N.J. Investigation Targets Fake Police Reports, Claims; 39 People Hit with Indictments

New Jersey Attorney General Peter Harvey announced that the Division of Criminal Justice – Office of Insurance Fraud Prosecutor has obtained criminal indictments against 39 individuals from the Essex County area on charges they participated in an extensive insurance fraud scheme designed to collect tens of thousands of dollars by filing bogus insurance claims based on fake police reports.

The extensive insurance fraud scam was reportedly headed by a former East Orange police officer and included a corrupt lawyer and dozens of individuals acting either as “runners” or “injured” accident victims.

Harvey said that the multi-year investigation and prosecution of what has become known as the “Phillip Major” case resulted in the enactment of New Jersey’s “runners” law which criminalized the use of individuals employed or paid by medical professionals or lawyers to recruit people to submit fraudulent insurance claims.

According to Vaughn McKoy, director,. Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden Brown, the 39 defendants were charged in four separate State Grand Jury indictments with second degree conspiracy to commit official misconduct and theft by deception. A second degree crime carries a maximum penalty of up to ten years in state prison and a fine of up to $150,000. Additionally, the defendants face possible civil insurance fraud fines pursuant to the Insurance Fraud Prevention Act. (A list of the defendants charged in the State Grand Jury indictments is attached.)

McKoy said the indictments allege that from June, 1995 through October, 1999, the 39 individuals participated in the wide-ranging and extensive insurance fraud scheme by agreeing to file false police reports stating that they had been involved in automobile accidents when, in fact, they had not been involved in any motor vehicle accidents.

The fraudulent police accidents reports were reportedly written by former East Orange Police Officer Philip Major during 1995 and 1996. The indictments charge that at more than a dozen fake automobile accident reports were prepared and used to support fraudulent automobile insurance Personal Injury Protection (PIP) and bodily injury claims submitted to various insurance companies. It is charged that by falsifying police reports and submitting the fake reports to the insurance companies, the scheme attempted to obtain more than $900,000 in payments for purported medical treatments and personal injury claims.

Gooden Brown noted that more than 20 individuals, including a former police officer and a lawyer, along with other participants, have been prosecuted for their roles in the insurance fraud scam. The principal defendant was previously identified as Phillip Major, 37, Maplewood, Essex County. Major, a former East Orange police officer and admitted “runner,” pled guilty to conspiracy and two counts of official misconduct on Sept. 29, 1999 before Essex County Superior Court Judge Joseph A. Falcone.

In pleading guilty, Major reportedly admitted that he prepared 16 false police automobile accident reports so that approximately 60 insurance claims could be submitted to insurance companies for Personal Injury Protection (PIP), property damage, and non-economic losses arising from bodily injuries purportedly sustained in the automobile accidents. Major also admitted that he attempted to bribe another police officer for additional police accident report information in order to recruit patients to submit insurance claims. Major is scheduled to be sentenced by Essex County Superior Court Judge Donald Volkert on Dec. 10, 2004.

As part of the investigation, Mark Bendet, a now-disbarred attorney who formerly practiced law in Passaic County, was sentenced to 13 years in state prison after pleading guilty to charges of conspiracy and bribery.

In pleading guilty on May 16, 2001, Bendet reportedly admitted that he, his estranged wife Imelda Toquero, and Major, paid bribe money for police automobile accident reports in order to submit fraudulent Personal Injury Protection (PIP) claims to various insurance companies. On March 2, 2001, Toquero pleaded guilty, reportedly admitting that she paid Major for police reports. Toquero was sentenced on Aug. 16, 2001 to 364 days in county jail.

The indictment was handed up to Mercer County Superior Court Judge Neil Shuster on Sept. 21. The case will be assigned to the Essex County Superior Court for trial. The defendants will be ordered to appear in Court for arraignment and bail.