11 Seized, Accused in Phony Auto Crash Ring

State and federal investigators broke up a major staged automobile accident ring Thursday with the arrest of 11 Southern Californians accused of bilking at least six insurance companies out of millions of dollars.

Dozens of U.S. postal inspectors and fraud investigators from the California Department of Insurance swarmed into two chiropractic offices, startling several patients waiting for treatment. Using federal search warrants, inspectors seized medical records from the King Medical Arts office in South-Central Los Angeles and from the Centinela Doctors’ Office in Inglewood.

Those arrested include two chiropractors, Dr. George Chromiak, 83, of Inglewood and Dr. Martin Haney Taylor, 31, of San Diego.

The 11 taken into custody were among the 17 defendants indicted by a federal grand jury on conspiracy to commit mail fraud and mail fraud charges after a two-year investigation.

Ongoing Probe

As part of the ongoing probe, undercover agents were able to infiltrate the ring, videotaping two of the accidents staged by several defendants, authorities said.

“It’s almost comical, because in both cases, after the initial collision, all the conspirators got out, looked at the cars and decided there hadn’t been enough damage, so they went back and rammed the car again,” Assistant U.S. Atty. Terree A. Bowers said.

“This is really just the first wave,” Bowers said. “We are pursuing the investigation of the chiropractors and attorneys involved.”

Ron Warthen, chief investigator for the state Department of Insurance’s Fraud Division, said skilled crashers stage several accidents a day. Typically, two or three crashers stage an accident and visit a doctor or chiropractor for an examination. Their phony injuries are rarely serious, usually whiplash or vague back problems.

Money Collected

The chiropractor generates medical bills for treatments, which are sent to insurance companies by attorneys, and the money collected is divided among the crashers, the doctors and the attorneys, Warthen said.

Phony insurance claims from staged auto crashes cost local insurance companies about $100 million a year, authorities say.

“This type of crime has been going on for as long as there have been automobiles and insurance policies,” Warthen said.

Times staff writer Kim Murphy contributed to this article.