By Edward Mason
Staff writer
May 20, 2008 12:15 am BOSTON — Automobile insurance fraud in Lawrence and across Massachusetts has dropped dramatically since 2003, but law enforcement officials warn that tough economic times ahead could result in an uptick in faked accidents and arson for profit. In Lawrence, auto insurance claims in 2006 were $26 million less than in 2003, according to a new report by the Insurance Fraud Bureau of Massachusetts. Since Lawrence and area law enforcement officials formed the Lawrence insurance fraud task force in 2002, claims are down $31 million. The drop in overall claims is attributed to a reduction in fraudulent ones. The report, released yesterday at an insurance fraud summit of state and local law enforcement officials in Boston, also found that statewide there has been a $549 million reduction in auto insurance claims in 2006 compared with 2003. The 13 communities like Lawrence with fraud task forces saw claims drop by a total of $273 million compared with 2003. Daniel Johnston, executive director of the Insurance Fraud Bureau, said Lawrence has "hit a home run" and the state has made "amazing progress" reducing claims in the last five years. "There's been an awful lot accomplished," Johnston said. Reducing fraud is important, Johnston said, because it affects what insurance companies charge customers. This year, rates for good drivers, on average, will go down 7.1 percent, after being slashed an average 11.7 percent the year before. "Consumers are getting the benefit," Johnston said. "That's the proof the way we're fighting fraud is working." But those accomplishments are under threat as the economy softens. Attorney General Martha Coakley, a summit attendee whose office prosecutes fraud cases, warned a fraud uptick is on the horizon. "I'm anticipating we may see more arson with the subprime crisis," Coakley said. "When times get tough, people look for ways to cut costs or supplement their income. That's all the more reason to keep a close eye on this." Essex County District Attorney Jonathan Blodgett, another attendee, also expects a rise in auto fraud and arson. "I think there'll be a terrific pull and motivation to commit more horrific crimes to rip off the public," said Blodgett , whose office also has prosecuted insurance fraud. Johnston said there were many signs the current fraud crackdown is working, including that injuries reported in accidents overall have fallen. In Lawrence, there were 140 injuries per 100 accidents in 2003. That fell to 49 per 100 in 2007. Statewide, there were 40 injuries per 100 accidents in 2003. That dropped to 29 per 100 in 2007. And the crackdown on fraud has forced medical professionals complicit in faking accidents to pick up and leave Lawrence. In 2003, there were more than $9 million in claims attached to 22 chiropractors and physical therapists, all of whom billed insurers more than $100,000 a year. By 2007, there were just four chiropractors and no physical therapists who billed more than $100,000. They were involved in claims totaling just $858,000. The summit convened in the wake of the latest charge of auto insurance fraud in Lawrence. Ramon Espinal, 44, of Lawrence was one of six people charged recently in connection with a two-car crash on June 22, 2003. Espinal allegedly received $3,000 for his part in two crashes in 2003. He is among 315 people charged as a result of Lawrence's crackdown on fake crashes and claims, after the death of a 65-year-old grandmother in a staged accident four and a half years ago. "We've had great success in Lawrence," Blodgett said, "but now is not the time to rest on our laurels."
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