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Insurance Industry and FBI Racial Profiling

by Julie Marquez |
October 31, 2000
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San Antonio, TX - The League of United Latin American Citizens, the oldest Latino civil rights group in the U.S., has issued a call for a congressional investigation of the FBI's partnership with the National Insurance Crime Bureau (NICB), a private investigative group staffed by former law enforcement officers and funded by the insurance industry.

LULAC officials say - based on a yearlong investigation - that the FBI, working in conjunction with NICB, has engaged in a pattern of racial profiling designed to target minority-owned businesses and professionals of color.

Based on the findings, LULAC adopted a resolution at its national convention, held this summer in Washington, D.C. The resolution, in part, states the following: "LULAC denounces and condemns the practice of the FBI of engaging in racial profiling and the FBI's practice of targeting of small minority-owned businesses and the targeting of minorities and other professionals of color and hereby officially calls for a congressional investigation."

The LULAC resolution has been ratified by the group's executive board, and will be distributed to LULAC councils across the country as part of the civil rights group's national action platform.

LULAC's investigation centered on an operation called Sudden Impact, a nationwide insurance-fraud sting conducted jointly by the FBI and the Palos Hills, Illinois-based NICB.

Following is a summary of the key findings of LULAC's investigation.

  • The national FBI/NICB operation called Sudden Impact involved joint interrogation of suspects, joint search-warrant raids and joint access to medical records as well as a mega insurance industry computer database - raising serious questions about the right of privacy in this country.
  • Freedom of Information Act documents obtained by LULAC 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. The Freedom of Information Act documents also show that the FBI entered into a contract with NICB that outlines their joint investigative responsibilities.
  • Press information from NICB indicates that the nonprofit NICB has an active lobbying arm in Congress, employs former FBI agents (including the former deputy director of the FBI) in high-level positions, and now has in place something called "Forewarn" - which is used to predict when and where crime, specifically insurance fraud, will occur. In addition, FBI officials have served on the NICB's board.
  • A lawyer's office in San Antonio, Texas, was raided as part of an FBI/NICB operation, yet Freedom of Information Act documents indicate that FBI headquarters has no record of that lawyer ever being of "investigatory interest to the FBI." In addition, the lawyer, who has never been charged with a crime, claims that the search warrant for the raid was issued improperly, potentially as part of a "rogue operation." The attorney's wife was a leading environmentalist in the community who, at the time of the raid, was spearheading efforts to place restrictions on developers. The lawyer's law practice was destroyed due the publicity generated by the raid. Media coverage of the raid was prompted by a press release sent out by the FBI to local television stations and newspapers.
  • An Iranian family say they have been framed as part of an FBI/NICB joint operation and can produce a five-foot high stack of documents to back up their claims. Among the charges the family makes is that documents in their case were altered, evidence withheld and witnesses intimidated.
  • An African American lawyer in Houston claims his computer was loaded with racist slurs and threats as part of an FBI /NICB investigation. Charges against that lawyer were ultimately dropped.
  • Another African American attorney (the husband of a former outspoken African American Texas state legislator) claims he has been wrongly convicted as part of an NICB investigation. Among the claims the attorney makes in his appeal is that hearsay evidence was used against him and that a witness who could have helped prove his innocence was not allowed to testify in court.
  • An FBI informant claims, in a recorded conversation, that the FBI was targeting Iranians in San Antonio as part of Operation Sudden Impact.
  • Joint operations between the FBI and NICB are ongoing through code names such as Sure Buck, Twisted Metal and Sudden Stop. In fact, as recently as June 23 of this year, a major NICB insurance-fraud bust was announced in Miami, FL. According to the press report, 49 of the 51 people arrested had Latino surnames.

FBI and NICB officials have dismissed LULAC's charges as baseless. And, NICB officials have gone as far as to threaten to impugn the credibility of LULAC officials if they continue to pursue the issue.

However, at least one elected official has not been scared off by NICB's attack-dog politics and is taking LULAC's findings seriously. U.S. Rep. Charles A. Gonzalez, D-Texas recently sent a letter to Louis Freeh, director of the FBI, calling on him to reveal the nature of the relationship between the NICB and the FBI.

The letter reads in part: "I understand that the FBI and the National Insurance Crime Bureau are currently operating a joint national investigation of medical insurance claim abuse. Civil rights activists in my district have contacted me with concerns about this investigation, and have expressed to me their belief that this investigation is unfairly targeting minority groups and may involve racial profiling." LULAC officials also are currently working with members of Congress to introduce legislation designed to stop these kinds of activities by the FBI and the insurance industry, in order to protect the public in general and people of color in particular.

Julie Marquez is chairwoman of LULAC Texas' Legislative Affairs Committee and of the Criminal and Social Justice Committee.

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