Full story in the Times Union
By Grace Jiang
The silver Honda seems to appear out of nowhere.
In a TikTok video that went viral in October 2024, the car suddenly swerves in front of another vehicle on a New York highway, then slams on its brakes. The driver behind manages to stop in time — but then the Honda does something unexpected: It reverses straight into the other car.
Four people jump out, inspect the damage and begin filming the license plate with their phones. All in one swift motion, like a rehearsed routine. According to law enforcement, that’s exactly what it was.
Nine months after the collision, Queens District Attorney Melinda Katz charged two men — Jaime Huiracocha and Victor Murillo — with staging that crash and two others, then filing insurance claims for fake injuries. Court records show Huiracocha was listed as a plaintiff in two personal injury lawsuits connected to motor vehicle accidents.
The incident was one of thousands of staged car crashes that prosecutors say have turned New York’s roads into a profitable and dangerous criminal enterprise. Now, Gov. Kathy Hochul is proposing to spend $2 million to help the State Police crack down on what she calls a “system riddled with bad actors and fraud.”
The money, included in Hochul’s executive budget, would fund investigations and build criminal cases against insurance scammers. The more controversial proposal is her desire to tighten the legal definition of “serious injury,” limit payouts for at-fault drivers, and bar people breaking the law at the time of a crash from collecting damages for pain and suffering.
“These criminals are putting lives at risk,” Hochul said Thursday at a news conference in front of what she called a “graveyard of vehicles” damaged in crashes. “Who gets shafted in this? New York motorists — whether it’s parents with kids in the back seat or a senior citizen trying to get to a doctor.”
Insurance companies reported 44,361 suspected motor vehicle fraud incidents to state regulators in 2024, an all-time high and an 83% jump from 2020 levels. New York recorded 1,729 staged crashes in 2023, the second-highest number in the nation. About 75% of fraud reports involve staged accidents or fraudulent no-fault claims, according to the state Department of Financial Services.
Driving up rates
New York has the highest auto insurance rates in the nation, averaging $4,030 annually for full coverage — $1,500 more than the national average.
In Brooklyn, where half of households rely on cars, rates climb to $6,700 per year. Staged crashes and associated fraud inflate premiums by as much as $300 per year on average, according to the Insurance Information Institute.
“New Yorkers are paying far too much in car premiums,” Hochul said. “This doesn’t happen because New Yorkers are doing something wrong: It exists because of rampant fraud and runaway litigation costs.”
Under Hochul’s proposal, drivers who are uninsured, driving drunk or committing a felony at the time of a crash would be barred from collecting non-economic damages like pain and suffering. The plan would also limit payouts for drivers deemed “mostly at fault” in accidents, a change that would align New York with most other states.
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“Auto insurance fraud is not a paperwork crime,” James said. “It is organized, it is deliberate, and it often intersects with other criminal activities.”
A legal buzzsaw
The proposal also includes new criminal penalties for anyone who organizes a staged accident, not just the driver, and would give insurance companies more time to investigate and report fraud, which extends the current 30-day deadline.
Hochul insisted the changes would protect innocent drivers. “If you’re not at fault, you won’t be impacted,” she said. “If you are at fault, you’ll still get your lost wages and medical coverage. You’re just not going to get the extra cost awards for pain and suffering.”
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Gil Cygler, vice chair of the Brooklyn Chamber of Commerce, said the reforms would help honest drivers. “By tightening the vague ‘serious injury’ claims threshold with objective medical standards, New York can reduce jackpot-style lawsuits while protecting those who are seriously hurt,” he said.
To ensure consumers benefit from the changes, Hochul said she would direct the Department of Financial Services to reexamine the state’s Excess Profit Law, which requires insurers to return excessive profits to policyholders. The proposal would also require insurers to explain rate increases to customers and offer discounts to drivers who use technology that reduces unsafe driving.
Hochul pointed to Florida as a model, noting that the state saw auto insurance rates drop by up to 20% after implementing similar reforms.
“No one has done this before,” Hochul said. “It’s been too controversial. But I don’t mind taking this on.”
Huiracocha and Murillo, the alleged Belt Parkway scammers, face five to 15 years in prison if convicted. Huiracocha’s next court appearance is scheduled for Feb. 25 in Queens Criminal Court.