The Organised Crime Group (OCG) targeted 14 insurers during four year nationwide commercial property fraud
IFED’s biggest case of commercial property fraud, with OCG stealing £1m from insurers
OCG avoided detection by ensuring a loss adjustor didn’t attend the same venue twice
On Thursday 8th November 2018 an organised crime group (OCG) based in North London, who stole £1million from insurers by making fraudulent claims of property damage and loss of earnings at various bars and restaurants across England, were sentenced to a collective 14 years in prison.
Following an investigation by the City of London Police’s Insurance Fraud Enforcement Department (IFED), all five members of the OCG were sentenced at the Inner London Crown Court for a mix of conspiracy to defraud and money laundering offences.
Details of each of their sentences are listed below:
- Kashif Bhatti, 35, of Harringay, London, was sentenced to two years in prison
- Ramone Carty, 36, of Neasden, London, was sentenced to three years in prison
- Jurelle Hayles, 30, of Edmonton, London, was sentenced to 20 months in prison, suspended for two years and 300 hours unpaid work
- Nyron Hughes, 35, of Chingford, London, was sentenced to four years in prison
- Tarquinn Orgill, 34, of Chingford, London, was sentenced to five years in prison
IFED first became aware of the OCG’s fraudulent activity after a referral from Zurich. They were suspicious of a claim they received for property damage and business interruption at a wine bar in Sleaford, Lincolnshire, caused by a burst water pipe.
Fraud investigators at Zurich examined the claim further and established that the wine bar didn’t actually hold an alcohol licence and wasn’t open for trade prior to the claim. They then referred it onto Insurance Fraud Enforcement Department to investigate.
Officers uncover scale of the fraud
After confirming that the claim against Zurich was indeed fraudulent, IFED went onto uncover several other instances of fraud carried out by the OCG in the preceding years.
It was discovered that the OCG had been operating nationally and had targeted a total of 14 different insurers using the same tactic, leading to an investigation carried out by IFED on a scale that had never before been attempted within the unit or the wider insurance industry.
The lead officer in the case exposed several members of the OCG early on in the investigation by obtaining their fingerprints through a forensic examination at the wine bar in Lincolnshire, which didn’t feature in the initial referral from Zurich.
How the OCG carried out the fraud
Between December 2012 and April 2016, the OCG identified four bars and one restaurant across England, and one by one, they used them to facilitate their fraud. After leasing each of the properties using a shell company, they proceeded to incept a total of 26 commercial property policies, each with a different insurer, and then make a fraudulent claim on each policy.
Each of the claims were for the same issue, caused deliberately by the OCG, an escape of water from a burst pipe leading to significant damage to the property and subsequent loss of earnings while the premises stopped trading. A loss adjuster would then attend the premises to check the validity of the claim. In reality, the venue was never open for trade. False leases and documents were supplied to loss adjustors by the OCG to portray that a legitimate business was in operation over a two year period prior to the claim.
In total, 15 of the policies were subject to successful claims and £944,206 was paid out. This money was then laundered through various bank accounts held by members of the OCG and eventually withdrawn in cash.
In addition to the money that the OCG stole from insurers, Hughes, Bhatti and Hayles also pleaded guilty to defrauding American Express to the value of £62,497. They fraudulently obtained gold business accounts and misused the cards for high value transactions. IFED’s investigation revealed that Hughes & Orgill, who are cousins, were the main orchestrators behind the fraud and were involved in all of the claims made against each property. The other suspects were brought into the fraud to help front the policies and claims.
OCG attempts to avoid detection
Before making each claim, the OCG checked with the insurer to find out which loss adjuster they used, this was done to avoid them from attending the same premises twice. In instances where the same loss adjuster was due to visit, the OCG withdrew their claim, stating that the landlord of the premises was liable for the losses and would cover the costs.
To further avoid detection, they chose a different geographical location for each premises to reduce the chance of having the same loss adjustor visiting the venue. As well as this, whenever a loss adjuster did visit, a member of the OCG pretended to be the plumber who had been called by the claimant to fix the burst pipe or as the venue manager.
The OCG also attempted to distance themselves from the fraud by changing their names by Deed Poll.
Several arrests in Day of Action
In February 2016, IFED planned a London-based raid to carry out a simultaneous execution of warrants & arrests. During the operation, Hughes, Orgill and Hayles were all arrested. Bhatti and Carty were voluntary interviewed a few days afterwards.
Confiscation proceedings will now be started under the Proceeds of Crime Act (POCA) to recover any criminal benefit gained from the OCG’s fraudulent activity.
City of London Police’s Detective Constable Daniel Dankoff, who led the investigation for IFED, said:
“The OCG used a complex set of tactics to try and remain undetected and defraud numerous members of the insurance and banking industries for several years – which shows that the bigger the lie, the more the insurance industry may believe.
“However, thanks to the initial referral by Zurich, we were able to undercover the full extent of their fraudulent activity, dismantle the OCG and bring them to justice.”
“Insurance fraud is not a victimless crime. Fraudsters, such as the members in this OCG, cause significant financial harm to the insurance industry which then leads to higher premiums for everyone who need insurance, whether it be for personal or commercial cover.”
Scott Clayton, Head of Claims Fraud at Zurich, said:
“This was a very complex case due to the scale of fraud and the level of detail to which these fraudsters organised their operation. It clearly demonstrates the depth and sophistication of fraud that insurers in the UK are faced with each day. As the battle against fraud continues, it is incredibly important that we evolve and use our agility to keep up with the ever-changing fraud landscape.
“It was the experience and vigilance of the Zurich’s fraud team which enabled IFED to take down this complex operation and bring these criminals to justice. These people not only break the law to make a living, but they also bring the cost of insurance up for honest individuals and business who want to protect what matters to them the most.”