The auto insurance scheme registered New York vehicles in Massachusetts to avoid premiums
The Northwestern District Attorney’s Office announced this week that grand juries in both Hampshire and Franklin Counties returned indictments against a 38-member auto insurance fraud ring operating out of both Western Mass. and the Metropolitan New York City area.
“These indictments are the by-product of the Northwestern District Attorney’s Office’s ongoing partnership with the Insurance Fraud Bureau, through which we continually strive to detect, investigate and prosecute those who cheat the system and raise insurance costs for all of us,” said District Attorney David E. Sullivan.
The announcement comes after a year-long joint investigation by the Insurance Fraud Bureau of Massachusetts, the Massachusetts State Police, the Northwestern District Attorney’s Office and the Department of Homeland Security. In 2013, the IFB first notified the Northwestern DA’s Office of the existence of this auto insurance fraud ring.
During the six years during which this scheme is alleged to have operated, hundreds of thousands of dollars in premium avoidance is alleged to have occurred.
According to the Northwestern DA’s office, the ring members participated in a scheme through which individuals, primarily based in the Metropolitan New York City area, used fraudulent addresses in Northampton, Easthampton and Greenfield in order to register and insure their vehicles in Massachusetts. By doing so, these individuals were able to substantially lower auto insurance premiums than they otherwise would have had to pay by registering their vehicles in New York and using their true residential addresses in New York City. The Northwestern DA estimates that hundreds of thousands of dollars in premium avoidance occurred as a result.
Nine of the indicted individuals were arraigned on Friday, August 22nd
In total, the Hampshire and Franklin Grand Juries charged with case returned a total of 289 indictments against the 38 members involved in the insurance fraud scheme. Of the 289, 138 of those indictments were returned against Lefen “Helen” Chen, 55 of Flushing, New York. Ms. Chen, the ring-leader, is alleged to have organized the entire scheme and to have accompanied individuals to various insurance agencies to assist them in completing their fraudulent insurance applications. On August 12th and 13th, 2014, Ms. Chen and eight other indicted individuals were arrested in New York with the assistance of the New York Police Department, the Massachusetts State Police, the Department of Homeland Security and the Queens District Attorney’s Office. The nine individuals arrested all waived extradition back to Massachusetts.