The Dirty World of Staged Trucking Accidents – And How to Protect Your Fleet
On November 10, 2020, a New Orleans personal injury attorney, Danny Patrick Keating, Jr. became the 33rd defendant charged in an ongoing investigation by the United States Attorney for the Eastern District of Louisiana into crime rings that stage accidents with tractor-trailers and commercial carriers. https://www.insurancejournal.com/news/southcentral/2020/11/10/590210.htm.
Charged with conspiracy to commit mail and wire fraud, Keating, if convicted, faces a maximum term of five years imprisonment and a fine of $250,000.00. The indictment states that he and other unidentified attorneys (referenced in the indictment only as Attorneys A, B, and C) paid $1,000.00 per passenger for accidents involving tractor-trailers and $500.00 per passenger for accidents not involving tractor-trailers. The indictment further alleges that Keating paid for thirty-one (31) illegally staged tractor-trailer accidents, representing 77 plaintiffs involved in the 31 staged accidents, resulting in approximately $1,500,000.00 in settlements, from which Keating allegedly kept approximately $358,000.00 in attorney’s fees. The United States Attorney emphasized that indictments are merely charges and that the guilt of any defendant must be proven beyond a reasonable doubt. https://www.justice.gov/usao-edla/pr/new-orleans-personal-injury-attorney-indicted-connection-staged-accident-probe.
The ongoing federal investigation into staged accidents has resulted in charges against 33 people over the past year for intentionally staging automobile accidents with tractor-trailers and other commercial carriers in order to defraud trucking companies and insurance companies. Id. To date, eleven of the 33 indicted defendants have tendered guilty pleas in federal court. https://www.insurancejournal.com/news/southcentral/2020/11/10/590210.htm. Four of the defendants accused of staging a tractor-trailer accident settled for $4.7 million. https://www.fox8live.com/2020/10/16/four-more-indicted-staged-accident-scene-resulting-million-settlement/
The indictments include multiple federal counts including conspiracy to commit mail fraud in violation of Title 18, U.S.C. § 371 and mail fraud in violation of Title 18, U.S.C. § 1341. .https://www.justice.gov/usao-edla/pr/twenty-eight-now-charged-federal-probe-staging-automobile-accidents; https://www.wwltv.com/article/news/investigations/mike-perlstein/new-orleans-attorney-accused-for-staging-crash-with-18-wheeler/289-5b407a9b-ce22-4db4-8d80-9f0dbd95051d. The indictments allege that some of the defendants were so-called “slammers,” i.e. individuals who intentionally caused accidents. Id. Other defendants facing charges include passengers in vehicles allegedly used to stage accidents. Id
The criminal indictments state that the so-called “slammers” target tractor-trailers that are changing lanes in order to cause an accident by striking a tractor-trailer in its blind spot, using the slammer vehicle. Id. The accidents are usually staged at night to avoid witnesses. After a staged accident, the slammer usually exits the slammer vehicle from the passenger side in order to avoid being seen. Id. The remaining passengers then call 911 and one of the passengers falsely claims to have been the driver at the time of the staged accident. Id.
The indictments state that the staged accident cases were referred to specific attorney(s) and that the attorney(s) paid defendants to stage accidents. https://www.wwltv.com/article/news/investigations/mike-perlstein/new-orleans-attorney-accused-for-staging-crash-with-18-wheeler/289-5b407a9b-ce22-4db4-8d80-9f0dbd95051d. One indictment states that defendants “were purportedly treated by doctors who are known to the Grand Jury at the direction of Attorney A” and that one defendant had neck surgery “because Attorney A told her she would get more money through the lawsuit if she had the surgery.” Id.
Last month, one of the indicted defendants charged with staging over 50 accidents, Cornelius Garrison (“Garrison”), was shot and killed in his apartment on September 24, 2020, less than two weeks before he was scheduled to be arraigned on October 5, 2020. https://www.wwltv.com/article/news/investigations/new-orleans-man-suspected-of-staging-50-car-crashes-shot-and-killed-days-after-indictment/289-39aad390-d652-4673-9fb3-a19fcd8943f4.
Prior to his murder, Garrison allegedly had been cooperating with the F.B.I. and the United States Attorney’s office. https://www.nola.com/news/crime_police/article_e489aa3a-feb2-11ea-be7c-6f14f6de9f17.html. Sources familiar with the case, who spoke with the press on the condition of anonymity, said investigators were examining the possibility that his killing was a hit meant to silence a witness. Id. Notably, Garrison was the third “slammer” involved in the federal investigation into staged accidents to die. Id.
Harry Rosenberg, a former United States Attorney, said that he expects the pace of the federal investigation will ramp up in the wake of the Garrison murder: “There will be pressure on the part of the Justice Department to devote more resources to investigate the murder. . . . There are now issues of obstruction of justice and the potential murder of a federal witness.” Rosenberg also noted that staged accidents are not new, but that the targets switched from elderly car drivers, to commercial trucks: “These groups have moved to target large trucks because there are like whales with dollar signs on them.” https://www.freightwaves.com/news/new-orleans-man-just-indicted-in-staged-accident-scheme-shot-to-death (emphasis added).
