£5m insurance scammers convicted

15 April 2011, 06:52 | Updated: 15 April 2011, 11:12

More than thirty members of a group behind a £5m car insurance scam have been convicted of conspiracy to defraud.

The Luton-based gang set up crashes involving unsuspecting members of the public, and also filed claims about completely made-up accidents.

Police say it was one of the biggest fraud rings seen in the car insurance industry.

The convictions of more than 30 people came after research showed insurance premiums soared by a record 40% during the past year, as high levels of fraud and personal injury claims push up the cost of cover.

A five-year investigation finished on Thursday 14 April 2011 with three of the last four defendants found guilty at Luton Crown Court.

The probe, dubbed Operation Exhort, saw 39 defendants appear at crown court at separate hearings over three years, representing one of the largest fraud rings the industry has seen.

Earlier court proceedings could not be published until now due to legal reasons, police said.

Bedfordshire Police said the entire investigation led to 33 defendants pleading guilty to a variety of offences in connection with the £5.3 million insurance fraud.

The remaining eight pleaded not guilty at two separate trials - seven have been convicted and one acquitted. A further eight were cautioned for their involvement.

On 14 April 2011, Kamsan Mahmood, 42 of Long Meadow Farm, Chalton; Istafa Hussain, 35, of Lincoln Road, Luton; and Peter Charlery, 45, of Long Meadow Farm, Chalton, were all found guilty of conspiracy to defraud, Bedfordshire Police said.

Irtiza Fazal, 40, of Lincoln Road was acquitted by the jury after a seven-week trial.

Mahmood, Hussain and Charlery have been remanded in custody to be sentenced on April 27 at Luton Crown Court.

Police, who investigated with the Insurance Fraud Bureau, said they uncovered a web of deceit involving people from professions including the legal, medical and motor trade.

Assistant chief constable Andrew Richer, Senior Investigating Officer, said: "In 2006 Luton was a known hotspot for offences, also known as 'cash for crash', but in 2011 that is no longer the case.

"The case had grown considerably in size and complexity since the initial lines of investigation were pursued in May 2006.

"This was a calculated and systematic fraud perpetrated on numerous victims.

"In some cases collisions were engineered to involve unsuspecting motorists and in other cases claims were made about accidents which were entirely fictitious.

"This kind of fraud substantially inflates insurance premiums for every honest driver in the country.''

Insurance Fraud Bureau director Glen Marr said the result "once again demonstrates the effectiveness of the insurance industry and police working collaboratively to disrupt fraudsters and, protect innocent motorists and genuine policyholders.

"Additionally, it reinforces the intolerance of the insurance industry towards fraud.

"Undetected general insurance claims fraud is estimated to cost the industry £1.9bn a year and that adds on average £44 to every policyholder's annual insurance premium.

"We will continue to find, pursue and expose criminals involved in organised insurance fraud.

"The message is loud and clear - seek to defraud an insurer and you risk serious repercussions, to include prosecution and seizure of assets.''