Merrimack Valley

More than 300 charged so far in auto insurance fraud crackdown

By Mark E. Vogler
Staff Writer
Published: April 22, 2008

LAWRENCE — A Lawrence resident working on an electrical engineering degree at the University of Massachusetts Dartmouth is among those charged in the latest case initiated by the city's auto insurance fraud task force.

Josue Jerez, 28, of 221 Water St., one of the eight people indicted by a grand jury called by the state attorney general's office, was also charged with four other people — including his sister — for a phony February 2003 crash that investigators said he helped set up.

The five people recently arrested for auto insurance fraud in connection with the accident along with this month's grand jury indictments increased to 301 the number of individuals who have been charged during the more than four-year crackdown on auto insurance fraud.

"When we started this back in the fall of 2003, we knew that auto insurance fraud was a cottage industry and we suspected there were hundreds of people involved in perpetrating this scam — costing insurance companies millions of dollars in phony claims that would inflate the costs of premiums for drivers all over the state," Lawrence Police Chief John Romero said.

"People thought this was going to be a free ride. The reality is that it wasn't a free ride for more than 300 people who paid the price," said Romero, who assembled the task force after a 65-year-old great grandmother from Lawrence died in a staged crash that police said she helped plan to scam an insurance company.

Because of the success in Lawrence, the Insurance Fraud Bureau of Massachusetts — a partner with Lawrence police detectives in the ongoing crackdown — has assembled nine other task forces covering 11 other cities in fraud-prone areas across the state.

"I had expected a few hundred arrests before we got started. So, no, I'm not surprised that we've surpassed 300. I suspect there will be a couple of hundred more arrests in the next couple of years," Romero said.

Romero said he wasn't surprised that a college student one semester short of graduation would get caught in the crackdown which has already led the arrests of a former police officer, a school teacher, a bank teller, housewives, several chiropractors and several lawyers.

In 2003 when claims were filed for a two-car crash in Dorchester, investigators said Jerez helped "runner" Leo Lopez set up a few, including that one.

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. Lopez, who was also indicted earlier this month by a grand jury instigated by the state attorney general's office, faces charges in connection with the accident.

Jerez was charged with conspiracy, filing a fraudulent auto insurance claim and attempted larceny.

Others who were charged include:

r Noris Jerez, 26, of 243 Water St., Lawrence, conspiracy, filing a fraudulent motor vehicle insurance claim and attempt to commit larceny of property.

r Serge John Frederiquea Jr., 33, 19 Strathmore Road, Methuen, conspiracy and filing a fraudulent motor vehicle insurance claim.

r Alberto "Superman" German, 29, 95 Oak St., Lawrence, conspiracy and filing a fraudulent motor vehicle claim.

r Rafael "DJ Lus" Rosario, Jr., 25, 17 Saxonia Ave., Lawrence, conspiracy, filing a fraudulent motor vehicle claim and attempt to commit larceny of property.

Amica Mutual, which insured one of the cars, denied a claim after a fraud investigator determined the crash was staged. Amica referred the case to the fraud bureau, which obtained confessions from people in both vehicles.

Last month, investigators of the fraud task force went to Jerez's dormitory at UMass-Dartmouth to question him. He eluded the investigators, but later turned himself in to Lawrence police.

The crash is one of four accidents that was the subject of the grand jury investigation which led to the indictments of Lawrence attorney Socrates De La Cruz, Andover attorney James Hyde, North Andover chiropractor Michael Kaplan and Haverhill chiropractor Troy Wheelwright.

Investigators said Jerez began the scam by deliberately damaging the front end of his girlfriend's car with the help of Lopez. Jerez and other participants in the scam later claimed the car had rear-ended another on the ramp to Interstate 93 North in Dorchester.