The vehicle collisions looked like typical South Florida accidents with motorists and passengers reporting they needed treatment from chiropractors and massage therapists.
But investigators said the crashes were carefully staged by willing participants who were trained how to defraud the insurance system to make money for themselves and a highly organized group of medical professionals, clinic owners and recruiters.
Investigators announced charges Thursday against 33 people they said were involved in staging accidents for insurance fraud -- the latest hit in a three-year investigation that identified about $20 million in fraudulently obtained payouts from insurers.
"If you get upset about your car insurance premiums going up, this crime is one of the reasons why," said William J. Maddalena, the assistant special agent in charge of FBI Miami. "Every time an insurance payout is made for a staged accident in Florida, we all feel the pain in the pocketbook."
Operation Sledgehammer, a state and federal investigation, has led to charges being filed against a total of 92 defendants from Palm Beach, Broward and Miami-Dade counties. Those already convicted have been ordered to pay more than $5 million in restitution to insurance companies so far, prosecutors said.
The operation got its code name when undercover investigators saw suspects using a sledgehammer to make vehicles look like they'd been in an accident.
The fraud involved a "massive," complicated, highly organized scheme that investigators said included everyone from clinic owners and medical staff who provided fraudulent diagnoses and prescribed fake treatment, to office workers who billed for the services, and recruiters who found accident "victims" and trained them to stage collisions on the streets and highways of South Florida.
The criminal charges filed this week targeted 33 people from West Palm Beach, Lake Worth, Weston, Parkland, Davie, Hollywood, Boynton Beach, Greenacres, Doral, Miami and Hialeah with a slew of charges including mail fraud and money-laundering conspiracies, structuring financial transactions and participating in staged-accident fraud.
The scheme dated from about October 2006 to December 2012 and the defendants staged accidents and submitted false insurance claims through 21 chiropractic clinics in Palm Beach and Miami-Dade counties that they controlled, authorities said.
Of the 33 charged, 26 have been arrested or agreed to surrender, federal and state law enforcement officials said at a Thursday afternoon news conference in the U.S. Attorney's Office in West Palm Beach.
The ringleaders recruited chiropractors Lazaro Rodriguez, 58, of Doral, and Kenneth Karow, 53, of Boynton Beach, and others to serve as the named owners of some of the clinics, investigators said.
Five of the defendants, including alleged ringleaders Vladimir Lopez, 38, and Lazaro Vigoa Mauri, 45, both formerly of West Palm Beach, have fled to Cuba and they and the other defendants who have not yet been caught are considered fugitives, authorities said.
Maddalena said the investigation was kicked off by a tip from a member of the public and urged anyone with information to call their local police department.
The participants in the fraud were trained by recruiters on how to make the accidents look realistic, how to file police reports and insurance claims, how to fake injuries and where to go for treatment, Maddalena said. The ringleaders made sure that insurance checks were deposited into accounts they controlled so they could pay the participants, he said.
Of the 92 people charged to date in the fraud scheme, the U.S. Attorney's Office filed federal charges against 56 of them and the Palm Beach State Attorney's Office filed state charges against 36 of them.
Lawrence Schechtman, 45, a chiropractor from Parkland, Olinda Rodriguez, 39, a massage therapist from West Palm Beach, and Iris Roca, 41, a massage therapist from Davie, were charged separately with participating in staged accident fraud schemes and are expected to surrender in the next few days.