Rampant Fraud in Staged Accidents

It should come as no surprise that Hollywood has not made many movies about insurance—arguably among the least glamorous of industries. However, there are three insurance-themed films worth watching. Two from the 1940s film noir era are Double Indemnity and The Killers, both of which portray insurance claims investigators in a positive light. The Fortune Cookie, a 1960s comedy starring Jack Lemmon and Walter Matthau, is about opportunistic fraud. After Lemmon’s character is injured in an accident, his attorney brother-in-law Matthau has him feign paralysis to scam the insurance company for a large payout.  

Whereas the plot of The Fortune Cookie may sound implausible, the reality is that insurance fraud is rampant. Fake and inflated claims are responsible for over $300 billion in claims leakage annually. Staged accidents are among the most grisly types of insurance fraud. Here, organized criminal rings comprising complicit attorneys, medical providers, and actors fake serious road injuries to extract inflated medical reimbursements and proceeds from insurers in civil litigation. Some such schemes have generated tens of millions of dollars in ill-gotten gains.

One recent example is so macabre that it should be made into a movie. Cornelius Garrison was a member of a Louisiana criminal gang actively perpetrating phony injuries in staged accidents. Garrison was a “slammer” in staged automobile “accidents”—a driver who intentionally crashes into other vehicles (preferably 18-wheelers) in order to fraudulently collect insurance settlements. Some have estimated that Garrison participated in close to 100 staged accident scams. But after fellow gang members learned Garrison had turned witness for the Federal Bureau of Investigation (FBI), his life was in danger. Co-conspirators offered to pay him to move to the Bahamas to escape retribution; however, Garrison chose to stay home, where he was murdered in a 10-bullet fusillade.

Staged accident fraud is a growing profit center for criminals. In R Street’s 2023 expert witness testimony to Congress on the seamy side of third-party litigation funding, we cited New York’s $31 million staged accident fraud ring, orchestrated by litigation funder Adrian Alexander. The largest scheme known at the time, it ensnared complicit attorneys and corrupt medical providers known as “medical mills,” engaging in artificial medical bill inflation and upcoding (the submission of claims containing codes for expensive medical services never rendered). Since then, another massive staged accident ring twice the size of Alexander’s has come to light: a $60 million racket that allegedly bribed 911 emergency line operators to direct callers to medical providers controlled by Bradley Pierre, the mastermind behind it.

The insurance industry loses billions annually to fraudulent claims. The Coalition Against Insurance Fraud has estimated the cost of U.S. insurance fraud at $309 billion per year (including scams related to property and casualty as well as life and health insurance). Property and casualty insurance fraud accounts for approximately $45 billion, with automobile insurance fraud as a major component; in fact, the FBI estimates that staged accidents are responsible for approximately $20 billion in illegal claims.

States Matter

Fraudulent crash claims are most heavily concentrated in high-traffic states. California saw the most staged-auto claims in 2023 (5,366 incidents), followed by New York (1,729) and Florida (1,110). New York and New Jersey saw big year-over-year jumps: Staged accidents went up 14 percent in New York and 58 percent in New Jersey between 2022 and 2023. 

Staged accidents are more than just the squalid intersection between insurance money and crime—$20 billion in annual losses to insurance companies translates into higher premiums for all insurance buyers, especially those who buy insurance policies for trucks and other commercial vehicles. Staged accidents have driven some insurance companies to their knees by boosting their losses.

Estimates of the percentage of fraudulent claims vary among sources, but all are in the double digits. The Coalition Against Insurance Fraud has estimated that close to 10 percent of insurance claims are fraudulent. The Insurance Research Council estimated that approximately 25 percent of automobile liability claims involve some element of fraud, including staged accidents. A recent Racketeer Influenced and Corrupt Organizations (RICO) suit brought by the American Transit Insurance Company (ATIC)—a New York-based insurer with a focus on taxi, limousine, and transportation network company (TNC) insurance—estimated that 60-70 percent of its transportation network company claims are fraudulent.

