45 Indicted for Insurer Fraud

NEW YORK — Manhattan prosecutors said Tuesday that 45 people have been indicted in one of the largest casualty-insurance fraud cases of its kind ever brought in the United States.

The defendants allegedly set up a “full-service” scheme in which they helped set numerous fires in New York’s garment district, filed more than $12 million worth of bogus claims to more than 20 insurance companies and arranged for crooked adjusters to evaluate the claims.

As a result, about $3 million in payments were made.

The New York Property Insurance Underwriters Assn. provided coverage for many of the claims. Among other insurance companies victimized in the scheme were Aetna Casualty & Surety Co., Continental Insurance Co. and Cigna Property & Casualty Co.

“The investigation revealed that this insurance fraud ring provided fully integrated services in the collection of fraudulent claims, including the sale of the insurance policies, the staging of the alleged loss and the evaluation and payment of the resultant claims,” said Robert Morgenthau, Manhattan district attorney, at a news conference.

He said the indictments, made public Tuesday, were the result of a 2 1/2-year investigation. Of the 45 charged, 14 were arrested in New Jersey on Tuesday morning.

Some members of the scheme allegedly operated small leather-goods manufacturing shops in the garment district. Fires were intentionally set in the shops that caused little damage but were sufficient to set off the sprinkler systems.

The shop owners then filed vastly inflated insurance claims for water damage and ruined inventory, Morgenthau said.

According to the indictment, a key member of the ring was Anthony Trapani, president of an insurance brokerage firm.