Attorney General Mike Cox Announces Major Detroit Auto Insurance Fraud Ring Busted

16 accused of nearly $1.5 million in fraudulent claims

LANSING, Mich., May 8 -- Attorney General Mike Cox, the Michigan State Police, National Insurance Crime Bureau (NICB), and Office of Financial and Insurance Services (OFIS) announced today that a cooperative federal, state and local law enforcement effort has cracked a sixteen-member auto insurance fraud ring operating out of metro-Detroit.

An investigation conducted by the NICB uncovered the scheme in which individuals would buy vehicles at auto auctions for a few hundred dollars, "resell" the car to another member of the ring for a few thousand dollars, and then file multiple claims for damages suffered when the vehicles were allegedly involved in accidents -- allowing the ring members to collect thousands of dollars on a car purchased for a few hundred dollars.

"Crime rates and false claims drive insurance rates through the roof," said Cox. "By cracking down on these type of fraud rings, we can begin to have a significant impact on reducing the cost of insurance, especially in our core urban areas."

The total amount of fraud perpetrated by the group is approximately $1.47 million. A sweep by the MSP this week has led to the arrest of ten of the suspects. MSP continues to search for the remaining six suspects.

All but one of the ring members face one count of racketeering, and each face at least one and up to five counts of insurance fraud. If convicted, maximum penalties range from four years and/or $50,000 up to 20 years and/or $350,000.

"Combating insurance fraud is everybody's job, from the insured to the insurer, because these crimes affect all of us when we pay premiums," said Judith Fitzgerald, NICB Senior Vice President. "NICB is extremely pleased with the results of the investigation so far as we know insurance fraud is a pervasive problem. We appreciate the efforts of all parties involved and their cooperation on this investigation."

"These arrests are an excellent example of cooperation between agencies," stated D/F/Lieutenant David W. Peltomaa, commander of the Michigan State Police Special Investigation Section. "By working with the Attorney General's Office and several local, state and federal law enforcement agencies, we were able to apprehend ten suspects in this case, four of which were habitual offenders."

"OFIS is very concerned about insurance fraud as it contributes to the high premium rates in urban areas -- and across the state," said Commissioner Linda A. Watters. "I am proud that Luke Hasbany, one of the many dedicated and professional OFIS insurance investigators, participated in the investigation and represented us so well."

  Those already arrested include:
  1.  Pamela Joyce Higdon (Detroit), insurance fraud (2), racketeering (1)
  2.  Keith Mitchell Higdon (Detroit), insurance fraud (2), racketeering (1)
  3.  Brian Coleman Barge (Detroit), insurance fraud (1)
  4.  Shawn Braswell (Detroit), insurance fraud (3), racketeering (1)
  5.  Cornell Travis Burns (Detroit), insurance fraud (5), racketeering (1)
  6.  Rawleigh Helen Cannon (Oak Park), insurance fraud (4),
      racketeering (1)
  7.  Charity L. Irby (Inkster), insurance fraud (4), racketeering (1)
  8.  Rolin Pettway (Detroit), insurance fraud (5), racketeering (1)
  9.  James Arleavis Scott (Detroit), insurance fraud (4), racketeering (1)
  10. Tommy R. Clark (Detroit), insurance fraud (4), criminal enterprise (1)

A criminal charge is merely an accusation, and the defendant is presumed innocent until and unless he is proved guilty.