It took the police six solid months of investigation to break a complex insurance fraud racket which culminated in 22 people facing criminal charges.
Insurance sources told this newspaper that the criminal ring raked in over €250,000 in fraudulent payments from a web of collusion involving staged accidents, inflated requests and the submission of multiple claims filed with different insurers using the same damaged vehicles.
Eight insurance companies are claiming to have been defrauded between 2009 and 2013: Untours, Elmo, Atlas, Gasan, Allcare, Citadel, Fogg (Argus) and Middlesea.
The criminal racket was so sophisticated that it is thought a person with insider knowledge of the precise workings of insurance companies must have masterminded it all, sources said.
Of the 22 people accused, two admitted to the charges before Magistrate Aaron Bugeja yesterday and four pleaded not guilty. Another 14 cases cases were put off to a later date to allow for possible out-of-court settlements to be finalised. Two other individuals were expected to be charged but one could not be traced and the other did not show up.
Defence lawyers Michael Sciriha and Joe Giglio argued the law stipulated that if payment was effected before the judgment was passed, the punishment could be downgraded.
Insurance fraud is often perceived as a victimless crime
One of those who pleaded guilty, a 33-year-old man from Tarxien, cannot be named by court order since he could be called to testify against third parties. He admitted to defrauding Atlas, Gasan Mamo and Untours in 2013 and to giving false declarations with the aim of receiving undue payments.
A representative of Atlas confirmed that the accused had repaid €3,000 in cash, while a representative from Gasan said no payments had been made over a claim involving two vehicles damaged beyond economical repair in a collision. The claim has not been withdrawn.
Joseph Sultana, 38 from Qormi, also pleaded guilty to defrauding Untours of €1,100 in May, 2012. A representative from Untours testified that the amount had been repaid in full.
Both men had hitherto clean criminal records. Magistrate Bugeja ordered a pre-sentencing report to be drawn up for both men.
In a statement, the Malta Insurance Association said this was the latest episode in the industry’s ongoing battle against insurance fraud. The arraignments resulted from intensive police investigations triggered by state-of-the-art anti-fraud software in which motor insurers had invested heavily.
“Insurance fraud is often perceived as a victimless crime,” the association said.
“The reality is very different. The amount of premium paid by policyholders is affected by additional costs induced by insurance fraudsters. Insurers are therefore relying on greater vigilance of suspicious claims to ensure that honest policyholders do not end up subsidising fraudulent claims through higher premiums.”
The association thanked the police economic crimes unit, in particular prosecuting officer Rennie Stivala, as well as the insurers concerned for their effort and for the strong collaboration which helped achieve results.