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Mafia makes killing on crash-for-cash schemes

June 24, 2014

A mob-linked auto shop owner has been indicted for insurance fraud. The case of Ronald Galati illustrates the methods employed in this increasingly common form of financial crime and its links to organized crime rackets.

In the blog post below, the executive director of the Coalition Against Insurance Fraud comments that organized crime and insurance fraud are often perceived as involving immigrant groups, which is unfortunately true, and mentions Somalis in Houston as an example. The prevalence of auto insurance fraud by Somali-Americans in Texas is news to Money Jihad. Historically such schemes are associated with Palestinian Arabs in New York and the Russian mafia around the world.

We must admit that the deer blood ploy used in this case is pretty clever. If only Galati had used his cleverness for good rather than for crime…

From Insurance FraudBlog:

Mobster’s reputed auto cons show America can create its own defrauders

May 29, 2014 by Dennis Jay

“I live my life to cheat insurance companies — my high every day is to cheat insurance companies.”

That’s the motto of reputed Philly mobster Ronald Galati, say accomplices arrested in a widespread sweep yesterday. A grand jury in the city of Brotherly Love indicted 41 yesterday for allegedly staging auto crashes and faking damage to previously banged-up cars. Galati and his body shop collected millions from insurers in the scam, prosecutors say.

Investigators say Galati even had shop employees gather and store deer blood, hair and carcasses as props in photos later submitted with claims to insurers.

Participants in the long-running scam include body-shop employees, tow- truck operators, a city cop and two insurer adjusters — plus Galati’s wife, son and daughter.

Galati, an auto mechanic at American Collision, Inc., had strong mob ties and was out on bail for allegedly masterminding a triple murder-for-hire plot against men he believed had testified against him involving the insurance plot?

Much of organized crime involving insurance in America focuses on immigrant groups — Russians in New York City, Armenians in Los Angeles,  Dominicans and Cubans in Miami, and Nigerians and Somalians in Houston.

This case reminds us that we still have home-grown gangsters likely defrauding insurers and their policyholders in every major city…

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