Insurance losses generated by staged accident fraud are so large that insurance buyers and insurance providers have taken off their gloves and are fighting back. There have been numerous RICO suits filed against scammer defendants, consolidating hundreds of staged accidents. Insurers have launched educational campaigns for the public to recognize when they have fallen victim to such an accident. Further, Reps. Mike Collins (R-Ga.) and Brandon Gill (R-Texas) introduced a bill to staunch the seamy practice.  

Companies Stung by Staged Accidents

Several insurance companies and transportation network providers have been embroiled in litigation stemming from fraudulent claims as plaintiff or defendant.

James River Insurance Company sued 52 individuals who allegedly conspired in hit-and-run accidents to generate fraudulent claims in South Carolina. The scheme included staged accidents in which Uber drivers insured by the company were rear-ended intentionally while transporting one or more conspirators, who then filed claims against James River.

In 2025, Union Mutual—a small Vermont-based insurer—filed a suit in New York’s Eastern District alleging widespread fraud committed by a group of lawyers, financiers, doctors, surgeons, radiologists, and pain-management specialists. Liberty Mutual, State Farm and other insurers have brought similar suits.

Adjacent Varieties of Staged Accidents

Another category of staged accidents is feigned trips or falls and other types of workplace accidents. As with staged commercial auto fraud, crooked attorneys direct allegedly injured conspirators to healthcare providers who perform one or more expensive medical procedures. The illegitimate billing of inflated medical costs has led to demands for seven-figure awards. Often from low socioeconomic strata, individuals receiving the unnecessary procedures may be offered $1,000-$2,500 to fake an accident and undergo soft-tissue surgery. Sadly, spinal fusions and other surgeries can cause permanent damage and restricted mobility.

An attorney representing Union Mutual characterized these ring members as “very often people who are desperate.” He explained: “None of these people entered into this as someone who was well off. This seems like a way to gain financial security that they do not have. They don’t have college degrees. They very often have grade school educations. And they have buddies who they see have done this and have made real money.”

Insurers and Congress Fight Back

Insurance investigators and law enforcement are fighting back against the rising trend in staged accident scams. Examples of this pushback include the following:

• As previously mentioned, the ATIC filed a RICO suit in December 2024. The 698-page suit names 186 defendants “engaged both individually and as part of a conspiracy to submit thousands of fraudulent insurance claims.” The ATIC sought $153 million in compensatory and punitive damages, which could become as much as $450 million if triple indemnity should apply. By February 2025, the ATIC had settled with 141 of the 186 defendants named in the massive suit.
• Uber Technologies filed a RICO suit against law firms, physicians, and pain-management clinics allegedly involved in faking car accidents and performing expensive, unnecessary back and neck surgeries to take advantage of New York’s no-fault insurance policies. As with other staged accidents, the resulting surgeries were designed to maximize payouts from insurers and trucking companies.
• Uber filed two additional lawsuits in 2025 against doctors and lawyers complicit in staged accident schemes in Miami and Los Angeles.
• In the Louisiana ring described earlier (which involved the murder of an FBI informant), complicit attorneys secured large settlements from insurance company Chubb. The total settlement value from both truck carrier C.R. England and Chubb was $4.7 million.
  • Canal Insurance—a South Carolina insurer specializing in truck and commercial auto insurance—was also tagged on this scheme.
• Hereford Insurance, a small New York-based insurer specializing in taxi and livery insurance, has reported that its Special Investigations Unit is highly focused on staged accidents.
• Several organizations and companies, including the New York Department of Motor Vehicles, IAT Insurance Group, the National Insurance Crime Bureau, Lancer Insurance, Plymouth Rock Assurance, and others have produced materials to educate the public on this type of crime, which can ensnare anyone.  
• As briefly mentioned before, Reps. Collins and Gill introduced the Staged Accident Fraud Prevention Act in April 2025. This bill would make intentionally staging a motor vehicle crash a federal crime. According to Collins, “Criminal elements are launching an assault against America’s truckers, in the courtroom and on our roads. Staged accidents take advantage of truckers’ high insurance coverage and make them prime targets for criminals looking for a quick payday, saddling truckers with millions of dollars in inflated damages, increasing insurance premiums for all Americans, and driving up the costs for every transported good. The Staged Accident Fraud Prevention Act will hold these fraudsters and their co-conspirators accountable and stop the ‘nuclear verdicts’ that are bankrupting truckers across the country.”

