Insurance fraud is a rising crisis in New York City. It involves the deliberate use of deceptive tactics to manipulate insurance companies into providing compensation for personal injuries that are either entirely fabricated, grossly exaggerated, or unrelated to the insured incident. This dishonest practice damages the insurance system and has consequences that affect everyone, including those not involved in the fraudulent activity. This is why hiring an experienced local New York personal injury lawyer with integrity to handle your case is essential.
The attorneys at Chopra & Nocerino have over 20 years of combined experience handling personal injury and accident cases in New York. As genuine New Yorkers, they provide straightforward advice without sugarcoating, offering you only the unvarnished truth.
What Are the Types of Personal Injury Insurance Fraud in New York?
Personal injury fraud can appear in many forms. Below are some of the most common types:
- Staged Accidents: These are deliberate incidents created to appear as accidents, such as a slip and fall accident at a commercial property that was orchestrated to collect a payout from the business’s insurance policy.
- Phantom Passengers: This type of fraud often happens after car accidents. Phantom passengers are people who claim they were in the vehicle during the crash and say they were injured. However, these individuals usually show up at the scene after the accident.
- Exaggerated Treatment: This situation arises when an individual exaggerates the severity of their injuries following an accident. For example, a person involved in a slip and fall may have only sustained a minor bruise but claims that the injury has significantly impacted their daily life and their ability to function.
- Sham Medical Billing: This occurs when a medical practitioner or provider falsely bills a patient’s insurance for procedures or treatments that did not occur.
- Exploiting No‑Fault Rules: New York is a no-fault state, which means you do not have to prove fault for injuries to receive benefits. However, fraud occurs when insurance companies are deceived into making that payout, such as through staged accidents.
What Are the Impacts of Personal Injury Insurance Fraud in NYC?
Insurance fraud schemes have a widespread ripple effect that goes far beyond the insurance companies that pay out on false claims. While the immediate financial losses fall on insurers, the long-term consequences extend to all policyholders, honest claimants, and even public resources in New York:
Effect on Premiums And Affordability
Insurance fraud can cost insurance companies millions. To recoup their losses, companies may increase premiums, making it more financially difficult for the public to obtain or keep policies.
Delays in Processing Claims
Fraudulent claims can make insurers more skeptical. As a result, insurers may implement more strict claims handling procedures, which can delay the payout for those with legitimate claims and financial needs.
Criminal and Legal Penalties
Insurance fraud involves serious consequences, including criminal charges, hefty fines, and imprisonment for the perpetrators. In addition, those responsible may be ordered to pay restitution or punitive damages. If they cannot pay those financial obligations, a court may impose a lien on their assets or garnish their wages.
Recent High-Profile Insurance Fraud Cases in New York
June 2025
Roosevelt Road Specialty and its reinsurance program, Tradesman Program Managers, filed a federal lawsuit against the law firm William Schwitzer & Associates and approximately 30 medical practices in New York. The lawsuit alleges that since 2018, the defendants have been involved in a scheme where construction workers were recruited to stage fake construction accidents to receive payouts under workers’ compensation and general liability claims.
January 2025
Uber Technologies sued a group of law firms, doctors, and pain-management clinics for allegedly staging fake car accidents and performing unnecessary medical procedures to take advantage of New York’s no-fault insurance policies. The ride-share company claims the defendants’ fraud scheme has existed since at least 2019.
November 2024
Reinsurer Ionian RE has filed a federal lawsuit against several personal injury law firms, their affiliated runners, and 12 clients of those law firms. The defendants are accused of participating in a fraudulent scheme designed to exploit a New York labor law known as the Scaffold Law. This law stipulates that construction companies and property owners are fully financially liable if a worker is injured after falling from any height at their job site.
October 2024
A Brooklyn man was arrested and charged with staging a vehicle accident, committing insurance fraud, and other criminal offenses, including criminal mischief and reckless endangerment. According to prosecutors, the staged crash involved a Honda Civic that cut in front of a woman’s car, stopped, and then backed into her vehicle. Fortunately for the woman, she had a dashboard camera recording the incident as it unfolded.
How Do Insurance Fraud Schemes Operate in NY?
Insurance fraud schemes can range from simple, one-person scams to large, organized operations that involve multiple players working together. The more complex the scheme, the more it resembles a criminal network, with each participant playing a specific role designed to maximize payouts while disguising the fraud. Common participants and tactics include:
Runners and Recruiters
Runners and recruiters seek out people to engage in fraudulent schemes. They often exploit vulnerable people facing financial difficulties and may instruct them on how to stage various accidents, such as rear-end vehicle collisions or slip and fall incidents.
Sham Medical Doctors
Dishonest doctors, chiropractors, or medical clinics can inflate the scheme by billing for unnecessary procedures, exaggerating diagnoses, or submitting claims for treatments that never happened. These fraudulent bills create the illusion of severe injury, driving up settlement values.
Unethical Legal Involvement
In a fraud scheme, law firms or attorneys file misleading personal injury lawsuits to collect damages from insurance companies or other parties. These kinds of lawsuits may be based on staged accidents or improperly exaggerate the severity of actual injuries.
How Can We Spot and Prevent Insurance Fraud in NY?
Indicators of Possible Fraud
Spotting fraudulent activity may not always be easy, but there are some red flags to look out for:
- Unusual billing behavior
- Exaggerated or fake injuries
- Claiming unrelated injuries are connected to the accident
- Pressure for a quick or reduced settlement
- No credible witnesses
If you suspect fraudulent activity, report it to the authorities.
How to Report Insurance Fraud
The New York Department of Financial Services (NY DFS) and the New York State Attorney General’s Office (NY AG) have methods for reporting insurance fraud:
- New York DFS: The public can report suspected fraud to DFS by calling (888) FRAUDNY or using their online form.
- New York AG: The public can file a complaint by filling out a form on their website.
Hire a Personal Injury Attorney You Can Trust
The legal team at Chopra & Nocerino does not condone fraudulent activity. We believe in honest work, even if it means hard work. And our hard work shows results. Our personal injury and car accident attorneys have won hundreds of millions in verdicts and settlements for our clients. We have also taken over cases from other New York law firms that were reprimanded for their activities and had to give up their clients.
The attorneys at Chopra & Nocerino are real New Yorkers who will stop at nothing to defend our clients and ensure their bills are paid. Contact us online or call 855-NYC-HURT today for a free consultation.
