Conviction made in Toronto-based staged collision ring: IBC

The Insurance Bureau of Canada (IBC) is applauding what it calls a strong sentence handed down in connection with a “directing mind of several clinics” involved in a Toronto-area staged collision ring.

Vishnukanthan Sabapathy – who pleaded guilty to two counts of fraud over $5,000 for his involvement in false billings from health clinics and for making false insurance claims – was sentenced to two years less a day in jail, notes a statement from IBC. Sabapathy was also ordered to pay $1.3 million in restitution for his role in the scam (he paid $500,000 up front and was ordered to pay $800,000 more), the statement adds.

It is hoped the “significant” sentence will “act as a strong deterrent for others considering this type of illegal conduct. It makes it clear that the courts are taking these crimes more seriously by imposing harsher penalties and restitution,” says Rick Dubin, IBC’s vice president, Investigative Services.

IBC reports that Project Whiplash – a Toronto Police Services fraud investigation, supported by IBC, member insurance companies and the Financial Services Commission of Ontario – has cost the Ontario public more than $4 million in fraudulent claims.

With regard to the latest scam, IBC reports that the ring submitted auto insurance claims they purported to have been signed or authorized by several Ontario registered health practitioners, including five chiropractors, a massage therapist and a kinesiologist, when they had not been.

The fraudsters further staged several auto collisions, made accident reports to police and filed false injury claims, which resulted in payments for medical treatments that were never provided and income replacement benefits based on false employment submissions, the IBC statement notes.

“Insurance crime is big business that siphons dollars away from our health care system, ties up emergency services and our courts and drives up insurance premiums,” Dubin says, adding that Ontario auto insurance fraud “adds $200 to $300 to everyone premium.”

The Ontario legislature recently passed Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act.

Among other things, the bill will allow for the establishment of a more efficient and effective dispute-resolution system, and reduction of fraud and abuse in the towing and vehicle storage industries.

“Everyone – including the insurance industry – is in agreement on one thing: auto insurance in Ontario is far too expensive,” Palumbo said at the time. “Now we have an opportunity to begin fixing the system once and for all.”