Leader of Massive Staged Car Accident Ring Sentenced on Mail Fraud, Money Laundering, and Structuring for Role in Staged Accident Fraud Scheme

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In their guilty pleas, the defendants admitted they and others would find individuals who owned automobiles and had car insurance from insurance companies that scheme participants preferred in order to participate in staged automobile accidents. In recorded conversations, the recruiters, co-defendants Franco Padron, Ross, Cintron, and Riofrio, have referred to the individuals whom they recruit as the “Perro” and the “Perra.” The “Perro” is the person who causes the staged accident; the “Perra” is the purported victim of the staged accident.

To execute the scheme, the recruiters seek out drivers and their friends/family members to participate because, under Florida’s “No Fault” insurance law, insurers must provide Personal Injury Protection (PIP) coverage of $10,000 per person. Thus, if the recruiter finds a Perro with a wife and two children and a Perra with two friends, for a total of seven participants, the maximum PIP benefit is $70,000. Once the recruiters found the participants, they coached the participants on how to perform the staged accident, what to say to the police officer who responded to the scene, and how to claim that they have been injured. Thereafter, the accident was staged. After impact, a police officer was called, and a police report was filed. After the staged accident, the Perro and Perra filed false claims with their insurance companies, alleging that they and their family members were injured.

The accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants filled out paperwork falsely asserting that they suffered injuries during the staged accident. The defendants advised the participants on how to fill out the paperwork and what to say if an insurance investigator interviewed them about their injuries or treatment. The staged accident participants were instructed to sign numerous blank treatment forms that would later be submitted indicating that they had visited the clinic on a number of separate occasions for treatment, although they may have visited the clinic only once or twice. During their visits, some staged accident participants received no treatment at all or may have received only a short exam or treatment from the chiropractic physician, licensed chiropractic assistant, or licensed massage therapist (LMT), but the paperwork completed by the LMTs and chiropractors indicated that a full and lengthy exam and treatment was given. Co-defendants Leon, Diaz, Bello, and Gonzalez are all LMTs who will lose their licenses due to the fraud convictions.

Co-defendants Franco Padron and Ross also admitted that, when converting the deposits of the mail fraud proceeds to cash, it was done in a way to avoid the $10,000 currency transaction reporting requirement—a requirement that was known to the co-defendants by virtue of prior bank notifications orally and in writing. Two of the co-defendants would write a series of checks, typically for $9,000 each, made payable to different individuals, including Franco Padron and Ross, that would be cashed on the same day or made payable to the same individual that would be cashed on successive days, even though there were sufficient funds available in the account to allow for a single check to be cashed. Often, co-defendants would go to the bank together to cash checks simultaneously, but each check would be written for less than the $10,000 currency transaction reporting amount.

The clinics involved in this scheme included Chiropractic Office of South Florida, located in Palm Springs, Florida; New York Medical and Rehab Center, located in Lake Clarke Shores, Florida; and Healthcare R Us in Palm Springs, Florida.

FBI press release link: click here