Greater Baton Rouge Business Report: Fraud rings on the rise: casino communities hit hard; one scam

The claims department at U.S. Agencies is trained to spot irregularities, and in the past two years they've spotted a growing number of them, especially in communities near casinos.

Over a two-year period in the Marksville area, for example, the Baton Rouge insurance company paid out $400,000 in claims for various accidents and injuries, says Sabrina Green, executive vice president of claims.

Every single one was a fake. "Some of them staged accidents with family members," Green said. "Sometimes there was not even an accident," simply fraudulent accident reports and claim forms.

Green's staff, along with investigators in U.S. Agencies' special investigations unit, identified the scam after certain names kept popping up in various claims, sometimes as drivers, other times as passengers. The company turned the information over to state police, and when it was all over, authorities estimated at least 37 and as many as 600 people were involved in the scams.

U.S. Agencies, which writes insurance for customers who can only afford legal minimums, has spotted several similar fraud rings, in which a few key players teach others how to file bogus claims.

The company now regularly works with state police and the FBI, but rarely local authorities so as not to inadvertently tip off the scam artists in small communities where secrets are not easily kept.

Several of the rings have cropped up near casinos, says Greg Tramontin, U.S. Agencies president and chief executive officer. He figures gamblers are strapped for cash so they resort to staging wrecks and filing bogus claims for injuries to come up with money.

"Per 100 policies, Louisiana has the highest number of accidents, plus the highest number of injuries in the country," Tramontin says. Those figures mean one thing: "Fraud is rampant."

Stopping fraud and curtailing exaggerated claims are key factors in controlling auto insurance costs, which are already spiraling out of control, insurers say.

Tramontin estimates 95 percent of claims U.S. Agencies pays are either exaggerated or are outright fraud, Nationally, that figure is estimated to be 65 percent.