Insurance fraud continues to be a significant problem in the Garden State — and one that's costing you, experts say.

“Insurance fraud costs each New Jersey family $1,300 every year. We are all paying a steep price for insurance fraud,” said Marshall McKnight, a spokesman for the New Jersey Department of Banking and Insurance.

Seven years ago, the Bureau of Fraud Deterrence was created within the State Department of Banking and Insurance was created. Since that time, “the bureau has levied more than $18.3 million in fines, surcharges and restitution against insurance fraudsters," McKnight said.

McKnight said n New Jersey people routinely commit a wide variety of insurance-related crimes.

“They range from application fraud to medical health insurance fraud and every other type of insurance fraud you might imagine," he said.

He said the Department of Banking and Insurance is taking a somewhat new approach in concentrating on cracking down on “larger, widespread fraud cases, personal injury mills and the like. We’ve created a major fraud unit within the Bureau.”

McKnight said an example of this is a case that came to light at the beginning of this year, when the New Jersey Department of Banking and Insurance and Allstate New Jersey Insurance Company filed suit against a Colts Neck man, Anhuar Bandy, for allegedly masterminding what was described as a sophisticated, widespread personal injury mill.

The mill allegedly involved 78 defendants, including some who recruited people in car crashes, referring them to accidents lawyers and doctors, in violation of the New Jersey Insurance Fraud Prevention Act.

The suit, which is still ongoing, alleges Bandy and his brother Karim Bandy owned or controlled chiropractic clinics in seven New Jersey Counties.

The Bandy brothers pleaded guilty in 2015 to second-degree insurance fraud, after being charged with racketeering, conspiracy, health care claims fraud and theft.

McKnight said while the Bureau works on civil cases, the Bureau of Insurance Fraud prosecutor, within the State Attorney General’s Office, handles the criminal side of insurance fraud investigations.

He stressed some people may think small-scale insurance fraud is no big deal, but that’s not the case.

“It hurts everybody, it drives an upward pressure on insurance rates for everyone," he said.

He said if New Jersey residents think they’re aware of insurance fraud being committed “they should contact the Department. They can call us at 1-800-446-7467.”

You can contact reporter David Matthau at

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