Omar Castillo, age 38, of Methuen; James C. Hyde, age 59, of Boxford; and Michael H. Kaplan, age 49, of Hampstead, NH, were found guilty yesterday on charges of Motor Vehicle Insurance Fraud, including Larceny Over $250, and Attempted Larceny Over $250. The trial of the the conspirators began on April 11, 2010 and lasted a lengthy six weeks. Yesterday, after three days of deliberation, the Essex Superior Court jury returned a guilty verdict on all charges against the defendants.
In September 2006, a Leo Lopez was arrested in Georgia by authorities there in connection with this case. Lopez was subsequently indicted on multiple counts of motor vehicle insurance fraud, larceny and attempted larceny charges in connection with a wide ranging scheme to defraud insurance companies. On January 22, 2009, Lopez pled guilty to the indictments and was sentenced to nine months in the Essex County House of Correction.
An investigation into this matter determined that Lopez recruited individuals to participate in staged motor vehicle accidents in the Lawrence area. While the reported accidents never actually occurred, they were reported to insurance companies for the sole purpose of filing fraudulent bodily injury and/or property damage claims. Recruited participants would give their motor vehicles to Lopez, who would then damage the vehicles, making them appear to have been involved in motor vehicle accidents. As part of the scheme, Lopez sent these participants to specific chiropractors and attorneys who would then bill or seek reimbursement from the insurance companies.
Kaplan, a chiropractor with offices in North Andover, participated in the scheme by treating individuals involved in these staged accidents and then submitting fraudulent insurance claims. Hyde, an attorney who practiced in Andover, was also involved in the scheme. Kaplan and Hyde knowingly employed Lopez and Castillo to recruit claimants for these staged accidents. Lopez and Castillo then directed the recruits to Kaplan and Hyde for unnecessary medical treatment and legal representation for accidents that never occurred. Kaplan and Hyde submitted fraudulent injury claims and letters to the claimants’ insurance companies seeking payment for injuries they allegedly received in the staged accidents.
“In the midst of rising insurance costs, these men used their knowledge of the auto insurance system to knowingly defraud companies and make some fast cash,” AG Coakley said. “This is a serious crime that not only defrauded insurance companies, but it also hurts consumers financially by contributing to an increase in premiums.”
After the verdict, Essex Superior Court Judge Howard Whitehead sentenced James Hyde and Michael Kaplan to serve two and one half years in the Essex County House of Correction, followed by a five year probationary period, which will start upon the completion of their jail sentences. Castillo was also sentenced to two and a half years in the House of Correction, nine months to serve, with the balance suspended for a probationary period of five years.The defendants still have pending additional charges against them of Conspiracy to Commit Motor Vehicle Insurance Fraud, and Conspiracy to Commit Larceny, that will be scheduled for trial.
