David E. Sullivan, the District Attorney for the Northwestern District announced that a Franklin County Grand Jury has returned 59 additional counts of insurance fraud, perjury and conspiracy against a total of ten defendants in connection with an insurance fraud ring operating both locally and in the metropolitan New York City area. The new indictments added new defendants to the existing 38 defendants who were previously indicted in August for operating in insurance fraud ring in Western Mass. and the Metropolitan New York City area. The August indictments were the subject of an article by Agency Checklist, “Indictments For 38-Member Insurance Fraud Ring In Western Mass.“
The auto insurance scheme registered New York vehicles in Massachusetts to avoid premiums
The new indictments relate essentially to the same alleged methods of obtaining reduced insurance premiums by primarily New York residents falsely swearing that they were residents of Massachusetts. A copy of the District. Attorney’s October 22 press release follows:
Alleged car insurance fraud ringleader to be arraigned on additional charges Oct. 29 in Greenfield
The indictments stem from the largest car insurance fraud investigation and prosecution in Western Massachusetts history, according to the Insurance Fraud Bureau (IFB) of Massachusetts, which notified the Northwestern District Attorney’s Office of the alleged insurance fraud scheme in 2013.
Lefen “Helen” Chen, 55, of Flushing, New York, was indicted on 29 counts of insurance fraud, perjury and conspiracy. She was previously indicted by Franklin and Hampshire Grand Juries on 138 similar charges, for a total of 167 counts currently pending against her. Chen was arraigned on her previous set of charges on Aug. 22, 2014, and ordered held on $100,000 cash bail. She is expected to be arraigned on the new charges on October 29, 2014.
The nine additional defendants were indicted on a total of 30 counts of insurance fraud, perjury and conspiracy, and will be summoned to court in December.
The most recent indictments, as well as 289 indictments returned in August against 38 other individuals, for a total of 48 defendants — 40 charged in Franklin County and 8 in Hampshire County — follow a year-long collaborative investigation by the IFB of Massachusetts, the Northwestern District Attorney’s Office, the Massachusetts State Police, the Department of Homeland Security, and the New York Police Department. Additional assistance was provided by the Special Investigations Units at Commerce Insurance, MetLife, Plymouth Rock Assurance and Liberty Mutual.
The scheme is alleged to have involved individuals primarily from the metropolitan New York City area who insured and registered their vehicles in Massachusetts by claiming to live at false or non-existent residential addresses in Northampton, Easthampton and Greenfield. By doing so, the involved individuals are alleged to have paid substantially lower premiums than they otherwise would have had they reported their true residential addresses in and around New York City. 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.
The IFB is dedicated to the systematic elimination of fraudulent insurance transactions. Authorized by an Act of the Massachusetts Legislature and signed into law in 1990, the IFB conducts criminal investigations and refers appropriate cases for criminal prosecution. It is funded by automobile and workers compensation insurers in Massachusetts. IFB and The NWDA have worked to reduce insurance fraud in the Northwestern district of Hampshire and Franklin Counties and the town of Athol.
