Toronto police, insurance investigators bust bogus car crash scam

Steve Mertl
National Affairs Contributor
Daily Brew

Police and insurance industry experts have exposed an elaborate scam that resulted in dozens of bogus auto-insurance claims costing upwards of $4 million.

Toronto Police dubbed the operation Project Whiplash, and working with the Insurance Bureau of Canada and Ontario's Financial Services Commission, launched predawn raids on 50 Toronto and area homes Thursday that netted 37 arrests and 130 charges.

"The numbers are staggering," Detective Sergeant Cameron Field of the Toronto Police financial crimes unit said in the National Post. "This was basically about staged motor-vehicle collisions, and then the ensuing health-insurance frauds."

Investigators allege the group was involved in faking or staging as many as 77 traffic accidents.

"People would agree to allow their names to be used as persons in a car that was allegedly hit," said Field.

"Then they would work with a number of bogus health clinics that we're alleging made fraudulent insurance claims, billing for work that was never done because the person had nothing wrong with them."

The Post reported a suspicious 2009 accident prompted police to launch their investigation.

Rick Dubin, the insurance bureau's vice-president of investigative services, told the Toronto Star the scam was well choreographed.

A recruiter working for the fraud ring would scout out potential participants at places like coffee shops, persuading them the plan was foolproof and lucrative. People were told where the accident was to happen, where to sit in the vehicle and what to tell police after the crash.

Det. Const. Kajamuganathan Kathiravelu told the Star most of those involved came from Toronto's Tamil community. Many could not speak English and police urged community members not to get involved in such scams, the Post said.

Besides elaborately staged accidents, police said some reported crashes never occurred at all.

The fraudsters allegedly forged medical documents to support injury claims for insurance payouts and compensation for non-existent physiotherapy treatments in clinics owned by some of the accused, as well as lost wages.

Dubin said in an insurance bureau news release that the industry takes such frauds very seriously.

"Insurance crime is not victimless," Dubin said. "The cost to everyone is reflected in health care, emergency services, court and insurance costs. Insurance criminals take money right out of your pocket - when they cheat, you pay."