Real Solutions to Address Staged Accidents

While comprehensive statistics on staged accidents for 2024 are not yet available, multiple indicators point to a rising trend. Staged collisions are described as “more brazen” and growing in 2023-2024. Some combination of the following responses can provide ammunition in the fight to combat staged accident fraud:

1. Introduce a Fee Schedule. Because intentionally injured participants are directed to complicit medical providers who generate vastly inflated invoices, the introduction of a fee schedule specifying a reasonable cost for procedures performed (or alleged to have been performed) could prevent medical providers from presenting unjustified bills.
2. Reform No-Fault. New York’s no-fault auto insurance laws require insurers to cover medical expenses up to $200,000 for injuries involving taxis and for-hire vehicles. These laws have unwittingly created incentives for fraudulent practices including inflated diagnoses, over-treatment, unnecessary procedures, and padded billing.
3. Prohibit Phantom Damages. Efforts in state legislatures to prohibit the practice of phantom damages—where the cost of medical care billed exceeds the amount paid—can put a lid on this abusive practice. Back surgery can be very expensive, with the cost of a spinal fusion running up to $500,000 and a laminectomy (another major spinal surgery) up to $150,000.  
4. Reduce Policy Limits. Fraudsters tend to favor staged accidents involving trucks and TNCs over accidents involving private passenger vehicles because the mandatory insurance limits are much higher for trucks and other commercial vehicles. Reducing the mandatory limits from trucks ($750,000) and TNCs ($1M) can reduce the attractiveness and incidence of these “accidents.”
5. File Declaratory Judgments. Declarative judgments establish whether a defendant or plaintiff is obligated to make no-fault payments. One insurer that increased its summons and complaint filings enjoyed more-favorable settlements in litigation and arbitration, resolving claims at 16 percent of billed amounts.
6. Require Examinations Under Oath. Repeated failure of providers to appear for examinations under oath (EUOs) can be a signal of fraud. These EUOs can help verify claim legitimacy, identify fraudulent activity, and reveal deceptive billing practices.
7. Reduce Arbitrations. Whereas arbitration is meant as a lower-cost alternative to costly litigation, a recent uptick in the number of arbitration hearings (and a shorter time frame enabled by the American Arbitration Association’s aggressive virtual arbitration schedule) has led to fraudulent accidents entering the arbitration process. Combined with fewer investigations, shorter post-pandemic time frames for arbitration have allowed some fraudulent claims to enter the system.
8. Follow Relevant Legislation. The bill introduced by Collins and Gill sheds light on unseemly and illegal staged accident activity.
9. Focus on Key States. The states with the most staged accidents are Florida, New York, California, Texas, and Maryland. Cities with the most staged accident claims include New York City, Tampa, Miami, Orlando, and Houston. Florida is the only state with specific legislation against staged accidents.
10. Educate Insurance Buyers. Insurance is not the most admired of industries, which has contributed toward the perception that insurance fraud is victimless. Hawaii’s Department of Commerce and Consumer Affairs declares that people commit insurance fraud because it is perceived as a victimless crime against a faceless insurance company, and they believe they will not be caught. Educational campaigns led by state insurance departments can counter false narratives regarding staged accidents.

Insurance fraud is a crime. It is unethical, it is dishonest, and it can put perpetrators behind bars for many years. Join the fight to stamp it out.