Hispanic civil-rights group claims insurance `crime bureau' targets minorities

The National Insurance Crime Bureau (NICB) is an official sounding name for a fraud-busting detective agency funded by the insurance industry.

In fact, NICB investigators refer to themselves as "special agents," the same title used by criminal investigators with federal agencies like the FBI and the Bureau of Immigration and Customs Enforcement (formerly the investigative arm of U.S. Customs).

The NICB even has agreements in place -- called Memoranda of Understanding, or MOUs -- with law enforcement agencies, such as the FBI, that allow the private insurer-backed group to conduct joint criminal investigations with these tax-funded agencies. NICB special agents also use sophisticated computer-based investigative tactics that involve accessing and sharing data with government agencies.

Under the auspices of treaties negotiated between the United States and foreign countries, the NICB also conducts investigations overseas -- including in Central and South American countries. These treaties also facilitate the sharing of computer and other data between U.S.-based investigative agencies and the foreign countries.

So you've never heard of the NICB?

If that’s the case, one of the oldest Hispanic civil rights groups in the nation, the League of United Latin American Citizens, or LULAC, wants to shed some light on the group for you. For starters, the Chicago-area based NICB operates as a nonprofit, boasts a staff of more than 300 (a good share of them former law enforcement officials), and recorded 2003 revenues in excess of $30 million -- funds raised primarily from dues paid by the 1,000 or so insurance companies NICB counts as its members.

Earlier this month, LULAC held a press conference in the border town of El Paso, Texas, to bring its concerns about the operations of the NICB into sharper focus for the public. A press release issued by LULAC spells out some of those concerns:

"LULAC has received several complaints from persons who wish to remain anonymous for fear of retaliation. They claim that NICB, with the assistance of law enforcement, has targeted minority-owned businesses and individuals for investigation and prosecution. They have also complained that NICB's relationship with law enforcement authorities in El Paso has resulted in an abuse of that law-enforcement power. The retaliation they fear is an arrest, even though not supported by evidence."

Among the specific charges raised by LULAC, according to its press release, are that the "FBI office in El Paso … has allowed NICB employees to participate in law enforcement activities"; "an NICB employee was allowed to interview suspects in the Police Department, in cases where NICB had brought the complaints to the police department"; and "NICB employees have also been given access to confidential law enforcement information that is not available to the public."

Of particular concern to LULAC, though, is NICB's alleged practice of racial profiling. Figures compiled by LULAC for the El Paso area alone show that over the past three years, some 20 cases of alleged insurance fraud were brought to the El Paso Police Department by the NICB. Of that number, LULAC claims, 18 involved minorities — most of them Hispanic or African American.

"The pattern of racial targeting reflected in the numbers is very disturbing. What makes it more disturbing is that over half of the cases were declined by the District Attorney's office for lack of evidence of crime," LULAC's press release states. "These individuals were not ultimately prosecuted, but they endured the trauma of arrest, because an NICB employee convinced the police department that a crime had been committed."

And LULAC is not alone in raising a red flag over the tactics of the NICB. Miguel Torres, a spokesman for the El Paso chapter of the Mexican American Bar Association, also was present at the LULAC press conference.

“Some of the methods of the NICB do not leave a good taste in our mouths,” Torres says. “Above all else, the biggest concern is the racial-profiling. … Our whole board will be taking a hard look at this issue.”

Sudden Impact

This is not the first time charges of racial profiling have been leveled against the NICB. An earlier journalistic investigation into an operation called Sudden Impact -- which was conducted jointly by the FBI and the NICB -- uncovered similar disturbing trends.

Sudden Impact was a nationwide fraud sting conducted in the 1990s that targeted physicians, lawyers and business owners allegedly involved in staging automobile accidents to collect on insurance policies. The investigation into Sudden Impact involved obtaining documents from the FBI through a Freedom of Information Act (FOIA) request.

The key findings of the investigation:

• Among the documents included in the FOIA response was a proposed contract, called an MOU, that outlines the relationship between the FBI and the NICB.

"The purpose of this MOU is to outline the responsibilities of the FBI and NICB. In addition, this MOU will formalize the relationship between the two organizations with regard to policy, planning, public relations, and the media in order to clarify the role of each organization," the MOU states.

• As part of Sudden Impact, FBI and NICB agents as a team interrogated suspects, conducted search-warrant raids and had access to medical records as well as a mega insurance-industry computer database.

