Alleged crash insurance scam ring busted

(2/05/07 - KTRK/HOUSTON) (KTRK) -- You see accidents on Houston's streets all the time. We've learned that a Houston doctor and some attorneys are accused of causing traffic accidents to make money.

Police say the doctor and attorneys were part of a scam run by at least two gangs. So far, police have arrested 10 people and are looking for three more. As the search for suspects continues, the expense of this kind of scam costs everyone.

"You know it's not all about graffiti and drive by shootings and things of that nature. They're out to make money," said Captain Mike Graham of the Houston Police Department.

Money in gang members' pockets is exactly what police say motivated a fraud ring that cost insurance companies thousands of dollars.

"Moving narcotics and staging these types of accidents was easy money for these guys," said Captain Graham.

Since 2003, police suspect about $500,000 flowed into the pockets of gang members, a Houston doctor and two local lawyers. The group allegedly got the cash by staging accidents.

"We would have a controlled accident where the gang members would actually drive the cars into each other," said Captain Graham.

After the accident, police say the gang members got the two lawyers and Michael Koris, a local chiropractor, involved. Undercover HPD officers infiltrated the group in late 2005.

"Our undercover folks were then seen by a doctor and then attorneys who were involved in this case and then the undercover officers for their role in this were paid in money cocaine or both," said Captain Graham.

Staging controlled accidents is becoming big businesses for well organized gangs. Houston is listed third in the nation for cities with the most staged accidents. It's a huge thorn in the insurance industry's side.

"Insurance fraud in general is a $30 billion a year industry," said Louis Campbell of the National Insurance Crime Bureau.

That's a big cost insurance companies pass on to consumers.

"It costs the average consumer about $250 a year in average premiums," said Campbell.

A high price everybody pays for increasingly organized and sophisticated criminal gangs.

Police are still searching for three suspects -- Fancisco Diaz, Victoria Martinez, and Francisco Tapia Jr. Like those already arrested, they will likely be charged with engaging in organized criminal activity.

Anyone with information is asked to call Crime Stoppers at 713-222-TIPS.
(Copyright © 2007, KTRK-TV)

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