In May, Tuan "Andy" Nguyen was among 22 folks arrested and indicted on charges of staging car accidents with salvaged vehicles in order to collect the insurance money -- to the tune of some $1 million in fraudulent claims. Well, today Nguyen -- singled out by the U.S. Attorney's Office as the operation's "ringleader" -- pleaded guilty to "his role in the conspiracy," according to a release sent out by U.S. Attorney of the Northern District of Texas Richard Roper's office.
Nguyen, whose operation covered the entire Dallas-Fort Worth area, pleaded guilty in U.S. District Judge Jorge Solis' court, admitting to one count of conspiracy to commit mail fraud and health care fraud and another count of conspiracy to launder money. He will be sentenced in January. Says Roper in the release: “This guilty plea of the ringleader of this massive and long-running staged accident scheme demonstrates federal law enforcement’s commitment to tackling the problem of insurance fraud in North Texas." The full release, in which Nguyen outlines the scheme in great detail, is after the jump. --Robert Wilonsky
RINGLEADER IN STAGED ACCIDENT CONSPIRACY PLEADS GUILTY
Conspiracy Caused More Than $1 Million in Losses to Insurance Companies
DALLAS — The ringleader in a massive staged accident ring that operated in the Dallas - Fort Worth (DFW) area since January 2000, and caused more than $1 million in losses to victim insurance companies, pled guilty to his role in the conspiracy, announced U.S. Attorney Richard B. Roper, of the Northern District of Texas. Tuan (Andy) Nguyen, 32, pled guilty before U.S. District Judge Jorge A. Solis to one count of conspiracy to commit mail fraud and health care fraud and one count of conspiracy to launder money. He faces a maximum statutory sentence of 40 years in prison, a $500,000 fine and restitution. Nguyen has been in custody since late May 2007 on charges outlined in a 71-count indictment returned by a grand jury in Dallas. He is scheduled to be sentenced by Judge Solis on January 23, 2008.
U.S. Attorney Roper said, “This guilty plea of the ringleader of this massive and long-running staged accident scheme demonstrates federal law enforcement’s commitment to tackling the problem of insurance fraud in North Texas.”
Twenty-two defendants were charged in the indictment that brought to light the massive staged accident scheme that had been operating in the DFW area for approximately seven years. Nguyen admitted that he orchestrated the conspiracy and conspired with others to defraud numerous insurance companies by staging multiple motor vehicle accidents schemes throughout the DFW metroplex that resulted in actual losses to victim insurance companies of more than $1 million. Twenty-one defendants have filed guilty pleas with the Court and are awaiting sentencing. One defendant remains set for trial in February, 2008.
“Fraudulent insurance claims contribute to increased insurance premiums that ultimately victimize the American public,” said Fort Worth Division Acting Inspector in Charge Barbara Meyer. “The U.S. Postal Inspection Service is committed to ensuring the public’s trust in the mail by investigating these types of illegal schemes and putting the operators behind bars.”
Special Agent in Charge Robert E. Casey Jr., Dallas FBI, said, “I would like to thank the Internal Revenue Service-Criminal Investigative Division and the U.S. Postal Inspection Service who have provided their expertise and dedication to this investigation. The FBI and its law enforcement partners will continue to aggressively and pro-actively investigate these complex conspiracies, ringleaders and criminal associates who are seeking to defraud and exploit the medical and insurance industry and auto licensing authorities."
“The guilty plea by Tuan (Andy) Ngyuen, as the organizer and leader of the conspiracy of this massive staged accident scheme, has one common thread with the other 20 guilty pleas in this investigation: the intent to defraud, " said Erick Martinez, Special Agent in Charge of IRS Criminal Investigation in the Dallas Field Office. Martinez continued, “IRS Criminal Investigation will aggressively pursue fraudulent schemes and work with other law enforcement agencies investigating the illegal activities from both tax and money laundering perspectives to ensure that criminals are held accountable.”
Frederick P. Lohmann, Area Director for the National Insurance Crime Bureau, said, “The National Insurance Crime Bureau and its 1000 plus member companies wish to convey our sincere thanks to the men and women of the IRS CID, FBI, Postal Inspection Service, and U.S. Attorney’s Office for their efforts of addressing insurance fraud in Texas. It has been estimated that insurance fraud is a drain of $30 billion to the nation’s property and casualty insurance industry. This adds $200 - $300 to average consumers annual insurance cost — money that belongs in the bank accounts of families and not in the pockets of scam artists and criminals. It is both encouraging and gratifying to see the practitioners of insurance fraud held accountable for their actions.”
Nguyen was the organizer and leader of the conspiracy — he planned the accident activity, recruited and paid accident participants, provided automobiles, provided funding for automobile insurance, arranged for chiropractic doctors and chiropractic facilities to be used by the accident participants, selected paralegals and law firms for legal representation for the accident participants, and controlled the majority of the funds generated by the scheme. Fraudulent claims were filed with the insurance companies by the insured, or by a law firm retained to represent the insured. These claims included fraudulent bills for the damage incurred by the vehicles in the staged accidents and claims for injuries that never occurred, or were negligible but for which medical bills had been created by chiropractors for the specific purpose of inflating the number of treatments and the severity of the injuries.
Nguyen admitted that as part of the conspiracy he and others obtained salvaged vehicles to be used in the purported accidents. Nguyen re-titled the vehicles in Arkansas as a way of removing the “salvaged vehicle” designation and for the specific purpose of fraudulently inflating the vehicle’s book value. The vehicle titles were then transferred into a coconspirator’s name who was participating in the accident as the driver/owner of the car. Insurance then was obtained on the vehicles to be used in the accidents and for the individuals allegedly driving or owning the vehicles. Nguyen admitted he dictated the type and limits of the insurance obtained for the accidents, such as personal injury protection, to enhance the possibility of payments by the victim insurance companies for the alleged bodily injuries.
Nguyen admitted that, with the help of the other coconspirators, he created the fraudulent accidents by either staging intentional and controlled collisions of two vehicles to cause actual property damage, or fraudulently reporting to victim insurance companies that an accident had occurred by using two previously damaged vehicles to depict the purported accident.
Nguyen admitted that after the “accident,” he and other coconspirators then would feign personal injuries as part of the scheme and obtain medical treatment at clinics owned and operated by chiropractors Nguyen knew in order to obtain medical bills that inflated the number of treatments and the severity of the injuries. Nguyen admitted that some of the chiropractors and their employees generated false medical and billing records for submission to the victim insurance companies when no treatments were provided or required.