TRENTON - Attorney General Peter C. Harvey today announced that the former owner of five North Jersey chiropractic clinics, and the mastermind and beneficiary of a staged accident ring that netted hundreds-of-thousands of dollars in fraudulent insurance claim payments, has been sentenced to 29 years in state prison. A co-defendant was also sentenced to 13 years in state prison. Both individuals were convicted on Oct. 15 on charges of criminal racketeering, conspiracy, Health Care Claims Fraud, and theft following a six-week jury trial before Union County Superior Court Judge John S. Triarsi.

"This substantial and significant sentence represents the final chapter in the dismantling of one of the largest phony accident rings yet uncovered by the Division of Criminal Justice and the Office of the Insurance Fraud Prosecutor," said Attorney General Harvey. "Aside from stealing money from insurance companies, thereby contributing to higher auto insurance rates, these businessmen-turned-criminals put at risk the lives and safety of New Jersey's drivers."

According to Vaughn L. McKoy, Director, Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden-Brown, Anhuar Bandy, aka “Chief”, 41, Livingston Avenue, New Brunswick, Middlesex County, and Elvin Castillo, 27, Marshall Street, Elizabeth, Union County, were sentenced by Judge Triarsi to substantial terms in state prison. Bandy was sentenced to 29 years in state prison and ordered to pay a $100,000 fine. The amount of restitution has yet to be determined. Castillo was sentenced to 13 years in state prison and ordered to pay a $50,000 fine and $27,800 in restitution.

Insurance Fraud Prosecutor Gooden-Brown noted that Bandy and Castillo, along with 26 other co-conspirators, were charged via ten separate State Grand Jury indictments returned on May 16, 2002. The indictments, which charged multiple counts of conspiracy to commit criminal racketeering, racketeering, conspiracy to commit Health Care Claims Fraud, and theft by deception, detailed the existence and operation of an extensive insurance fraud scheme which used staged accidents to manufacture tens-of-thousands of dollars in fraudulent insurance claims.

The indictments charged that Bandy and the co-defendants “staged” more than 90 automobile accidents which resulted in 24 insurance companies paying more than $2 million in fraudulent automobile accident and personal injury medical claims.

The Division of Criminal Justice - Office of Insurance Fraud Prosecutor investigation determined that Bandy and Castillo constructed the “staged” accidents by instructing selected co-defendants - known as “runners” - to recruit persons to participate in the “staged” accidents. The participants of the “staged” accidents were instructed to deliberately crash motor vehicles into other vehicles or into fixed objects such as parked vehicles, telephone poles, or other obstructions. While the occupants, or so-called “victims,” of the “staged” accidents were not injured, they none-the-less obtained medical treatment at Bandy-operated chiropractic clinics or through other medical service providers. As a result of “treating” the “injured” “victims,” Bandy submitted thousands of fraudulent Personal Injury Protection (PIP) medical claims to insurance companies for payment of medical services. (A listing of the 26 co-defendants and disposition of the criminal cases is available via the Division of Criminal Justice - Office of Insurance Fraud Prosecutor Web site at www.njdcj.org).

The chiropractic clinics owned and/or operated by Bandy included the Elizabeth Injury Center, 925 Elizabeth Ave., Elizabeth; Amboy Injury Center, 272B Hobart St., Perth Amboy; Prospect Spinal Trauma Center, 500 Mount Prospect Ave., Newark; Plainfield Injury Center, 430 Watchung Ave., Plainfield; and the Golden Medical Center, 925 Elizabeth Ave., Elizabeth. The clinics were in business from February, 1995, and ceased operations in July 1999, as a result of the Division of Criminal Justice - Office of Insurance Fraud Prosecutor investigation.

Attorney General Harvey noted that the Office of Insurance Fraud Prosecutor leads the nation in the number of criminal and civil actions taken against insurance fraud perpetrators. Thus far in 2004 (Jan. - Oct.), the Office of Insurance Fraud Prosecutor has obtained 65 criminal indictments charging 128 defendants; secured guilty pleas against 59 defendants; and obtained more than $16 million in criminal fines and restitution. A national report released by the Coalition Against Insurance Fraud reported that the Office of Insurance Fraud Prosecutor accounted for 86 percent of the total civil actions reported in 2002 by all 43 state insurance fraud bureaus. Additionally, the Office of Insurance Fraud Prosecutor was first in the nation in the total number of insurance fraud cases opened in 2002 – civil and criminal. New Jersey’s total of 4,986 cases opened in 2002 was more than double that of second-ranked California. In 2002, New Jersey’s Office of Insurance Fraud Prosecutor realized a 143 percent increase in indictments over 2001, with 302 criminal convictions for insurance fraud in 2002.

Deputy Attorneys General Walter Krako and Marysol Rosero coordinated the prosecution. Supervising State Investigator Ciro Sebasco, along with state investigators assigned to the Office of the Insurance Fraud Prosecutor, conducted the investigation. Additional investigative assistance was provided by the New Jersey State Police, Federal Bureau of Investigation, the Union County Prosecutor’s Office, the Hudson County Prosecutor’s Office, and the federal Immigration and Naturalization Service.

Insurance Fraud Prosecutor Gooden-Brown credited the insurance industry for their cooperation in the investigation. The following insurance companies contributed time, expertise and other resources, during the course of the extensive criminal investigation: Republic Western Insurance Company, Allstate Insurance Company, Material Damages Adjustment (MDA) Services, Prudential Insurance Company, Selective Insurance Company, State Farm Insurance Company, Liberty Mutual Insurance Company, and Crossroads Investigations.

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