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18 Charged in Insurance Fraud Scheme

Suspects earned millions after they allegedly choreographed more than 100 phony auto accidents using rental cars, state officials say.

January 29, 2003|Zeke Minaya | Times Staff Writer

Eighteen suspects were charged Tuesday with allegedly participating in a multi-state insurance fraud ring that choreographed more than a hundred fake car crashes over a 10-year period, state officials said.

The scheme, which resulted in arrests in Los Angeles and Phoenix, netted $2.5 million from more than 50 insurance carriers, investigators said. The suspects stood to gain another $3.7 million in pending insurance claims, according to authorities.

Fifteen of those named in the criminal complaint were arrested Tuesday including Ahmed Khan, 39, of North Hollywood and Keith D. Washington, 39, of Reseda, who authorities said were among the leaders of the ring.

Khan's brother, Munir Sharif Khan, 40, of North Hollywood, is still being sought by authorities, said Susan Mustaffa, a criminal investigator with the California Department of Insurance.

The fourth alleged ringleader, Curtis Shaw, 58, of Tarzana, an attorney who once represented Motown singer Marvin Gaye, turned himself in to authorities Tuesday afternoon.

"This ring was pretty greedy in how they did it, the fact that they did everything," Mustaffa said. "They orchestrated the whole thing."

According to investigators, the ring operated like a production company filming a movie. Leaders would recruit drivers and victims, many of them in Phoenix, investigators said. The recruits would allegedly fly to Los Angeles where they would rent cars for use in the crashes.

The Khans would then direct the rental drivers and their passengers to an intersection, most often in the San Fernando Valley, where they would be positioned to be rear-ended by non-rental cars driven by additional out-of-town recruits, authorities said.

The drivers were highly insured by the ringleaders and the accidents were conducted mainly at night to minimize the chances of having witnesses, investigators charged.

No one was severely injured in the 30-to-50-mph crashes, which did not involve any motorists not linked to the plot, investigators said.

Physicians, however, would fill out medical reports detailing serious injuries, state officials said.

Among those arrested Tuesday were three doctors: Clifford A. Davis, 75, of Encino; and Paul L. Guidry, 39, and Adrienne T. Alston, both of Los Angeles.

Also arrested were three chiropractors: Ahmad Entezami, 40, of Chatsworth; and Marc H.P. Nadreau, 45, and Gregory A. Ball, 43, both of Los Angeles.

The arrests were announced in a news conference by state Insurance Commissioner John Garamendi, whose office dubbed the scheme "Operation Rent and Wreck." Agencies involved in the task force that investigated the ring included the California Highway Patrol, the Los Angeles County district attorney's office and the state insurance departments of California and Arizona.

The suspects face charges of conspiracy, conspiracy to commit insurance fraud, grand theft and tax fraud, officials said.

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