Southeastern Motor Freight, Inc. filed a civil lawsuit alleging state and federal racketeering claims, as well as fraud and conspiracy against two of the indicted defendants. The lawsuit seeks treble damages and attorney’s fees paid out to settle prior personal injury litigation following a staged 2017 accident. https://www.courtlistener.com/recap/gov.uscourts.laed.247031/gov.uscourts.laed.247031.1.0_2.pdf.
The 2017 accident at issue involved a Southeastern Motor Freight tractor-trailer, a pickup and a Chevy Trailblazer. According to Southeastern Motor Freight’s complaint, dashcam footage from the tractor-trailer and surveillance footage from a nearby tire store show that the tractor-trailer entered the highway in the right lane prior to a bridge. As the tractor-trailer reached the top of the bridge, two vehicles were stopped in the right lane: a pickup with its hazard lights on was stopped behind the Trailblazer.
The Southeastern Motor Freight complaint states: “[t]here were no other vehicles stopped in front of these vehicles and no traffic to explain why they were stopped on the bridge.” Id. Southeastern Motor Freight’s driver changed into the center lane to go around the vehicles. As he was passing the Trailblazer, it began moving forward, following him. Video from the tire store shows the Trailblazer swerve to the right and rear-end the tractor-trailer. The impact caused damage to the passenger side of trailer and the driver’s side of the Trailblazer.
Southeastern Motor Freight alleges a “nearly identical” crash was staged at the same location nearly a week before and also that one of the defendants brought at least five similar lawsuits involving sideswipe collisions with tractor-trailers in the past eight years. The online court docket indicates that the United States Attorney’s Office in New Orleans moved to intervene in the Southeastern Motor Freight case. The motion was granted on September 28, 2020 and currently, by order of the court, the case is indefinitely stayed, “pending resolution of criminal proceedings.”
How to protect your fleet?
Chance McNeely, executive director of the Louisiana Motor Transport Association, says that in fake accident cases, the deck typically is stacked against trucking companies. He advises what many trucking companies are already doing, putting cameras on their trucks. “Self-defense is our best approach.” https://www.ttnews.com/articles/spotter-2017-staged-accidents-new-orleans-pleads-guilty.
Staged accidents are not just limited to Louisiana of course. The National Insurance Crime Bureau (NICB) has uncovered sophisticated, multi-state rings in Florida, New York and California that included staged accident participants as well as doctors, chiropractors, lawyers and even body shop owners that profited from the insurance scam. https://www.bankrate.com/finance/insurance/6-tips-for-avoiding-a-staged-accident-1.aspx
Mary Aftanas, Director of P&C Investigations with NICB, believes the crime rings learn from each other, even if there is no evidence that the crime rings are connected: “We did a huge PSA effort with the Nevada Trucking Association in Las Vegas because unfortunately, everybody was [abruptly stopping] right in front of those big rigs. Why? Because policy limits are higher [in Nevada]. However, the risk could lead to death." https://www.fleetowner.com/safety/article/21119301/truck-crash-fraud-everyone-may-be-in-on-it. She noted that New Orleans scammers hit the sides of a truck instead of stopping in front: “I think they learned from each other. I don't want to say it isn't possible [that they're connected]. Everything is possible. . . ." She also noted the groups do their homework and know which carriers are more willing to settle and which ones do not. They also learn which carriers carry higher insurance policies.
Director Aftanas advises: "Do your due diligence and make sure all the facts are recorded correctly so you can make a good business decision [about settling or going to litigation]. Document the process, the driver, who the other driver was, how many occupants, what type of vehicle hit them. In some cases, we'll have a four-door car that's small and only four people can fit, but yet when the claim comes in, there are eight people."
What is our advice?
Be alert for accidents that fit the pattern. Suspicious accidents typically include multiple claimants in one vehicle, sideswipe allegations with tractor-trailers, minimal damage to either vehicle, and a tractor-trailer driver who is either unaware of or denies impact. The claimants’ vehicle is likely to contain multiple passengers who will all file medical claims in addition to a vehicle damage claim. Look for past history of similar claims by claimants and/or evidence of past insurance fraud.
In order to avoid becoming a victim of a staged accident, it is critical for your driver to thoroughly photograph all vehicles after any accident – even if the driver is certain there was no impact. Your driver should pay special attention to the number of people in the other vehicle and any damage (pre-existing or otherwise) to all vehicles. In addition to noting any potential witnesses, your driver should look for any surrounding surveillance cameras that may have captured additional footage (for example, the video from the nearby tire store in the Southeastern Motor Freight case).
If you suspect fraud, start the conversation early with your carrier and counsel. If the accident fits the pattern, it may be worthwhile to spend the money to investigate rather than look for a quick settlement. Bear in mind as well that multiple claims arising out of the same staged accident, even if they can be settled for small amounts, can have a big adverse impact on your insurance renewal premiums.