Transcript Partnering for Success:Toronto Police ServiceC.O. Bick College

Canadian Institute of Actuaries
2009 Annual Meeting
Garry Robertson
National Director, Investigations
Justin Murray
Regional Director Atlantic Canada
Agenda
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What is IBC?
Organized Auto Theft
Staged Collisions and Injury Rings
Current trends and issues
Questions
Insurance Bureau of Canada
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IBC represents nearly 95% of p & c home, car
and business insurers:
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Data Collection – mandatory submission of auto
claims data from insurers as required by Statistical
Plan; voluntary submission of claim data over and
above tombstone information
Marketing – Eg. Operation Red Nose; head rest,
Be Smart, Be Safe, D.U.M.B Car, Lock it or lose it
Insurance Bureau of Canada
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Advocates for Legislative Changes – Bill C-26
Motor Vehicle Theft – mandatory minimum
jail time-VIN tampering- trafficking exporting, led the charge for graduated
licensing.
Investigative Services – Organized auto theft
and Injury Rings
IBC investigative services
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Over 85 years claims investigative experience
Focus on organized insurance crime
Experts in vehicle identification, recovery and
repatriation
An investigative body
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IBC is a designated investigative body under
federal privacy legislation Personal
Information Protection and Electronic
Documents Act (PIPEDA)
As long a reasonable grounds exist, allows
IBC to collect, use and disclose personal
information, without consent, to detect and
prevent fraud or breach of a Canadian law.
[Schedule 1 Clause 4.3 Principle 3]
An Investigative Body
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7 (3) (d) (i) “…an organization may disclose
personal information without the knowledge or
consent of the individual only if the disclosure
is…made on the initiative of the organization
to an investigative body..and the organization
…has reasonable grounds to believe that the
information relates to a breach of an agreement
or a contravention of [law]”
An Investigative Body
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7 (5) “…an organization may disclose personal
information for purposes other than those for
which it was collected in any of the
circumstances set out in paragraphs (3)(a) to
(h.2)”
[including (3)(d)(i)]
Why people commit insurance crime
The insurance crime equation:
The problem
Low
risk
High
reward
=
High costs
to society
Impact of insurance crime: 2007
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Auto theft costs Canadians over $1 billion per year
(including police, court costs, medical services, etc.)
Auto theft costs Canadian insurers $542 million per
year, or about $35 per auto insurance policy
IBC estimates that insurance crime is a $3 billion per
year industry
According to a study by the National Committee to
Reduce Auto Theft (1999-2001), because of auto
theft:
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80 people died
130 people seriously injured
Organized Auto Theft
Fate of a Stolen Vehicle
1.
2.
3.
4.
Used to commit a crime
Dismantled – chop shops
New identity – cloning/revinning
Exported
Laval Auto Seizure / Coup de filet à Laval
Safety and Security
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Auto theft supports organized crime and
terrorism
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Vehicle with Texas plates found in bomb factory
by American troops
Boston Globe reported that the FBI has found
dozens of vehicles used for bombings in Iraq
Hundreds of high-end stolen vehicles shipped to
Lebanon
Auto Theft for Export
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IBC estimates that 20,000-30,000 high-end
stolen vehicles exported from Canadian ports
each year
Average value per vehicle $40,000-$50,000.
Federal government taking positive steps to
address this safety and security issue
Repatriation
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Main goal is to intercept stolen vehicles before they
leave Canada.
Establish relations with foreign
customs, law enforcement
and justice.
Return vehicles from out of
country - Canadian cars in China,
Japan, Africa, South America, U.S. Middle East,
Europe.
Ceres Corp
(Fairview Cove)
National Gypsum Wharf
Richmond Terminals
(Mariner & Scotia)
DND
Dockyard
Grain Elevator
Ocean Terminals
Halterm
South End
Imperial Oil Wharves
Port of Halifax
Major Marine Terminals
Auto Port
Ports Project 2008
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Project to determine volume of stolen vehicles
exported through ports of Halifax and
Montreal
Partnered during pilot with Canada Border
Services Agency, RCMP and Montreal Police
Ports Project - Results
347 stolen vehicles recovered including
repatriations, worth $10 million
 112 more vehicles identified for possible
repatriation
 RCMP supporting permanent installation
of the ports project at all major ports
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AutoFind
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Over 7000 vehicles recovered.
Actual cash value over $30 million.
70% of vehicles recovered within 15
days
License plate reader technology.
Used to locate stolen vehicles.
Operating in Toronto, Hamilton and
Edmonton
Police operate the system and recover
the vehicles.
Street Sweeper
Questions
Staged Collisions
Staged auto collisions
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Deliberate collisions that involve willing and
possibly unwilling participants
Trends well known in Canada & US.
