Massachusetts Officials Bust Auto Fraud Ring

A Lawrence, Massachusetts-based attorney has been arraigned in Essex Superior Court in Salem in connection with reportedly staging fraudulent motor vehicle accidents in Essex County.

Socrates A. Delacruz, age 34, of Methuen, faces charges of Motor Vehicle Insurance Fraud (5 counts), Larceny Over $250 (5 counts), Attempted Larceny Over $250 (4 counts), Conspiracy to Commit Motor Vehicle Insurance Fraud (4 counts), Conspiracy to Commit Larceny (4 counts). At arraignment, Delacruz pled not guilty and was released on personal recognizance. As a condition of release, Judge David Lowy ordered Delacruz to surrender his passport. Delarcuz is due back in court on May 20, 2008, for a pre-trial conference.

Earlier last week, five other defendants were arraigned on similar charges. Omar Castillo, age 35, of Methuen; James C. Hyde, age 56, of Boxford; Michael H. Kaplan, age 46, of Hampstead, NH; and Josue Jerez, age 28, of Lawrence, were all arraigned on charges of Motor Vehicle Insurance Fraud, Larceny Over $250, Attempted Larceny Over $250, Conspiracy to Commit Motor Vehicle Insurance Fraud, and Conspiracy to Commit Larceny. All pled not guilty at arraignment and are due back in court on May 20, 2008. On April 15, 2008, Troy L. Wheelwright, age 40, of Amesbury, was arraigned. Wheelwright pled not guilty and is due back in court on May 20, 2008. On Tuesday, April 8, 2008, Leo M. Lopez, age 28, of Lawrence was arrested and arraigned. Lopez is currently out on bail and is scheduled to appear in court on May 7, 2008.

In September 2006, a multi-agency investigation was initiated by the Attorney General’s Office, the Lawrence Police Department, and the Insurance Fraud Bureau’s (IFB) Lawrence Task Force, into alleged motor vehicle insurance fraud in the Lawrence area. Authorities allege that Lopez, Jerez and Castillo recruited individuals to participate in staged motor vehicle accidents in the Lawrence area. Investigators determined that these accidents never actually occurred, but were reported to insurance companies as actually having occurred. The recruited participants would give their vehicles to Lopez, Jerez or Castillo, who would then damage the vehicles, so as to make it appear to the insurance companies that the vehicles had been involved in motor vehicle accidents.

Authorities also allege that two chiropractors, Michael H. Kaplan, with offices in North Andover, and Troy L. Wheelwright, who worked in Haverhill, participated in the scheme by treating individuals involved in these staged accidents and then submitting fraudulent insurance claims. Two area attorneys James C. Hyde, who practiced in Andover, and Socrates A. Delacruz, who practiced in Lawrence, were also allegedly involved in the scheme.

The two chiropractors and the two attorneys are alleged to have knowingly employed Lopez and Castillo to recruit claimants for these staged accidents. Lopez and Castillo then allegedly directed the recruits to the chiropractors and attorneys for unnecessary medical treatment and legal representation for accidents that never occurred.

Both the attorneys and chiropractors allegedly submitted fraudulent injury claims and letters to the claimants’ insurance companies seeking payment for injuries they allegedly received in the staged accidents.

An Essex County Grand Jury returned indictments against all seven defendants on April 4, 2008.