Cruel Insurance Scam Charged

Police say the ringleaders of an insurance fraud ring recruited homeless people to pose as accident victims and then broke their arms or legs with a crude ax handle.

Homeless advocate Dennis O'Keefe told CBS News Correspondent Randall Pinkston the scheme is "the lowest of the low."

Detectives announcing charges Friday against three of the alleged ringleaders and three drivers who reportedly took part in the scheme said the ring took in hundreds of thousands of dollars in insurance settlements.

The homeless "victims," who were often recruited from shelters, received "anything from nothing to $1,500" on settlements that ranged from $10,000 to $100,000 apiece, said Detective Ken Bigg.

Investigators said they had documented six cases since November but believe it had been going on much longer.

Bigg said members of the ring would go to homeless shelters to find people desperate enough to pose as auto accident victims.

"On the appointed day they would take them to a garage and put their arm on a stone block," he said. "And they would smash the arm."

Bigg said the implement used to break the bones was usually a heavy homemade ax handle.

"It's just an unbelievable situation. I can't imagine people preying on homeless people who are fragile," O'Keefe told Correspondent Pinkston.

Detectives said the ax handle was usually wielded by Michael Garner, 39, who was charged Friday with fraud and aggravated battery.

Fraud charges were also lodged against alleged ringleaders Kendrick Moore, 53, and Marlon Cole, 32, also of Chicago, and against three alleged drivers in the staged accidents

Bigg said that in an attempt to ward off suspicion from insurance companies, the crew would alternate between breaking arms and legs.

After the bones were broken, he said, crew members would take the injured person to the staged accident scene and call 911. He said they would later pose as relatives of the injured and tell the insurance companies that they were desperate for money and willing to settle in a hurry.

Bigg said police only learned of the scam when authorities at various homeless shelters began reporting unusual numbers of residents showing up with broken arms or legs.

Pinkston points out that this "repulsive" treatment of the homeless isn't unheard of. A year ago, CBS News broke the story of misguided movie makers in Las Vegas who hired the homeless for a "sick genre of reality video" called "bumfights." The producers were convicted.