Public Adjusters Versus the Bloods

A recent article in the Insurance Journal, Gang Members Charged With Violent Takeover of New York Fire Mitigation Industry, caught my attention. In the nerdy insurance claims and restoration business, the following is way out of the norm:

FBI, Homeland Security and New York police officials have charged nine defendants including gang members with a violent racketeering and extortion conspiracy in attempting to take over an entire industry designed to help victims after a fire.

The defendants, who officials said include members of the violent Bloods street gang, took control of First Response Cleaning Corp., a Brooklyn-based emergency mitigation services (EMS) company that provides clean-up services to properties damaged by fire. Officials allege that the defendants used First Response as a vehicle to extort other participants in the fire mitigation industry and used violence to assert control over the industry and the filing of false insurance claims.

With certainly no pun intended, the press release from the United States Attorney’s Office had more information:

’We are smoking out corruption and violence in the fire mitigation industry with today’s charges. As alleged, the defendants used threats and violence to take over a company and then an industry. Thanks to our law enforcement partners’ work, today’s arrests bring an end to the defendants’ violent scheme….’

‘We allege gang members deployed mob-like tactics, using extortion and violence in their attempts to take over an entire industry designed to help victims after a fire. They employed violence to force other companies and vendors to do their bidding. Thanks to the incredible work by the FBI and our law enforcement partners, this crew can no longer threaten to kill people’s families, retaliate against potential witnesses, and profit off of someone else’s loss….’

‘Members of the Bloods allegedly infiltrated the First Response Cleaning Corporation and utilized violence to command dominance and compliance over their competitors within the insurance industry. This criminal organization took advantage of people in time of personal and professional turmoil to enrich themselves at others expense. HSI will continue to work alongside our partners to disrupt and dismantle complex criminal organizations who seek to exploit legitimate businesses to further their violent agendas.’

The indictment stated the following:

[T]he Bloods street gang, worked together to take control of First Response. JATIEK SMITH was the leader of the crew. After taking control of First Response, SMITH and the others then used force and threats of force against other EMS companies and public adjusters to exert control over the entire fire mitigation industry. Defendant OCTAVIO PERALTA was a public adjuster who participated in the enterprise’s efforts to defraud and who helped the conspirators solidify their control over the industry. The enterprise’s threats included threats to kill or shoot their victims and members of the victims’ families. With the backing of these threats of force, they imposed a system of rules upon other EMS companies and on public adjusters, including a strict rotation system in which the defendants dictated which companies got which losses. The enterprise also extorted money from EMS companies and public adjusters and required these other companies to pay if they wanted to continue to work without being attacked. On multiple occasions, the enterprise used force against other EMS companies and public adjusters to ensure that they submitted to the rules, including physically assaulting victims. They sometimes created video recordings of this violence and distributed the recordings within the industry to threaten other victims. The enterprise also helped submit false insurance claims for damaged properties and threatened violence or retaliation against potential witnesses who were believed to be cooperating with the federal investigation into the enterprise’s crimes.

This is bizarre and in the “truth is stranger than fiction” category of what may happen in the property insurance claims business.

We will monitor this case and keep you updated on any developments as we find them. As a reminder, everybody is entitled to a presumption of innocence until proven guilty. Allegations are just that, allegations until proven.

Thought For The Day

Even gang members imagine a future that doesn’t include gangs.
—Greg Boyle