Evening star., 1937-05-23
NEW Y0RKATWAR
ON 2b|C RACKETS
Insurance Frauds and Fake
Accident Claims Under
Legal Fire.
By the Associated Press.

By the Associated Press.
NEW YORK, May 22.-Twin multi
million-dollar rackets - insurance
frauds and fake accident claims
tonight were under the legal gunfirs
Of Federal and local authorities
Fifteen arrests in two days-includ.
Ing physician and two lawyers
several confessions and ominou!
threats of reprisal constituted The
initial results of seven-months
undercover campaign.
The arrest Of scores of others
officials said awaited only the com.
pletion of preparations for handling
the prisoners.
Adding impetus to the Government
drive was continued local campaign
which in few months last Winter
ensnared 1T physicians, lawyers ane
runners" sent So other lawyers ur
for Bar Association discipline, ane
reduced accident negligence" cases
a. per cent.
With each step of the Investigations
new ruses by which the swindlers kept
lars have been uncovered.
Here, according to Assistant United
States Attorney Lamar Hardy and AS
sistant District Attorney Bernard
Botein. are some of the racketeers
numerous methods:
The latest Is filing claims on faxed
disability cases-heart trouble, arth-
~ f,,to sie Nd fol
cunningly simulated by unethica.
doctors through drugs, over-exertion
timed heart attacks and plain we'll
coached acting.
Then there's the same idea in re-
verse-ferreting out fatally diseased
persons, pawning them of on insur-
ance companies as healthy. and
forging death certificates and destroy
Ing the tell-tale remains when the
victims die.
There are also the familiar stagec
accidents, brought about by scouts
with scores of willing victims,
always on the watch for broken steps
slippery floors and poorly lighted hall.
ways where accidents conveniently car
happen.
Reliable Ambulance Chasing.
Finally there's the old reliable am.
bulance chasing, with taxi drivers
drug store clerks, doctors, hospita
employees and even policemen en-.
couraged by bribes to tip off swindle
rings about accidents that can be
blamed on somebody to yield cash
After eight months of chasing am.
bulance chasers, Botein estimated
their annual toll in New York City al
$4,000, 900 to s10,OO0,0O0.
One ring he reported, "employed
4 short-Wave radio set to intercept
emergency calls and try to beat am
balances to accidents Members OF
the ring, at first competitors, combined
into trust with rules that forbade
encroachment on each others lega
preserves Each made about 5000
week.
One notorious runner of dignified
appearance bribed hospital employees
TO let him put on white surgeon,
apron and carry stethoscope through
wards. He would persuade acciden,
cases to let him call in his lawyer.
Had 5000 Pending Cases.
~One lawyer We convicted had 5000
pending negligence cases. An in
surance broker earned $25O,O0O a
year for at least t1ve years, mostly on
settlements, until he was jailed"
Samuel Bernstein, sent to prison
last month for = maximum of three
years, was held responsible for hun
dreds Of thousands of dollars in
ulegitimate claims in a short period
The depredations against insurance
companies by a Brooklyn ring, 80
members OF which pleaded guilty last
January were set at 100000.
The racket's ramifications and Or
eanization were quickly demonstrated
after this weeks arrests. Within a
Jew hours, Hardy declared, a carload
OF glnmen was cruising the city in
search OF one of the released de-
PENDANTS
One outside" agent Of a ring
sought habeas corpus writ to free
another defendant, who pleaded to be
kept In Jail for protection.
Mail Fraud to Be Charged.
The Governments weapon in the
chase is the charge OF using the mails
to defraud.
Tonight the city's grand jury nves-
tigation, halted after the latest arrests
to go over the confessions, was ready
Tor more seizures Monday.
On the Federal side, Hardy COM
mented.
These IS arrests represent only the
opening skirmish, for, as a result of
several thousands Of records of actual
conversations, evidence is already in
Inc possession of the United States
attorney which will lead to the prose-
cution OF many more participants in