Abdel and Smith - Ledger - Smith Fined and Probation

Published in the Star-Ledger, Saturday, May 26, 2007

Officer loses his badge for role in insurance bilk

BY RICK HEPP
Star-Ledger Staff

A Roselle Borough police officer was ordered yesterday to serve a year on probation and permanently relinquish his badge for filing a false report in a large-scale automobile insurance fraud scheme run out of a Union County auto body shop.

Officer John A. Smith, who earned $81,908 a year after spending 14 years as a Roselle patrolman, also must pay $5,000 in civil penalties for his role in a eight-member ring that bilked insurance companies by filing claims on staged or fictitious car accidents.

State prosecutors said the scam netted $94,200 between March 2001 and March 2003, but the companies claim the true loss is in the millions of dollars.

Smith, who pleaded guilty to official misconduct two months ago, admitted he filed a false accident report in 2002 for Marco Rebelo, the ring's admitted leader, state prosecutors said. Rebelo, who owns Creative Auto Body in Roselle, later used the police report to file a false claim with Clarendon National Insurance Company, which paid out $12,500.

Smith, 38, of Columbus, was also ordered by Superior Court Judge James Heimlich to spend 60 days in the Union County Jail's Sheriff Labor Assistance Program and complete 300 hours of community service.

The case was brought by the state Office of Insurance Fraud Prosecutor, which secured grand jury indictments last December against Smith and Plainfield Police Detective Samad Abdel on charges of conspiracy, official misconduct, theft by deception and attempted theft by deception.

Abdel, who lives in Roselle, was sentenced to a year of probation in May after admitting he submitted two false police reports as a favor to Smith. Had Smith and Abdel gone to trial, they could have faced charges up to 10 years in prison if convicted.

Rebelo, meanwhile, was sentenced on June 1 to four years in state prison.

The case stems from an investigation initiated by State Farm Insurance, which notified the Office of Insurance Fraud Prosecutor. The company also filed a civil lawsuit in 2004 that paints the ring as a vast conspiracy that included 38 members who were strategically located in police departments, insurance agencies and auto body shops, making it "virtually undetectable."

State Farm claims it alone has paid out $1.3 million for more than 140 bogus claims by members of the ring dating back to at least 1999, the lawsuit notes. At least four other companies have also been targeted by the ring for millions of dollars. The state said it only needed to charge the ring with a portion of those crimes to make the charges stick.

Rick Hepp may be reached at rhepp@starledger.com or (609) 989-0398.

Link to online story.

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