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Press Release | NO. 2004-120

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Press Release # 120
Tuesday, November 9, 2004

New York City Police Commissioner Raymond W. Kelly, Kings County District Attorney Charles J. Hynes And New York State Insurance Department Superintendent Gregory V. Serio Announce The Arrest Of 24 Individuals In The Takedown Of An Automobile Insurance Fraud Operation With Ties To Organized Crime

New York City Police Commissioner Raymond W. Kelly, Kings Country District Attorney Charles J. Hynes and New York State Insurance Department Superintendent Gregory V. Serio announce the takedown of
"Operation Family Ties," which targeted an automobile insurance fraud ring operating from an auto salvage yard in Brooklyn. Officers from the Department's Auto Crime Division conducted the investigation over the course of the past three years and arrested a total of 24 individuals including three organized crime figures with ties to the Gambino and Bonanno crime families.

Commissioner Kelly said: "There is a direct correlation between individuals like the ones arrested today and the high cost of insurance for citizens of New York City. These criminals exploit the system for their own financial gain and leave the rest of us to cover the cost. The Department, working in conjunction with other agencies like the Kings County DA's office and the New York State Insurance Department, is determined to end this type of illegal activity."

"These criminals are ripping off their friends and neighbors as this kind of crime strikes in the pocketbooks of every person who pays for auto insurance," said Kings County District Attorney Charles J. Hynes. "I want to commend the NYPD Auto Crime Unit and my own Rackets Division for their selfless efforts on this case which involved scores of hours of wiretaps and surveillance work."

Superintendent Serio said: "The ongoing law enforcement crackdown against those who allegedly perpetrate auto insurance fraud is great news for honest consumers, who for too long have had to pay higher premiums to offset this type of criminal activity. I'm also proud of the substantive role the Insurance Department's Frauds Bureau was able to play during the course of this investigation with the New York City Police Department and the Brooklyn District Attorney's office."

The investigation began in late 2001 when officers identified Flatlands Auto Sales as a key component in numerous owner initiated insurance frauds. In this type of fraud, car owners voluntarily "give up" their car to individuals who dismantle the vehicle and sell the parts. Once the parts are sold and the hulk of the car destroyed, the owner reports the car stolen and collects a reimbursement from the insurance company.

The major goal of the investigation was to discover each level of the operation and who was involved. Among those arrested are the operators of the salvage yard, buyers of the stripped auto parts and sixteen individuals who owned high-end vehicles that were given up during the course of the investigation. The cars have an estimated value of $1.5 million.

Officers on this case analyzed records and information provided by the Department of Motor Vehicles, the National Insurance Crime Bureau, State Insurance Frauds Bureau, telephone companies and banking institutions. In addition, officers conducted a great deal of physical surveillance
which proved vital in connecting the players and pieces in this case.

The investigation is ongoing.

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