• A series of national and regional meetings were held around the country between November 1993 and April 1995 to plan the Operation Sudden Impact "takedown day," according to FOIA documents. The meetings occurred in cities like Denver, Tampa and Las Vegas, and involved the participation of FBI agents from local field offices and NICB agents, as well as assistant U.S. attorneys from around the country.

• Takedown day, May 24, 1995, was designed as a media event that involved FBI headquarters issuing a boiler-plate press release announcing that arrests and indictments were going to be made across the county. FBI field offices were encouraged to customize the press release with input from the NICB.

• FOIA documents and newspaper archive research point to a pattern of racial profiling being employed in Operation Sudden Impact, with minorities being targeted at a rate of nearly 8 to 1 compared to Anglos.

• Press information from the NICB indicates that the nonprofit group has an active lobbying arm in Congress, employs former FBI agents in high-level positions, and now has in place technology called “Forewarn”  — which is used to predict when and where crime, specifically insurance fraud, will occur.

The tight relationship between the FBI and NICB does not seem to have abated in the wake of Operation Sudden Impact. According to NICB's 2003 annual report, Michael Kirkpatrick, an assistant director with the FBI, serves on the NICB's board of advisors. In addition, the president and chief executive officer of NICB, Robert Bryant, is a former deputy director of the FBI. As deputy director, Bryant held the second-highest ranking position in the bureau and managed the day-to-day operations of the FBI.

NICB’s chief operating officer, Eugene Glenn, also is a former FBI employee whose 26-year career with the bureau included serving as special agent in charge of the Salt Lake City Division. While with the FBI, Glenn participated in Operation Sudden Impact, according to FOIA documents,

Teri Vlasak, spokeswoman for NICB, declined to comment on the charges being made by LULAC, because she had not "heard anything about this."

However, in the past, both FBI and NICB officials have claimed the allegations of racial profiling are baseless. NICB officials also stress that the group adheres to the law in pursuing its priority mission, which is to combat insurance fraud.  

NICB representatives point out that fraud costs its member insurers billions of dollars annually -- costs which ultimately hit consumers in the form of higher insurance premiums.

Global mission

In addition to its battle against insurance fraud in the United States, NICB also appears to be taking its fight to the worldwide stage as well, according to a group called the North America Export Committee (NAEC). According to NAEC’s Web site, the committee is composed of a coalition of multi-national players organized to "combat the exportation of stolen vehicles.”

Among those represented on NAEC's executive board are the following: the Insurance Bureau of Canada; the U.S. Bureau of Customs and Border Protection; the Canadian Intelligence Service; the Miami-Dade Police Department; and, of course, NICB.

Athough NAEC's primary charge is to lead the effort to prevent stolen vehicles from being exported from North America, according to its Web site, the group appears to have experienced some mission creep. Recently, NAEC's membership has expanded to include representatives from Mexico. Future plans, according to NAEC's 2003 chairman, Greg Terp, include "further strengthening of international efforts and communication beyond North America to include Central, South America and Europe."

"A recognized nexus between terrorism and organized crime ... including auto theft, has raised the need for efforts to identify those involved in the exportation of stolen vehicles throughout the world," Terp states in a message on NAEC's Web site. "... The NAEC has already contributed to enhancing homeland security and interdicting the flow of stolen vehicles. The electronic reporting system (for exported vehicles) has helped create a data base that can be utilized for homeland defense investigations."

And who does past NAEC Chairman Glenn Wheeler identify as being a driving force behind NAEC's efforts?

It’s the NICB.

"This is not just a problem in El Paso," LULAC points out in its press release concerning the NICB’s activities in that border city.  "... LULAC has seen the potential for civil rights abuse realized in El Paso, and will investigate in other communities.

"LULAC is extremely concerned about the insurance companies that participate with NICB in its investigations," the press release continues. "NICB is funded by insurance companies, and is a tool of those companies. Therefore, the insurance companies that condone the actions of NICB should be held accountable for the actions of NICB."

LULAC plans to file formal complaints with local, state and federal law-enforcement authorities concerning the NICB’s activities in El Paso.  

“LULAC is also considering bringing a class action civil-rights lawsuit seeking damages for those people who have suffered the abuse of the NICB while acting under the color of law wrongfully delegated to them,” the civil-rights group states in its press release.

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