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NYPD Breaks Up Multi-Million Dollar Insurance Fraud Ring

Police believe they've broken up a multi-million dollar insurance fraud ring, after arresting nearly 50 people. They say it was a scam that involved fake accidents, fake injuries, and fake medical claims.

Police say Russian organized crime is behind the multimillion dollar fraud ring. Detectives believe the fraud ring operated for years, using phoney victims to collect very real money.

Ray Kelly, NYC Police Commissioner: "They were motivated by greed."

And they were lured in an elaborate sting operation to a Long Island City warehouse with the promise of an $11,000 insurance award, for whatm police say, were phoney accidents with phoney injuries.

Ray Kelly, NYC Police Commissioner: "The ploy was so convincing that one man flew from the Dominican Republic, another man drove up from North Carolina, and a third drove all the way from Minnesota."

Police arrested nearly 50 people, including a doctor, in what they are calling a large scale multi-million dollar insurance fraud operation. It was led by a company called Parallel Management that police say has ties to Russian organized crime.

Here's how detectives say the scheme worked. A runner hires phoney accident victims who then file false auto accident reports and claim they were injured. The so called victims then get bogus treatment at one of seven clinics operated by Parallel. And later file lawsuits using the organization's lawyers who collect the money.

Gregory Serio, NYS Supt. of Insurance: "For every premium-paying New Yorker...they are paying the tab for cases like this."

Many of the clinics, including the one in Williamsburg, have been shut down. Police say a major middleman in the organization, Alvin Owens, is now under arrest. Police seized several guns and $60,000 dollars in cash at his home.

Lt. Glen Hallahan, NYPD: "We've taken down smaller rings than this, but not one of this size."

Police say phase two of Operation Gateway continues. More than a 100 more people are expected to be arrested in the coming weeks, among them will be some doctors and lawyers.

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