Star Witness in Salem Fraud Trial Takes the Stand

In a Salem, MA court room yesterday, a Lawrence man sat in the witness stand as the prosecutions star witness for an insurance fraud scam, detailing his involvement in what prosecutors call “paper” accidents that never actually took place.

As the Eagle-Tribune reports, Leo Lopez spent three and a half hours in the Salem Superior Court testifying to his role and the role of many other people –family, friends, ex-coworkers, and even the godfather of one of his children– that he was allegedly in cahoots with when planning numerous fake accident scams.

Lopez took the stand against three co-defendants – Andover attorney James C. Hyde, who is a partner of the law firm of Berger & Hyde and faces two counts of insurance fraud, two counts of larceny, two counts of attempted larceny, two counts of conspiracy to commit auto insurance fraud and two counts of conspiracy to commit larceny;  Michael Kaplan, a North Andover chiropractic clinic operator who must answer a total of 13 similar counts;  and Omar Castillo,  a former van driver for the Kaplan Chiropractic Office who faces 4 counts.

Lopez also went on to explain why his former attorney was “completely against” him cooperating with prosecutors in this trial. He recalls his Lawrence attorney, Eric Taitano, telling him soon after his 2006 arrest in Georgia that “he didn’t want to represent a rat.”

That so-called rat had what prosecutors viewed as some pretty important information however. In a trial that is entering its 10th day, the jurors are finally getting to hear all about each of the three “paper accidents” that happened in late 2002 from someone who was involved first-hand in each one.

As Assistant State Attorney General William R. Freeman placed three large charts, one at a time, on an easel in front of the jury box, Lopez answered questions and explained his role in setting up the crashes on Oct. 1, 2002; Oct. 10, 2002; and Dec. 20, 2002. He described the mechanics of setting up each accident, including the recruitment of passengers and drivers, the trips to the chiropractic clinics for treatment of non-existent injuries, the trips to the lawyers and the filing of numerous paperwork.

Lopez has said that he was hired by Kaplan as a driver and a chiropractor’s assistant. He also stated that the North Andover clinic was responsible for giving him a place to hone the skills of scamming with staged and “paper” accidents to cheat insurance companies. He noted that he was able to perfect this craft over a two-year period, from late 2000 through the fall 2002.

Lopez told prosecutor Freeman he had no idea how many phony crashes he set up, but estimated it “more than 20.”

Most of the crashes Lopez claimed to have set up were so-called “paper accidents,” because it was all written down, and nobody ever actually got into the car. The only time someone did was when an unnamed driver would take the car out and damage it to make it look like it was in a crash. The only evidence was operator reports, which Lopez said he helped fill out.

“I was telling Michael Kaplan that people were scared (to get involved in ‘live’ accidents),” Lopez recalled of a conservation he had with the chiropractor in mid-2001 which led to his doing “paper accidents. He (Kaplan) told me people didn’t have to be there,” he said.

People very close to Lopez ended up getting involved in the “live” accidents however. Lopez’s long-time girlfriend, Elsa Moure, and their 6-year-old son took part in a so-called “live” accident on January 16, 2002.  When asked why the crash had to be “real,” Lopez said “that’s the way he wanted to do it.” Why would he involve his six year old son in a staged accident?   He did it “for the money” as Lopez puts it.  What a hero. 

So why have “live” accidents?  Apparently to get live ambulances to respond to the scene, which increases the claim value and move them closer to the $2,000 threshold that is needed in personal injury cases.

And not everyone was happy about Lopez testifying, notably lawyers for two of the defendants. 

Frequently throughout his testimony, defense attorney David Meier, who represents Hyde, and Salem attorney John Morris, who is Castillo’s court-appointed attorney, objected to Lopez’s tendency to give more than a “yes” or “no” answer. They also complained about the prosecutor leading the witness and about Lopez reading from police reports.

So far, Lopez has testified against:

• North Andover chiropractic clinic operator Michael Kaplan. Lopez stated that he would usually tell Kaplan the details of fake crashes the day before they were scheduled to happen. He also noted that Kaplan paid him $100 in cash for bringing in his mom for the treatment of a work injury. Once he started setting up crashes however, Lopez stated that Kaplan started paying him $200 per referral.
• Andover attorney, James C. Hyde. Lopez testified that Hyde paid him either $200 or $250 by check for each client he referred. After Leo smashed up his own car in a “crash” to get money for it, he reported an injury and got a $200 check from Hyde for referring himself. Lopez noted that Hyde told him there would be more money for more referrals.
• Omar Castillo, the former van driver for Kaplan Chiropractic. Lopez said Castillo approached him, much like the other workers at Kaplan’s, about setting up the Dec. 20, 2002 crash. Lopez claimed to work with Castillo to set up the crash and said they split the referral money he received.
• Troy Wheelwright, who is the operator of Haverhill Family Chiropractic. Lopez said he picked up $350 per patient referral from Wheelwright, who was indicted back in 2008 along with Lopez. That fraud indictment was dismissed, but Wheelwright was later re-indicted on similar charges. A trial date for that case is still pending.
• Socrates De La Cruz, who was Lopez’s childhood friend that paid referrals for clients involved in bogus crashes. The lawyer was also indicted three years ago, but that indictment was dismissed as well.
• Donald R. Frazier. Not only is he the godfather to one of Lopez’s children, but Lopez said that he needed some money and wanted to get involved in the October 10, 2002 crash as a driver of one of the vehicles. The car was owned by his girlfriend, who later became his wife, Kelly Birchall. She was also listed as one of the drivers in the October 1, 2002 crash and is on the prosecution’s witness list.

Lopez was scheduled to resume his spot on the witness stand today, in what will probably be a full-day session. Cross-examination of the prosecution’s star witness is expected to begin tomorrow.

Please note that these are still mere allegations and all parties are presumed innocent unless proven guilty in a court of law.