ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, June 4, 1996 TAG: 9606040068
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: MICHAEL CROAN STAFF WRITER
Thirty-six Buchanan County residents have been indicted on various federal charges in what prosecutors say was an elaborate scheme of auto insurance fraud.
According to U.S. Attorney Robert Crouch, the defendants staged car accidents and claimed injuries, often receiving compensation for pain and suffering.
"They were running cars together, running them off hillsides ... none of which involved injuries," Crouch said. "Evidence suggests that the scheme had been ongoing for several years."
Although the indictments were handed down May 23, they were sealed until Monday, when the Buchanan County Sheriff's Office, state police and the FBI began making arrests in the Guesses Fork community. So far, 14 of the 36 have been arrested, but Crouch said he does not anticipate any problem in finding the rest.
"A couple of those arrested [Monday] heard about it and turned themselves in," he said.
Crouch said the arrests are the result of a yearlong investigation by state police and the FBI, and are the first made in Western Virginia under "Sudden Impact," a nationwide FBI program aimed at cracking down on fraud.
Insurance investigators brought the case to the attention of state police when they noticed "an inordinate amount of activity for a small area," Crouch said. "That raised their antenna."
One defendant made nine claims from July 1990 to September 1993.
It appears that many of the defendants are related, possibly including two or three families.
"That's our belief, though I couldn't really tell you who's related to whom and in what way," Crouch said.
Prosecutors estimate that insurance companies paid at least $200,000 to the defendants.
"We consider fraud of any type to be among our priorities," Crouch said. "Ultimately, it costs the consumer. The $200,000 paid to [the defendants] is $200,000 that came out of the pocket of the insurance premium payers for those particular companies."
If convicted on all counts, the defendants face imprisonment for five to 45 years and fines ranging from $250,000 to $2,250,000.
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