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N.J. truck repair shop at center of $2.7M insurance fraud scheme

The proprietor of a New Jersey truck restore store and eleven others are being charged with racketeering, insurance coverage fraud and theft by deception for his or her involvement in a plan, which resulted within the underpayment of $2.7 million in premiums in 2021, in line with the Warren County Prosecutor’s Office.

The store proprietor allowed numerous brokers and producers to listing his store’s handle because the garaging handle for roughly 170 trucking companies to assert that just about 400 vehicles had been being garaged on the premises when the premises might solely maintain round 30 automobiles. Insurer workers observed numerous functions for business trucking corporations claiming to storage automobiles on the identical handle. Surveillance substantiated that not one of the automobiles in query had been parked on the lot.

The investigation into the rip-off was performed by the Warren County Prosecutor’s Workplace, Sussex County Prosecutor’s Workplace and the New Jersey Automotive Insurance coverage Plan.

Insurance premiums are particularly low in that space, and the producers concerned would provide the car proprietor the choice of claiming that the automobiles had been garaged on the premises in query when quotes for the precise garaging handle had been expensive.

The insureds had been instructed they didn’t have to truly find the automobiles there, it was simply used for insurance coverage functions. In actuality, these automobiles could possibly be discovered as far-off as North Carolina and New York. Whereas the fees are for $2.7 million in underpaid premiums in 2021, a complete of $20 million has been underpaid in premiums since 2018.

“I’m extraordinarily pleased with the success of the joint Warren and Sussex Counties insurance coverage fraud investigation. The investigation resulted within the arrest of a dozen people whose actions had been costing the residents of New Jersey and Warren and Sussex Counties tens of millions of {dollars} a 12 months in elevated insurance coverage premiums,” Warren County Prosecutor James Pfeiffer mentioned in a launch. “It’s estimated that insurance coverage fraud prices customers $40 billion per 12 months leading to elevated insurance coverage premium prices to households of upwards of $700 yearly.”

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