Auto insurance fraud: How to detect staged accidents and what to do if you're a victim

Swoop and squat, drive downs, shady helpers -- they are all examples of staged crashes used for auto insurance fraud.

In a video that went viral on TikTok, a driver in New York slowed to a stop in front of the victim. The suspect then threw his car into reverse and backed up into the victim's car, causing $8,000 in damage.

The incident is an example of a suspected case of insurance fraud perpetrated by criminals looking to defraud insurance companies - something that happens more often than people think, especially in SoCal.

"I would describe Southern California as the fraud capital of California," said Capt. Eric Hood, who works at the Inland Empire Division of the California Department of Insurance (CDI).

Hood says the state gets more than 20,000 reports of fraud every year.

"It's definitively a bigger problem than people think," Hood said. "You can't have people crashing on the roadway or the freeway, and three or four-ton vehicles... potentially someone will die."

One of the more prominent cases happened on the 710 Freeway in 1997.

"There was a staged collision ring working in the L.A. area, and they basically set up a staged collision, a family, father, mother, daughter were killed in a collision," said Hood.

It was that case that spurred Assembly Bill 1050 in 1999, which formed the CDI. He says these types of cases, where fraudsters intentionally cause a crash, happen every day.

"The ultimate goal with being in the collision is to get the medical benefits of the insurance policy because that's typically very lucrative for the attorney and the people involved in the collision," Hood said.

He says that often, the ringleader of these kinds of schemes will recruit random people to ride in the car to try to increase the potential payout. But the fraud doesn't stop there.

"A very common scheme with chiropractic and medical treatment would be, the patient comes in one or two times, and they'll sign in 30 times, like they came in on multiple occasions when in actuality they didn't, and that allows the attorney to negotiate a higher settlement for that insurance claim," Hood said.

He calls this type of intentional crash scheme "the sudden stop." However, there are others.

"There's also the 'Swoop and Squat,' where another suspect vehicle cuts them off intentionally, and makes it look like there was a reason to stop... there's also what's known as a 'Drive Down,' which is more for city streets, and it's where they kind of block the traffic," said Hood.

In a video from 2015, one suspect vehicle blocked part of the road. As the victim pulls out of the driveway, the car moves in to block them. That's when the second vehicle comes in and causes a crash. Unless there's a witness to what happened, the victim will be ruled at fault.

One of the more egregious cases involved someone from Yucaipa who actually posted a lot of these types of videos on his own YouTube channel.

"This was just his MO. He liked to go out and film himself getting into road rage and getting into collisions," said Hood. "He liked to carry a large machete in his car, and in some of these incidents, he would go out and threaten the people with the machete."

Hood says that over a two or three-year period, the man filed 23 separate claims for more than $100,000. While he only ended up serving a year and a half in state prison, Hood hopes the man's days of doing this kind of thing are over.

"Part of his plea agreement was to give up his licenses forever, so at least in California, he can no longer have a driver's license," Hood said.

But some of the cases don't involve innocent people at all. Two years ago, at one intersection in Ontario, the suspects colluded together to intentionally crash two cars into one another, according to Hood.

"They basically set up this vehicle to get hit, so the person in the other car is going to crash into this car, and this ended up involving five suspects," Hood said.

Unfortunately for them, it was all caught on camera.

"A female shows up and claims she's involved in the hit-and-run, she was very confused on what vehicle she was driving to the police...which is a red flag," Hood said. "Ultimately, it ended up being five suspects who colluded to file false insurance claims, and as you saw, they crashed two vehicles thinking they could get away with it."

Hood says his job is very hard and hamstrung by the amount of resources they have. He says that out of the 163 sworn positions they have, they're down by 30%.

"We just can't get to all of them because we just don't have the resources."

Hood also says that when investigating one case, they come across more fraud. Years ago, he says two suspects took their vehicle up Azusa Canyon and recorded a video of them intentionally crashing them into each other to get the insurance payouts for both vehicles.

"You're probably talking $30,000 plus, basically totaled," he said.

However, when they served search warrants on their phones, they discovered something else.

"That case involved a CHP employee who was selling incident reports illegally, under the table for cash, to someone who owned a body shop," Hood said.

Those incident reports had personal information about people involved in crashes, including the name of the insurance company. With that information in the wrong hands, the fraud begins.

"So that CHP employee would then sell these reports to this guy, in turn he had an employee working for him, who would call these people pretending to be with the insurance company," said Hood. "Saying 'I'm from AAA,' 'I'm from' whatever the insurance company might be, 'and we're going to take your vehicle to an approved body shop... and then take it to a body shop or tow yard, and hold it hostage for storage fees, upwards of $6,000 or $7,000 in storage fees essentially."

What to do if you're a victim

So what can you do if you think you are involved in an intentional crash?

"Dash cams are instrumental in documenting what occurred, they don't always capture everything because most people only buy the front-facing camera. If you can, I would buy a front and rear facing dashcam because it captures much more information," said Hood.

He also says that fraud rings typically don't want to call the police or CHP. They'd rather just exchange information and leave.

"If you're in a traffic collision, call the police, especially on the highway. The CHP will take a report. If you suspect something is out of place, let the officer know," Hood explained.