Photo Courtesy of Manhattan DA’s Office
Manhattan District Attorney Cy Vance
By Forum Staff
Seventeen people and 10 companies have been indicted for maintaining an unlawful monopoly on the towing industry in the five boroughs through an elaborate series of schemes involving shell companies, insurance fraud, bid rigging, and other crimes, authorities recently announced.
Of the 17 suspects, eight call Queens home. And three of the 10 tow/collision companies are based in the World’s Borough: D&D’s Impressive Auto Collision, Inc. (Maspeth); Southside Collision and Towing, Inc. (Queens Village); and Authorized Auto Body, Inc. (Long Island City).
Charges in the indictment include enterprise corruption, first-degree scheme to defraud, fourth-degree conspiracy, and offering a false instrument for filing in the first degree, among others.
“If you were involved in a collision between June 2015 and December 2017 and received assistance from a tow company, chances are, you were an unwitting customer of an illegal enterprise that dominated New York City’s towing industry until our takedown today,” Vance said last Wednesday. “In order to ensure fair competition and encourage entrepreneurs to set up shop here in the city, we cannot allow this type of systemic fraud and abuse to persist within any industry. As alleged in this case, the defendants worked in concert to maintain a violent monopoly on the city’s towing business, in the kind of industry-wide racket that harkens back to an earlier era. The city may have changed, but in certain trades, pervasive corruption still exists.
According to authorities, at least six of the 17 suspects allegedly participated in insurance fraud schemes. As charged in the indictment, auto body managers were instructed to inflate insurance claims through fraudulent methods including:
Charging for additional damage the defendants themselves caused to vehicles after removing a disabled vehicle from a collision site, a practice known as “damage enhancement.”
Claiming to perform repairs that were never made.
Replacing parts that did not need to be replaced.
Claiming that vehicles were towed when, in fact, they were not.
Billing insurance companies for new parts that were actually used parts.
“The cost of insurance fraud and related crimes is shared by all consumers and it is important that we identify and prosecute those responsible for raising our insurance expenses,” said National Insurance Crime Bureau Northeast Regional Director Kevin Gallagher. “This investigation sends a strong message to others who may be contemplating engaging in insurance related crimes.”
At least four defendants are charged for their roles in tax fraud and money laundering schemes. According to investigators, the suspects laundered the proceeds obtained through various schemes by using check cashers to convert insurance claim checks made payable to their companies. The checks represented millions of dollars in collective insurance claims. Vance noted that the Manhattan DA’s Office’s Asset Forfeiture Unit is also filing a lawsuit against the indicted defendants seeking the forfeiture of more than $19 million associated with the alleged scheme.
“These defendants exploited the tow truck licensing procedures of New York City to advance their fraud, according to the charges,” said City Department of Investigation Commissioner Mark Peters. “Intentionally fabricating information to the City and corrupting its procedures is a crime.”