Fraud prosecutors in N.J. lose tool against defendants

Loss of pre-trial detention hampers cooperation by fraudsters

Prisons and jails across the U.S. are overcrowded, costly and at a breaking point in many states. Jurisdictions are working to ease the pressure in a variety of ways. California, for example, has released more than 30,000 inmates early in the last five years. Other states use alternative sentencing.

New Jersey is taking a different approach. It has done away with pre-trial detention except for the most-violent crimes or people who are flight risks.

Fraud prosecutors in the Garden State say the new law makes their jobs tougher. A runner employed by a staged-crash ring who gets caught no longer has to worry about making bail. The threat of pre-trial detention often spurs a runner to cooperate with law enforcement and help nail the gang’s masterminds. But no longer.

Now, runners are processed and given a summons, kind of like getting a traffic ticket.

The concern here is that the lack of pre-trial detention throws up one more roadblock for many local prosecutors who already are overworked and hesitant to take complex, time-consuming fraud cases.

There are no easy answers. It’s unlikely lawmakers will make an exception to the law for non-violent, white-collar crimes.

Deterring fraud rings is difficult, though achievable. The anti-fraud advertising campaign by the Office of Insurance Fraud Prosecutor and state AG is excellent, though it’s oriented towards everyday consumers, not organized criminals. Perhaps outreach to lower-level gang members about the dangers of committing fraud might help deter.

The best approach might be for insurers to focus even more on taking the profit out of insurance crime. Greater use of technology will detect scams earlier before claims money goes out the door. More civil suits with treble damages against crooked medical providers and other ringleaders will hurt them where it counts.

Fraud fighters around the U.S. will have to rely less on arrests and prosecutions. They still can curb insurance fraud by improvising and relying more on their creative expertise.

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