Claims filed with insurance companies would state that an SUV or automobile had backed into a motorcycle. The same damaged motorcycle was used to stage all of the accidents in six North Carolina counties, including Wake and Durham.
"The insurance company would then settle that claim for a few hundred, up to $2,000, and that process was repeated throughout the state," said Halifax County Sheriff's Lt. Jay Burch.
Thirteen people from Halifax County have been arrested. The alleged ringleader is Joe Louis Jefferson, also known as Andrew Stansbury.
Police rounded up the men and a number of vehicles, including cars, trucks, and 4-wheel ATV's The registration numbers on the vehicles had been altered and some engines had been modified for racing.
The second alleged big player arrested in the scam is Michael Stansbury. Police said he was also running a chop shop near Littleton, stealing cars from two states and cutting them up for parts.
The insurance fraud went undetected for months, because the claims were small and unnoticed in the system.
"In the past, we more or less thought of them as claims against houses and claims involving thousands of dollars," said Burch. "They proved in this particular case (to net) $56,000 over several scams."
The three insurance companies who were allegedly scammed -- Nationwide, Geico and GMAC -- want their money back. The 13 individuals are facing possible prison terms and remain behind bars.