21 arrests in record auto insurance fraud

Police have made more arrests in what officials are calling the largest auto-insurance fraud case ever seen by Manitoba Public Insurance Corp.

Twenty-one people have been picked up since last week and police say more arrests are likely.

Authorities say they have disrupted a scheme by an organized gang to defraud MPIC by rolling back the odometers of recently purchased out-of-province vehicles, staging phoney collisions and/or reporting the vehicles as stolen.

The investigation, dubbed Project Rollback, was started by MPIC and police after an adjuster at the publicly owned auto insurer noticed something unusual with an insurance claim last year.

That led to the discovery of allegedly phoney claims that officials said total more than $800,000. Officials said about $650,000 in claims were paid out by the insurer and another $150,000 in payouts were pending.

Falsified safety inspection certificates were part of the attempt to defraud MPIC, officials said. (CBC)Tim Arnason of MPIC's special investigations unit said the scam began almost immediately after the vehicles were brought into the province.

"It was not uncommon for a vehicle to be purchased in, let's say October, brought here very quickly. Safetied very quickly. Flipped around on paper sales very quickly, and it's involved with a loss within weeks, sometimes days."

MPIC said the bogus claims go back as far as 2005 and perhaps earlier.

Winnipeg police on Monday said they executed search warrants last week at homes on Tilstone Bay, Guay Avenue and Killarney Avenue in Winnipeg. They also raided two commercial garages on Nairn Avenue and Selkirk Avenue.

In all, over three days, 21 people were taken into custody, police said.

Arrest warrants have also been issued five others who have not yet been located, police said.


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Auto insurance overhaul threatens inner city agents

(NECN: Peter Howe, Boston) - Massachusetts is now 16 months into a sweeping overhaul of automobile insurance called "managed competition," aiming to use more market competition -- and less state regulation -- to set and ultimately lower car insurance rates.

But as it produces winners and losers, it's also producing some political controversies for Massachusetts Governor Deval L. Patrick. Those include an increasingly intense outcry from a group of several dozen inner city, mostly minority, insurance agents who say their companies -- and 230 jobs across the state -- are threatened to be driven out of business by the changes.

Against very long odds, beginning in the late 1970s Roussel Theodat built, and his daughter Marie-Armel helped and then took over, a successful little business, Theodat Insurance Agency in Boston's often-struggling Codman Square section in Dorchester.

Now Marie's in a fight for the company's life, and her three employees' jobs.

"Every day it's a challenge. Like a lot of the agents like to say, we're hemorrhaging right now, and every day it's just one day closer to closing our doors.'' She says her challenge isn't just the economy, it's Patrick's auto insurance policies. Patrick's insurance commissioner, Nonnie S. Burnes, has begun phasing out an old system meant to prevent inner-city drivers from being unfairly denied car insurance. The change means getting rid of a type of agent called "exclusive representative providers,''

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