Twelve people have been arrested in Los Angeles by the FBI and another seven are being sought in connection with an organized fraud ring that staged auto accidents to cheat insurance companies, authorities said.
Sam "Niko" Lahooti, the suspected head "capper," or person who orchestrated the accidents and recruited bogus victims to file claims, was among those arrested, officials said.
The alleged fraud ring also included two chiropractors who claimed to treat purported victims and then filed inflated medical bills, said Ronald L. Iden, special agent in charge of the FBI's white collar crime division in Los Angeles.
"They're responsible for hundreds of claims and millions of dollars annually," Iden said Thursday at a news conference.
FBI agents and Los Angeles police officers fanned out early Thursday throughout Southern California, Sacramento and Nevada to surprise suspects.
The dragnet was part of a long-term investigation dubbed "Operation Blown Engine."
Officials estimate that about one in five dollars in insurance payouts goes toward fraudulent and illegal claims.
Authorities and industry experts believe Los Angeles is the insurance fraud capital of the nation.
The suspects in the current cases engaged in mostly minor one-car accidents rather than the more serious and potentially dangerous multiple vehicle accidents. Most of the accidents detailed in a 57-page complaint involved vehicle occupants who claimed injuries after striking walls and other fixed objects.
In 1996, a family of three burned to death on Interstate 710, also known as the Long Beach Freeway, when their station wagon was crushed between two big-rigs and exploded.
Two men were sentenced to 11 years in prison after admitting to purposefully staging the accident for insurance money.
In that case, they slammed on the brakes so one of the trucks would crash into it.<
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