune several years ago, De La Cruz recalled that his desire to become a lawyer was born in the hallways of Lawrence District Court, where as an 11-year-old he watched his mother, Bienvenida Graciano, struggle with family legal problems.
"I saw the respect lawyers demanded and got," he said, "and I saw my mother in a vulnerable position."
One of the prominent people who took a deep interest in De La Cruz was retired Judge John E. Fenton Jr. of Andover, former dean of Suffolk University Law School. Judge Fenton became a mentor and helped De La Cruz as he studied for his bar exam.
"I think the indictments demonstrate that the battle against auto insurance fraud is far from over," said Lawrence Police Chief John Romero, who assembled the fraud task force in the fall of 2003 after a 65-year-old great grandmother from Lawrence died in a staged crash that police said she helped plan to scam insurance companies.
"For years, people — including lawyers and chiropractors — have been profiting at the expense of the rate payers," Romero said. "Obviously, the attorney general is serious about stopping it."
Staff writer Jill Harmacinski contributed to this report.
