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State Investigators Mount Morning Raid to Snare Auto Insurance Cheats

January 6, 1992

NEWARK, N.J. (AP) _ New Jersey investigators swooped down on parking lots and streets in Pennsylvania and New York to find scofflaws who live in those states but register their cars here to get cheaper insurance.

The sweep early Sunday morning identified nearly 3,000 cars suspected of being registered illegally in New Jersey, officials said.

Their owners will be cited if voter registration lists and tax data show they do not live in New Jersey, said Louis Parisi, director of the state’s Division of Insurance Fraud Prevention.

Out-of-staters who submit claims on fraudulently registered cars are suspected of driving up premiums for New Jersey drivers by $500 million a year, Parisi said Sunday. Authorities believe more than 30,000 cars are registered illegally in the state.

Gov. Jim Florio signed a law Thursday that allows the state to charge rate evaders immediately with a civil offense. Penalties start at $5,000 for a first offense and range up to $15,000.

Previously, bogus registrations were considered criminal offenses and were difficult to prosecute because violators could not be caught unless they filed insurance claims, Parisi said.

Although New Jersey has some of the nation’s highest auto insurance rates, drivers in New York City and the Philadelphia area pay even more to insure their cars than New Jersey drivers do, Parisi said.

Many of the cars suspected of being illegally registered are luxury or sports cars, and owners can save as much as $7,000 by pretending they live in New Jersey, Parisi said.

Twenty-nine investigators roamed the streets of New York City, Philadelphia and several Pennsylvania towns across the Delaware River from Trenton.

They found 1,840 cars of suspected rate evaders in Pennsylvania and 1,097 in New York. Many cars bearing New Jersey license plates were parked in lots set aside for residents, Parisi said.

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