It’s a weekday morning, and Mike Russell is out cruising the crowded streets of Brooklyn. An NYPD detective for 16 years, Russell once tracked down Jamaican drug dealers and pursued cop killers on these same streets. "It was an adrenaline rush being on the job," says the ex-Marine. "One minute you were sitting peacefully in a squad car, the next you were chasing some guy across the street," he tells me. Today, Russell works as a private investigator for the Geico insurance firm. He’s on the trail of insurance fraud, and neighborhoods like Sheepshead Bay and Brighton Beach are good places to hunt for it. Street gangs have been staging accidents throughout Brooklyn, then sending "victims" for "treatment" to the phony clinics that have sprung up like weeds in the area.
Russell wants the scammers to know that this is his turf. When he sees a particularly suspicious new clinic—one, say, with no doctor’s name or office hours listed on the door—he’ll park his car and saunter inside, sending clerks and receptionists scrambling. "Once, I walked in, and there was a whole bunch of people in the lobby filling out police accident reports. You thought you were in a precinct," he recalls.
For Russell, who did a stint as a beat cop before becoming a detective, chasing down these schemes isn’t glamorous—not the stuff of NYPD Blue or even Double Indemnity, the classic film noir starring Edward G. Robinson as an insurance investigator. But he and his colleagues are doing yeoman’s work nonetheless: insurance scams uncovered by New York’s industry gumshoes have tripled since 1995, to 12,372 last year.
Insurance fraud is epidemic in New York because of weak penalties and gaping loopholes in the state’s no-fault insurance laws. The rackets have produced heavy losses for insurers, totaling in the hundreds of millions of dollars, and big premiums for New Yorkers.
Private investigators say the range of rip-offs is extraordinary, needing all of their street smarts to figure out. One day, Russell might find himself investigating gangs who use stolen identities to file false claims; the next, he’s sifting through county records to debunk fraudulent claims based on forged marriage licenses, or making surprise visits to victims purportedly disabled in minor auto accidents. "Some of them act surprised to see me," he says. "They don’t think anyone cares enough to look into their cases."
In one imaginative scam, a victim, unemployed for years, filed for lost wages, claiming that he was just about to start a job when he got into a car crash. Suspicious, Russell showed up at the firm that supposedly hired the victim and asked to see his job application, résumé, and other files. There were none. "Turned out the guy who owned the business was the victim’s brother-in-law, trying to do him a favor by helping him file a false claim," says Russell. "He said to me, ’You really came all the way down here just to check this out?’"
In another recent case, a passenger claimed that he developed post-traumatic stress syndrome as a result of a minor accident, so driving was now impossible for him. He sought a heavy settlement until Russell got on his case. The investigator pulled the guy’s motor-vehicle records and found that police had hit him with several speeding tickets—after he supposedly stopped driving. "I went to him and said, ’So, how come you got these tickets?’ He told me he still used his car in emergencies," says Russell, eyebrows arching skeptically.
Insurance fraud is often more than just a crime against companies, Russell stresses. Increasingly, investigators find themselves battling gangs that steal the identity of a policyholder and then file false claims under his name. Russell labored for a year and a half to clear a client whose driving record contained a raft of accidents others had actually staged. Finally, he tracked down a trucker who had taken a picture of the driver of the car that hit him, a black woman. Russell’s client, the real policyholder, was white.
Russell is now working to clear the name of a bus driver with multiple crashes to his name—-all caused by someone else. The man has been unemployed for a year because of the blemishes on his record. "The poor guy’s wife wants to divorce him," says Russell. "I tell her, it’s not his fault. He really didn’t cause these accidents. Sooner or later, we’ll prove it."