ALLSTATE FILES SUIT TO RECOUP MILLIONS; 45 NAMED IN ACTION TO COUNTER FRAUD.

Byline: Deborah Adamson Daily News Staff Writer

Allstate Insurance announced Monday it is suing 45 Los Angeles-area individuals and businesses in one of the largest auto insurance fraud cases ever filed.

The Illinois-based insurer said it is serving papers to lawyers, doctors, chiropractors, office staff and others for $107 million in damages. The defendants include a chiropractor who has practiced in Panorama City.

Allstate, the nation's second-largest personal insurer, is suing under a recently-enacted California law that allows insurers to ask for damages equal to triple their actual losses, plus $10,000 for each claim. The firm hopes the lawsuit's high damages will deter other fraud.

``We are committed to driving profit out of insurance fraud,'' said Edward Moran, assistant vice president for Allstate's Special Investigative Unit.

Defendant Gary A. Laff of Beverly Hills denied the claims Monday, according to his attorney, Richard Moss. The other defendants or their attorneys could not be reached for comment.

Insurance fraud costs the nation $6.3 billion, amounting to $200 to $300 in additional premiums paid by every insured household, Allstate said.

Out of 26,000 questionable automobile collision claims reported in 1997, 9,000 occurred in California, according to the National Insurance Crime Bureau. Los Angeles County made up about half of all California claims last year.

``These are not victimless crimes,'' said Dennis Kass, Allstate's attorney. ``This is something that victimizes the public at large.''

State authorities have been apprised of Allstate's own investigations, he said. At this time, they support the lawsuit but have not said whether they are taking any action.

Department of Insurance officials said they are interested in the case but that a higher burden of proof is needed for them to pursue a criminal case compared to the civil case Allstate has compiled.

Allstate investigated 99 accidents that included 326 individual claims from January 1992 to April 1996.

The company has obtained confessions from 78 former claimants and a statement from a woman who said she had participated in up to 5,000 staged accidents.

Allstate is suing eight attorneys, 19 doctors and chiropractors, eight people they claim are cappers and 10 office staff defendants.

Cappers, as they are known in the industry, stage the accidents. They are paid by people controlling the ring such as attorneys and doctors, the insurer said.

``The lion's share of money garnered from the scheme went to those in charge of the ring,'' Moran said. ``Our action is to take away profits from people at the top.''

Kass said the ring targeted many insurance companies, but the bulk of the claims were made to Allstate.

The most common strategy is the ``swoop and squat,'' where they identify a victim driving in the right lane of a freeway while another car pulls alongside it to prevent it from changing lanes. A third car then swoops in front of the victim and brakes suddenly, causing a crash.

Another tactic is to ram another car on purpose, Moran said.

A third is called a ``paper-staged collision.'' A damaged vehicle is used or two cars are made to collide to fool insurers.

Moran's advice for people involved in car accidents: File a police report, count the number of passengers in the other car and get their names, phone numbers and driver's licenses and notify your agent or insurer if you suspect fraud.