37 people were arrested this past Thursday in a multi-million dollar insurance scam that involved staged car accidents. All were charged under Ontario’s Insurance Act with submitting false invoices to insurers. Police discovered people were being approached and offered money to fill out paperwork indicating they were injured in car accidents and required insurance payments to cover medical/rehabilitation and lost wages.
This investigation which was dubbed Project Whiplash, began when police became suspicious about two individuals filing a car accident incident. That case led to convictions and opened to the door to other suspicious car accident claims and collisions.
The scam encompassed so far, four rehabilitation clinics as well as paralegals associated with these clinics. They are: the McCowan Rehabilitation Clinic, the Ontario Rehabilitation Clinic, the Physiotherapy Clinic, all in Scarborough; and the North York Health & Rehabilitation Centre.
The case so far has totalled $4 million in losses to State Farm Insurance alone. It’s not clear how much other companies were also affected.
In this scam, he said individuals of South Asian background would be sitting in a coffee shop and approach people, asking them if they want to make some east money and off they go. These individuals will then go to these paralegals and they would have them sit down and sign a bunch of blank forms.
The individual who signed the forms would then get paid for their signatures while the paralegals submit the claims to insurance. Documents were also signed at rehab clinics, but would receive no treatment and then the insurance company would get billed. Some claims involved names of chiropractors or other rehab professionals who either didn’t know or didn’t work at the clinics. The cycle keeps going on until the insurance company stops paying.
Police said the investigation is continuing into tow truck operators who brought in the vehicles involved in allegedly fraudulent claims and body shop operators who repaired them.
Fraud costs the Canadian insurance industry a $1.5-billion each year according to statistics from the Canadian Coalition against Insurance Fraud, and it accounts for 10 to 15 per cent of a law-abiding motorist’s annual premium.