Crime gangs fake car crashes

Melbourne crime families are behind a fake road smash racket costing millions of dollars. The scam, known as "claim farming", is now a daily occurrence in Victoria, industry experts say. Claim farming, which is driving up premiums for honest drivers, is hitting the insurance industry so hard it is increasing forensic testing of accident vehicles.

Firms are "red-flagging" certain surnames for closer scrutiny when they lodge claims. They are names associated with what one investigator called an inordinately high number of smashes. Prangs involving high-end makes such as Mercedes-Benz, BMW, Ferrari and Maserati are popular with the fraudsters. Some fraudsters are deeply involved in other branches of organised crime like car theft and drug trafficking. "Absolutely, it's organised," an insurance fraud investigator said. "It's a business."

The Herald Sun has been told:

A Ferrari insured for $150,000 was wrecked in a staged smash;

There were threats of violence and bikie intervention after a rort cooked up between a driver and panel shop operator turned sour;

Scammers have deliberately deployed airbags to ­back their accident stories; and

Most of the crashes are in the north-western suburbs.

Many of the accidents are staged late at night in quiet industrial areas to eliminate the risk of witnesses and allow maximum planning.

A typical sting involves scammers buying a damaged prestige vehicle of low value at auction, repairing it to the point where it is roadworthy then insuring it at a greater worth. It is crashed with the aim of writing it off and getting the full value of the policy.

Some of the drivers were raking in even more money by making bogus accident injury claims. The investigator said smash repairers looking for a slice of the action were frequently involved in orchestrating the smashes. A panel shop operator will face court soon after becoming one of the few people charged in connection with claim ­farming.

The forensic checks are regularly finding damage inconsistent with the drivers' accounts of what happened. In some cases, there is evidence of multiple impacts to maximise the damage. Telephone records, which can be demanded by insurers as a policy condition, have brought some shysters undone. A check after one smash found the two drivers had been in phone contact before the bingle occurred.

Insurance Council of Australia special risks manager Laurie Ratz said the same businesses and people continually cropped up in fake smash scams. Mr Ratz, a former Victoria Police and National Crime Authority officer, said the industry had more and better forensic staff to help but it remained a challenging area. "It's like most frauds. It can be easily identified but problematic to prove it," he said.

Claims faked: Insurance scams rise

There's big money at stake in the fake car-smashing game and plenty of people are ready to cash in. The insurance industry has become increasingly keen to take on the shysters, as it did with a man trying to make a $60,000 claim on his ­Mercedes-Benz. Assessors wondered, as they made an inspection, why a set of wire-cutters was sitting on the front passenger seat of the otherwise pristine Merc.

Luxury cars, like this Maserati, are being used in claim farming schemes. They assessed it as reparable but the driver disagreed, presenting a questionable quote, which stated the car should be written off and he be given a fat cheque. Because the car would not start, a mechanic pulled away its dashboard and found evidence that wires had been tampered with. This led to suspicion that attempts had been made to deploy the car's airbags, backing the crash claim.

A tow truck was dispatched to get the car back. At one stage, the man even turned up with the police, ­saying the insurer had stolen his car. Investigators began to look at the four-wheel-drive vehicle that had collided with the Mercedes-Benz. Within days, it had been stolen, as the driver enjoyed a meal alone at an ­inner-suburban restaurant.

Further checks revealed all of the Mercedes claimant's brothers had also been ­involved in vehicle insurance claims for written-off cars, and the man's father had tried to make a $30,000 claim on a small performance car a few years earlier. When investigators arrived to interview the owner at his home in Melbourne's north, they were told to leave.