Pennsylvania Attorney General Tom Corbett's continuing investigation into insurance fraud has resulted in another round of arrests - 24 people accused of falsely claiming to be state residents in order to obtain lower rates on their automobiles.
The practice, known as rate evasion, annually leads to $12 million to $15 million in claims on Pennsylvania policies that should not have been written, Corbett said today in a statement announcing the arrests.
"That money is not coming out of the pockets of the insurance companies," Corbett spokesman Nils Frederiksen said. "It's coming out of the pockets of every other driver in Pennsylvania."
Accidents attributed to drivers posing as Pennsylvanians drive up premiums for everybody else in the state, he said.
Of the arrested, 17 live in New York and six in New Jersey. The 24th lives in Reading; her alleged crime is helping her brother, a New Yorker, obtain a false Pennsylvania address - hers.
Urban areas such as New York tend to have more accident claims and, consequently, higher rates than rural areas in nearby states.
For some, claiming a false Pennsylvania address saved $4,000 a year in premiums, said Corbett, who is seeking the Republican nomination in the 2010 governor's race.
Corbett said the arrested had provided false residency information to the state Department of Transportation to get a Pennsylvania license or vehicle registration. They then used that certification to get Pennsylvania policies, he said.
The charges resulted from a number of ongoing investigations, including one that resulted this year in the arrest of Morrisville's Michael Bozzi, operator of Bucks County Insurance. He was accused of running a scam that signed up hundreds of New York City drivers as Pennsylvanians between January 2005 and September 2006.
Each of the new defendants is charged with a felony count of insurance fraud, which is punishable by up to seven years in prison and a $15,000 fine.
Each also has been charged with misdemeanor counts of insurance fraud and filing false applications for certificate of title or registration. Each of those counts carries a maximum prison sentence of five years and a $10,000 fine.