Brooklyn-Based Fraud Ring Stole Over $120K from Insurance Carriers by Submitting Fake Accident Claims for High-End Vehicles
NEW YORK – Attorney General Letitia James today announced the convictions of six individuals for their participation in a sophisticated auto insurance fraud scheme, in which the defendants cheated insurance carriers out of over $120,000 by submitting fake property damage claims for high-end vehicles.
“This scheme was a brazen attempt to game the insurance system for profit,” said Attorney General Letitia James. “When individuals organize to commit insurance fraud, all New York consumers pay the cost. My office remains committed to rooting out fraud of any kind, and this is no exception.”
The following defendants pleaded guilty in Kings County Supreme Court for their roles in the scheme:
- Carlington Haye, age 37, of Kings County, New York
- Keon Cole, age 35, of Kings County, New York
- Theresa King, age 28, of Kings County, New York
- Mkada Beach, age 38, of Kings County, New York
- Dexter Karl, age 29, of Kings County, New York
- Omari Brown., age 24, of Kings County, New York
According to the Attorney General’s indictment and statements made by prosecutors, between January 2014 and September 2015, members of this insurance fraud ring conspired to submit 11 fake property damage claims, which included multiple false representations, including the manner in which car accidents and purported damages occurred. The defendants also resubmitted claims for the same vehicles with pre-existing damages multiple times. In order to maximize insurance payments, the defendants utilized high-end vehicles, including a Lexus, BMW, Audi, Mercedes, and a Bentley. In furtherance of their scheme, the defendants also used the stolen identity of a United States service member in three of the fake claims.
The defendants received payments ranging from $5,000 to over $20,000 for their fake property damage claims, and cashed insurance checks at two Pay-O-Matic check cashing branches in Kings County, New York. In total, the defendants fraudulently obtained a total of over $120,000 in insurance payments for their counterfeit claims.
The Attorney General’s 42-count indictment, filed in Kings County Supreme Court on June 2, 2017, charged the defendants with Insurance Fraud in the Second Degree (a class C felony), Insurance Fraud in the Third Degree (a class D felony), Identity Theft in First Degree (a class D felony), Grand Larceny in the Third Degree (a class D felony), Falsifying Business Records in the First Degree (a class E felony), Scheme to Defraud in the First Degree (a class E felony) and Conspiracy in the Fifth Degree (a class A misdemeanor).
All six defendants charged pleaded guilty to criminal charges. Defendant Teresa King pleaded guilty to Insurance Fraud in the Fourth Degree, a Class E felony, and was sentenced to 1 year in jail. Defendant Carlington Haye pleaded guilty to Insurance Fraud in the Second Degree, a Class C felony, as part of the plea will serve 90 days in jail, will be sentenced to 5 years’ probation, and must pay over $120,000 in restitution. Defendant Keon Cole pleaded guilty to Insurance Fraud in the Third Degree, a Class D felony, and was sentenced to 30 days in jail, 5 years’ probation, and ordered to pay over $50,000 in restitution. Defendant Mkada Beach pleaded guilty to Insurance Fraud in the Fourth Degree and was sentenced to 5 years’ probation. Defendant Dexter Karl pleaded guilty to Insurance Fraud in the Fifth Degree, a Class A misdemeanor, and was sentenced to a conditional discharged and ordered to pay over $6,000 in restitution. Defendant Omari Brown pleaded guilty to Attempted Petit Larceny, a Class B misdemeanor, and was sentenced to a conditional discharge and also ordered to pay over $9,000 in restitution.
“The National Insurance Crime Bureau would like to applaud the staff of the New York State Attorney General’s Office for their continued efforts to combat insurance fraud in New York,” said Kevin Gallagher, Regional Director of the Northeast Region of the National Insurance Crime Bureau. “The cost of insurance fraud is shared by all consumers, and these convictions send a strong message to others who may be contemplating engaging in insurance fraud. We look forward to our continued partnership in combatting insurance fraud for all New Yorkers.”
These convictions are the culmination of a long-term investigation conducted by the Attorney General’s Insurance Fraud Unit. Attorney General James thanks the National Insurance Crime Bureau, New York State Department of Financial Services, New York State Department of Motor Vehicles, New York City Police Department, New York City Department of Finance Office of the City Register, and the Florida Highway Safety and Motor Vehicles for their invaluable assistance in this case. The Attorney General also thanks State Farm Insurance Co., GEICO Insurance Co., Nationwide Insurance Co., United Services Automobile Association, and Progressive Insurance for their valuable assistance.
The case is being prosecuted by Assistant Attorneys General Michael Hendrick and Senior Investigative Counsel Cheryl Lee of the Auto Insurance Fraud Unit, with the assistance of Supervising Legal Analyst Paul Strocko and Legal Analyst Samantha Wintner. The Auto Insurance Fraud Unit is led by Unit Chief Gabriel Tapalaga. The Criminal Enforcement and Financial Crimes Bureau is led by Deputy Bureau Chief Joseph D’Arrigo and Bureau Chief Stephanie Swenton. The Division of Criminal Justice is led by Chief Deputy Attorney General Jose Maldonado.
The case was investigated by Investigator Michael McNally, under the direction of Supervising Investigators Edward Keegan and Natalie Shifrin and Deputy Chief Leonard D’Alessandro. The Investigations Bureau is led by First Deputy Chief John Reidy.