Gillen among sponsors of House bill that would make it a federal crime to stage accidents, defraud insurance

Staging an automobile crash and then submitting fraudulent insurance claims would become a federal crime under a new bipartisan bill introduced in the House of Representatives Thursday by four lawmakers, including Long Island Rep. Laura Gillen.

The Stop Auto Fraud Act of 2026 would target what law enforcement officials contend is a rapidly growing nationwide scheme whereby drivers, passengers and co-conspirators fabricate car accidents in an effort to bilk insurance companies for large payouts, often with the help of connected law firms and unscrupulous medical providers.

The bill, sponsored by Gillen (D-Rockville Centre), Rep. Josh Gottheimer, a New Jersey Democrat; Rep. Troy Nehls, a Texas Republican, and Vince Fong, a California Republican, would allow prosecutors to seek up to 10 years in prison, plus fines for people convicted of staging a crash.

If the fabricated accident results in serious injuries, participants could face 20 years behind bars plus fines while bogus crashes that result in fatalities could lead to a sentence of life in prison and financial penalties, the bill states.

"Long Islanders pay some of the highest car insurance rates in the country and ‘crash for cash’ schemes on our roads are driving rates even higher," Gillen, the legislation's primary author and its lead sponsor, said in a statement. "When fraudsters stage car wrecks to scam their way to huge payouts, they’re putting lives at risk and forcing responsible drivers to bear the costs."

But without a companion Senate bill, and with just weeks to go before the end of the House session and before the November election, passage of the act could be a challenge.

State officials contend that staged accidents and auto fraud can add as much as $300 to the car insurance rates of New Yorkers, which, on average, total more than $4,000 annually, or nearly $1,500 above the national average.

Gillen's bill has the support of major insurance providers and trade organizations, along with several trucking, busing and vehicle rental groups. 

Newsday has — for more than a year — reported on the vast, interconnected network of lawyers, doctors and victims, often newly arrived immigrants, who authorities contend stage accidents, whether on the road, on construction sites or on city sidewalks, fabricating injuries and subjecting themselves to unnecessary surgeries to collect large payouts.

Investigators say some operations extend well beyond the people in the crashes, involving recruiters, medical providers and lawyers that can turn a deliberately caused crash into thousands of dollars in insurance payments.

Some of the schemes have widened to involve allegedly phony falls from construction sites and slip-and-fall injuries on sidewalks, and have attracted the attention of state lawmakers, who earlier this year passed sweeping changes that cap damages and enable prosecutors to seek criminal penalties against any individual involved in the alleged fraud.

The State Department of Financial Services received 43,000 suspicious reports related to auto insurance fraud in 2025, an 80% increase from five years earlier, according to Gov. Kathy Hochul.

Last month, two Brooklyn men were sentenced to prison for orchestrating a staged accident scheme that included a crash involving a Massapequa motorist and another that went viral after dashcam video showed the suspects cutting off a Queens woman on the Belt Parkway and then smashing into her while in reverse.

"An ecosystem of unscrupulous lawyers, medical mills and shady lawsuit funders has turned our streets and courtrooms into organized crime scenes," said Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York. "We're thrilled to see Rep. Gillen and a bipartisan group of her colleagues addressing these scams. They drive up costs for everyone, affecting everything from car insurance to deliveries to rideshare and taxi services."

 

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.