9 Chicago residents charged in auto insurance fraud ring

CHICAGO (CBS 2) Federal law enforcement busted up an auto insurance fraud scheme, charging a group of Chicago area residents of staging fake accidents in order to rip off insurance companies for more than a million dollars. Federal prosecutors say a Northwest Side body shop at 5027 W. Fullerton was the heart of an insurance fraud ring and its owner, Witold Osinski, was the mastermind.FBI Special Agent Thomas Kenir said Osinski paid 18 others up to $2,500 to stage more than 50 car accidents and then submit false claims to insurance companies. “Some individuals received very small amounts of money; they were the ones that just helped facilitate the thing. Other individuals who were at the center of the scheme, obviously they got more money,” Kenir said. Federal prosecutors say the scam started in 1997 and the alleged offenders bilked nine insurance companies out of money, including All State. But experts say rings like these are not uncommon. Insurance fraud is the second biggest white collar crime nationwide behind tax evasion. “Fraud is absolutely a big business,” said Julie Capozzi, a spokesperson for AllState Insurance. “It’s estimated that 10 percent of all casualty and property claims are fraudulent.”In addition, fraudulent claims cost consumers an extra $300 a year, Capozzi said. “If there are claims that haven’t actually occurred, losses that haven’t actually occurred, that all makes its way back to consumers because ultimately someone has to pay for it,” Capozzi said. One of the defendants named in the indictment worked as an insurance adjuster. If convicted, all could face up to five years in prison. Nine defendants were in court Tuesday, nine others will be arraigned at a later date -- and one suspect remains at large.