Representative Laura Gillen, a Democrat from Long Island, has introduced legislation that would establish federal penalties for individuals who stage car accidents to commit insurance fraud. The proposed "Stop Auto Fraud Act of 2026" aims to make "crash for cash" schemes a federal offense, punishable by up to 10 years in prison.
The bill, co-sponsored by Reps. Troy Nehls (R-Texas), Josh Gottheimer (D-NJ), and Vince Fong (R-Calif.), also includes enhanced sentences for staged accidents that result in injury or death, potentially leading to up to 20 years in prison or life imprisonment in fatal cases.
"This is a tough-on-crime, lower-cost bill that is responding to the surge we’ve seen in these crash for cash schemes that are being perpetrated by hucksters and fraudsters across our country, including on Long Island, that are driving up our auto insurance rates and putting drivers’ lives at risk," Gillen stated. She believes the bipartisan measure will receive broad support to enhance road safety and reduce costs for drivers.
According to data cited by Gillen's office, insurance fraud and staged accidents contribute over $300 annually to auto insurance premiums for New York drivers, who already face average premiums of $3,492 per year, significantly higher than the national average. The legislation also proposes directing fines collected from convicted offenders into the federal Highway Trust Fund.
Gillen highlighted that these schemes not only involve vehicle damage but also fraudulent claims for injuries and treatments, sometimes leading to unnecessary surgeries to inflate damages. The bill seeks to crack down on all aspects of such fraudulent claims.
Recent cases underscore the growing problem. In late 2025, Jaime Huiracocha, 53, and Victor Murillo, 34, pleaded guilty to insurance fraud after orchestrating three staged accidents in August and October 2024, which generated over $80,000 in insurance payouts. They were sentenced to one and two years in prison, respectively. IMAGE2
Nicholas Díaz-Baquero, an Uber driver from Garden City, shared his experience of being involved in a suspected staged crash that resulted in a back injury. "It’s frustrating and heartbreaking that honest drivers can be put in this position just trying to make a living," he said.
The National Insurance Crime Bureau (NICB) reports a significant increase in staged accidents, noting a 35% rise between 2024 and 2025, and a 52% increase over the first half of the current decade. According to NICB data, Washington D.C. has the highest rate of confirmed staged crashes, followed by California and New York.
Kyle McCollum, vice president of government affairs at the NICB, stated that the proposed legislation would provide federal prosecutors with a clearer tool to combat this type of fraud, which has historically been prosecuted under statutes like wire fraud. "So this actually clarifies and makes abundantly clear that staging a motor vehicle accident itself is a federal crime," McCollum said.