T h e T r a n s p o r tat i o n L a w y e r
TLA Feature Articles and Case Notes
Personal Injury Fraud in the Transportation Industry Campbell T. Roper*
Insurance fraud is defined as deliberate deception against an insurance company or agent for the purpose of financial gain.1 Insurance fraud costs American consumers an estimated $80 billion per year2 with auto insurers losing at least $29 billion per year to these scams.3 The result? Everyday consumers are forced to cover for these losses, which account for 14% of all personal auto premiums.4 Our firm retained fraud expert Dennis Pompa to better understand the insurance fraud phenomenon and the best practices for defending against fraudulent schemes.5 Pompa has provided invaluable insight into common themes and red flags of personal injury fraud in the transportation industry. He has helped us understand the evidence needed to report fraud, has guided us through the ethical obligations in reporting fraud, and has informed us on specific strategies to combat insurance fraud. I had the honor of interviewing Pompa to further explore such topics in personal injury insurance fraud. This article, which highlights portions of the interview, explores questions and provides insight to transportation lawyers in the fight against the billion-dollar scam industry.
I. Identifying Fraud Cases While some insurance fraud claims are unmistakably apparent, many—if not most—walk a gray line. According to Pompa, most insurance fraud cases arise from a confusing collision that results in a swearing match between the claimant and the victim-driver. As such, knowing common characteristics and red flags is a necessary first step in identifying which cases emanate from fraud. The National Insurance Crime Bureau * Lorance Thompson, PC (Houston, TX)
describes the most common types of staged vehicle accidents: the “swoop and squat” or “panic stop,” which involve an intentional brake to cause a rear end collision; the “drive-down” or “wave-on” where a suspect “waves” the victim to proceed and then intentionally causes a collision; and the “sideswipe,” where a suspect drifts into the victim’s lane, “swipes” the victim’s vehicle, and then blames the victim for causing the contact.6 Additional types of staged accidents include: the classic “hit and run” or “phantom vehicle” accident, where the suspect blames the accident on an unknown vehicle or object; “backing” accidents, where the suspect causes a collision backing out of a driveway or parking space; and “paper” accidents, where the suspect fabricates an accident report for pre-existing damage.7 When asked which type of staged accident is most prevalent in the transportation industry, Pompa reported that the “sideswipe” is likely the most frequent culprit in his investigations, although the “drivedown” and “swoop and squat” are also regulars in fraud reports. Pompa explained that these types of staged accidents are popular because a fraudster can intentionally cause an accident in such a way that controverting evidence is essentially unavailable, and “it is your word against theirs when they file injury claims.” Pompa’s explanation is illustrated well by the recent New Orleans fraud scandal. Plaintiff’s Attorney Danny Keating, Jr. plead guilty in June 2021 to wire fraud and mail fraud conspiracy, admitting that he helped orchestrate numerous vehicle crashes into “big rigs.”8 As of June 17, 2021, the investigation has resulted in charges against thirty-three defendants, but Keating is the only lawyer to be charged thus far in
this “brazen scheme” whereby passengers willingly ram into tractor trailers.9 Keating admitted to carefully planning each staged crash, stating that he and Damian Labeaud, the so-called “slammer” responsible for carrying out the crash, would discuss how to limit evidence by changing locations of the staged accidents, varying the number of passengers, avoiding police investigations, and avoiding cameras.10 While Keating’s strategies align with Pompa’s experiences, Pompa further explained that uncovering fraud is still very much an oftentimes difficult case-by-case analysis. Red flags that may indicate insurance fraud, according to Pompa, include accidents that occur in larger metropolitan areas during the least trafficked time of day, which decreases the chance that there will be witnesses. Additionally, “there is usually an increase in cases during economic tough times, the suspect will rarely be driving a new car, and there will typically be numerous people in the car—sometimes people will even jump into the car after the accident. In sideswipe cases, the truck is almost always in the far right-hand lane because this prevents the truck from having any ability to avoid a collision,” Pompa said. “You really have to do your homework on each suspect,” Pompa said, narrowing his focus. “Claim history is often the biggest indicator. Multiple claims, especially in a short period of time, is telling. Then you ask, does that person have financial problems?
Transportation Lawyers Association • Canadian Transport Lawyers Association • October 2021, Vol. 23, No. 2
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