In 2002, the largest staged accident ring in the U.S. was uncovered in New York by Peter Smith, then an assistant district attorney on Long Island. Starting with a confession from a man arrested in a staged crash that seemed like an isolated case, Mr. Smith unravelled a web of insurance fraud that spanned more than 1,000 accidents. It was like nothing the insurance industry had ever seen before. Using a task force of local and federal police, Mr. Smith’s team was able to establish something more significant: The ring used a network of medical clinics to submit hundreds of claims a week to insurance companies, billing them for costly treatments that were never administered, from x-rays to acupuncture. The investigation led to the indictment of more than 400 people and 112 New York area medical corporations. The losses totalled more than $200-million, including $50-million for insurance giant State Farm. “For the first time, we were able to show how organized it was,” Mr. Smith said.
It was easy money for Harris Ahmed. All he had to do was find people willing to take part in a fake car accident.The man who approached him in Toronto about “doing accidents” told Mr. Ahmed he would get $1,000 cash for every passenger and driver he could recruit for the insurance scam. Each person would claim they were hurt in the crash.
Mr. Ahmed went right to work. A few weeks later, a car driven by one of his recruits collided with a Jaguar while driving through a north-Toronto suburb. The three people in the luxury car were also in on the plan, using vehicles purchased from a salvage yard.