Extensive Staged-Accident Scam in New Orleans

Editor’s Note: This post first appeared as NMA Weekly E-Newsletter #621 from December 2020.  If you would like to receive the weekly NMA E-Newsletter, subscribe today.

As of November 5th, 2020, 33 people have been charged in an elaborate staged-accident scam involving slammers, spotters, crooked lawyers, and doctors. All are accused of conspiring to bilk insurance companies and commercial carriers for damages. The local police and FBI investigations are ongoing and more people are expected to be indicted in the near future.

The anatomy of a far-reaching fraud scam like this takes time and coordination. Here are just some of the particulars in the New Orleans scheme.

The Slammer

As a slammer, Cornelius Garrison would drive (with passengers in the car) and intentionally cause accidents with big trucks and other commercial vehicles as they were changing lanes. He would then abandon the vehicle, have one of the passengers pretend to be the driver, call 911, and report the crash. This is called a jump-in, false-claim scam designed to initiate fraudulent medical claims.

One example took place in 2015 when Garrison drove a Dodge Avenger into a bus. According to the indictment, the settlement resulted in a $677,500 windfall, and Garrison’s cut was $80,000.

In September, Cornelius Garrison was shot to death four days after the US Attorney’s Office in New Orleans filed charges. He was accused of staging over 50 wrecks and was murdered amid reports that he had been cooperating with federal investigators. Police continue to investigate his death.

The Lawyer

In late October, personal injury attorney Danny Keating Jr. was indicted for participating in as many as 31 staged accidents. He was charged with one count of conspiracy to commit mail and wire fraud, for conspiring with alleged ringleader Damian Labeaud and others in a scheme to stage auto accidents intentionally. If convicted, Keating will face up to five years in prison and a $250,000 fine.

Labeaud would refer staged accidents to Keating and other as-of-yet-unnamed New Orleans personal injury attorneys. Like Keating, attorneys would receive $1000 per passenger for accidents with tractor-trailers and $500 involving other vehicles. Keating represented 77 plaintiffs in 31 staged accidents and settled 17 cases for approximately $1.5 million.

Credit: Yi Chen, CA

Overall Costs of Staged Scams

The FBI estimates that the cost of non-health insurance scams cost $40 billion annually. US families end up paying for this with an average cost of $400 to $700 more on insurance each year.

The extensive New Orleans staged accident scam is far from settled, and the number of people involved in the conspiracy is staggering. But staged accidents can happen anytime, anywhere, and sometimes with only a solo criminal driver.

Here are several examples of various road scams:

The Swoop and Squat

Variation 1: Two vehicles working together target an innocent driver with the first fraudster in front and the other pulling up alongside. The first fraudster brakes hard, and the innocent driver rear-ends the first car because they were blocked by the second.

Variation 2: Two vehicles working together target an innocent driver with one fraudster in front who is cut off by the second fraudster causing the first one to hard brake, and the innocent driver read-ends the car.

Variation 3: Same as Variation 2 except with only one fraudster who speeds up along the innocent driver, cuts in, and then brakes hard—the innocent driver cannot escape the rear-end collision.

The Panic Stop

This scenario is similar to the swoop and squat. The fraud car is in front often with several passengers who watch you drive. If you take your eyes off the road for a split-second, the fraud car slams on the brakes. Another rear-ender, and guess what—it’s your fault.

The Wave and Hit or the Drive Down

The fraudster signals with a wave or a headlight flash that it’s safe to proceed to an innocent driver trying to merge or change lanes. The criminal then sideswipes the car, denying later they ever signaled or waved. This fraud is also prevalent in parking lots.

The Sideswipe

This staged accident occurs at intersections with two left-turning lanes. The innocent driver accidentally drifts into the other lane on the turn, or the fraudster does and sideswipes. The scammer will claim the other driver caused the accident. A similar scenario can happen with turning right and leaving a parking space from the curb.

Start-and-Stop

This accident fraud occurs in heavy traffic. The scammer drives ahead of the innocent driver and begins to move but for no reason brakes and forces a rear-end collision.

Credit: Olena Panasovska, UA

What can you do?

Avoid becoming a staged accident victim by utilizing the following tips from the National Insurance Crime Bureau (and a few of our own).

 

 

  1. Don’t tailgate. Leave adequate room between you and the car in front of you in case they hard brake suddenly. The National Safety Council recommends the three-second rule by which the trailing driver leaves a three-second cushion of travel time between him and the vehicle in front.
  2. In parking lots, drive slowly and pay close attention to others driving or walking near you.
  3. When leaving the curb, be aware of what is happening behind you and proceed with caution.
  4. Don’t drift into another lane when turning left.
  5. When turning right, proceed with caution and account for all vehicles, bicyclists, and pedestrians in the area.
  6. Call the police to the accident scene and obtain a police report (with the officer’s name) even if the accident has minimal damage.
  7. Use your smartphone camera or a disposable camera in your car to document accident damage and the number of passengers in other vehicles.
  8. Avoid “runners” and “cappers.” These are people who appear from nowhere, directing you to personal injury attorneys. They are generally part of a broader insurance scam.
  9. Avoid doctors who insist you file a personal injury claim if you are not hurt.
  10. Do not allow any tow truck driver who arrives on the scene to take your vehicle. Make your own call for a tow and get the fees upfront in writing. Check out more on this from the NMA E-Newsletter #611—Protect Yourself from Predatory Towing.

If you think you have been involved in a staged accident, call your insurance agent, the police, the state insurance commission, and report it to the National Insurance Crime Bureau by calling 800-835-6422 or submitting a form on the NICB website. If you want more information, download the NICB brochure on Staged Automobile Accident Fraud.

Since this piece first posted, a few other articles have come out on the scam in New Orleans:

If you have been scammed in this way, give us a comment either below or on the NMA Facebook Page.

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