Costs to properly investigate can be expensive
and prohibitive
Types of staged collisions
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Phantom Vehicle (Hit and Run)
Swoop and Squat
Drive Down
Side Swipe
Paper Accident
Profit to players
Passengers:
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Pay: $500-$1,000 per person (X4)
Receive: Weekly IRBs - $400 X 104 weeks
Total exposure:
IRBs – Income replacement benefits
$41,600 x 4 = $166,400
Profit to players
Paralegal:
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Receives: $1,000-$1,500.00 (X4)
Potential profit: - $6,000, plus 20%-30% of
each client’s final settlement, and IRBs.
•
Law Society of Upper Canada establishing
licence requirements
Profit to players
Clinics:
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Treatment
Assessments:
 In-Home
 Work Site
 FAE
 Dental
 Psychological:
 Driver Evaluation
Total exposure
$10,000 x 4 = $40,000
$1,200 x 4
$1,200 x 4
$1,200 x 4
$1,500 x 4
$2,250 x 4
$1,300 x 4
= $4,800
= $4,800
= $4,800
= $6,000
= $9,000
= $5,200
$74,600
Impact of insurance crime
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Since the beginning of the Injury Rings Unit,
we have investigated 125 projects
Majority involve staged collisions
Recent project is estimated to have cost
insurers $5.0 million
Funds generated support guns, drugs and
terrorist activities
Project 92
How it was Discovered
 Adjusting a Claim
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Identified oddities in one collision
Recognized identical characteristics in a second collision
– Same tow truck, similar accident location, same vehicle brand
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Discovered a third collision with the same characteristics
Referred to Special Investigation Unit
Additional 9 claims identified that fit the same fraud
indicators
Brought to IBC and developed through the liaison program
to involve multiple insurers
Project 92
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The Scheme
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Vehicles that were involved in previous collisions
were purchased from a Salvage Dealer
Vehicles re-registered using false documentation
Insurers believe they insure a re-built vehicle
Vehicles involved in subsequent collision where
property damage and injury claims are made
Project 92
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Who is involved?
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A car dealer with a license to purchase the salvage
and record the sale of the vehicle when it was
purported to be “Rebuilt”
A mechanic qualified to write a Structural Integrity
Certificate and Safety Standards Certificate
Tow Truck Operators to tow the wrecks to the
CRC and then to the body shop
Body shop mechanics who submitted phony
invoices for repairs
Project 92
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Who is involved (con’t)?
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Drivers and passengers willing to report an
accident and make a claim
Clinics prepared to submit invoices for treatment
which was never given
Someone to organize all the people and make the
events happen
Project 92
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Additional 12 collisions identified. Charges
are before the courts, in various stages of
prosecution
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8 guilty pleas to date
Sentences typically include house arrest from 6
months to 2 years followed by probation, license
suspension for minimum of 1 year and restitution
Insurance payments totaling close to $3.0 M
Increased Awareness
Police
 2007 Accident #28
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Initially some resistance from the police in accepting that
the collision was an orchestrated, organized event involving
multiple players
First confession obtained supported the documentary
evidence and cemented the concept of a staged collision
2009
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Officers identifying red flags at the scene of staged
collisions
Notifying Insurance Bureau of Canada
Increased Awareness
Crown Prosecutors
 2009
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Project 92 currently has about 200 charges being
navigated through the Scarborough Court System
Charges are all related and as a result, two
dedicated prosecutors have been assigned
Crown recognizes the serious threat to safety and
the impact on many public institutions
Increased Awareness
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Accident #34 is a good example of a staged
collision that demonstrates the involvement of
organized crime and the threat to public safety.
Recent Trends
Staged Auto Collisions
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Intentional collisions to obtain benefits through the
Statutory Accident Benefits Schedule, or through
Bodily Injury Tort
Rings involving PD only – increase business to
shops
Obtaining coverage for uncovered losses/owner
Referrals and Kickbacks
– Tow truck operator involvement
– Professionals
Rehabilitation Centre Crime
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Billing for services not provided
Treating for more than injury warrants
Assistive devices
Double invoicing
Assessments
– Double assessments
– Break out of assessment components
– Multiple assessments
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Identity Theft
Employment Fraud
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Falsifying employment documentation to
obtain Income Replacement Benefits
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Claims Forms
Cancelled cheques
T4 slips
record of employment
Double dipping
What Can Insurer Do?
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Obtain Statements – be detailed, ask questions
Compare claimants signatures
Contact the doctor or other practitioner
Send your client copies of the claim forms
Send audit letters summarizing payouts
Communicate with other insurers if dealing
with multiple occupants
Report insurance crime. Take the time.
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IBC receives tip via
e-mail or telephone
IBC searches for organized
activity
1 877 IBC TIPS
www.ibc.ca
IBC contacts
Garry Robertson
National Director, Investigations
E-Mail: [email protected]
Justin Murray
Regional Director – Atlantic Canada
E-Mail: [email protected]
www.ibc.ca