Friends,
Last week, Florida Sen. Ashley Moody filed a bill to make staged accident rings a federal crime. The Staged Accident Fraud Prevention Act of 2026 (S. 5058) is a companion to the bill filed last year by Texas Rep. Brandon Gill and Georgia Rep. Mike Collins. Gill and Collins took their mission a step further last September, filing the Lawsuit Abuse Reduction Act of 2025. Congressman Gill stated:
“The Lawsuit Abuse Reduction Act reinstates reforms that protect honest Americans from being victimized twice—once by the lawsuit itself, and again by the crushing costs of defense. I believe it’s time to restore fairness, accountability, and integrity to our legal system…”
Across the nation, staged accidents are receiving more news attention. Recently, the decade-long investigation into Operation Sideswipe in New Orleans resulted in federal convictions against two attorneys and their law firms. In May, five suspects in Florida were arrested for allegedly orchestrating a staged accident — Florida recorded 1,000 of these accidents in 2024 alone. There are also reports from New York, California, and Arkansas. These are just from the past year.
Staged accidents were first codified as a U.S. fraud category in the 1990s, according to a 2005 FBI report stating the bureau had investigated 90 staged accident fraud cases since the mid-1990s. In Texas, there have been a few high-profile staged-accident rings or schemes in 2007, 2013, and 2015—this year, a woman from Houston pled guilty for her part in helping stage a crash as part of Operation Sideswipe. What began as a regional outcrop of incidents has become a national, increasingly institutionalized criminal industry that is costing every family more for insurance ($100 to $300 more in premiums) and raising prices at the grocery store.
Lawsuit abuse isn’t the only cause for rising prices. But lawsuit abuse can be stopped and has a proven record of lowering costs for consumers. This week, we continue to highlight the profit-driven motives driving lawsuit abuse, which threatens jobs and the opportunities provided by the Texas Miracle.
For the future of Texas,
Ryan Patrick
CEO | TLR
Will Staged Accidents Become a Federal Crime?
Currently, staged accident fraud is almost always investigated and enforced at the state level. The convictions in Operation Sideswipe, like most federal fraud investigations, were tied to existing federal statutes on mail fraud, wire fraud, obstruction of justice, and witness tampering by the lawyers and paid actors at the center of the staged accident ring in New Orleans.
In Texas, staged accident crimes could be enforced under a few different sections of the Texas Penal Code, namely tied to Insurance Fraud and Engaging in Organized Criminal Activity.
Florida, meanwhile, has an explicit statute criminalizing staged crashes.
New York passed its staged accident penalty in 2019 and Governor Kathy Hochul this year expanded the definition of “fraudulent insurance act” to include anyone associated with or supporting a staged accident. The expansion gives prosecutors greater authority to go after the entire system rather than just the individuals who carried out a staged accident.
Texas legislators can make a simple change to section 35.02 of our Penal Code by making all motor vehicle crash fraud and staged accidents a felony, regardless of the financial amount. This would apply to the participants, the funders, and enabling attorneys.
When this level of insurance fraud is perpetrated, the criminal penalties are only half of the remedy. Last week, a report highlighted the Operation Sideswipe scandal and drew a clear line showing the drivers who have nothing to do with the accident end up paying for insurance fraud schemes.
Medical Damages Fraud compounds problem of staged accidents
For months, TLR has pointed to Operation Sideswipe as evidence that billboard lawyers game the system to extract settlements through fraudulent lawsuits. The case shows how a staged accident is just step one in a longer fraud chain tied to targeted lawsuits — and consumers pay for all of it:
Paid “slammers” and “spotters” stage the accident and pose as witnesses
The lawyer refers the “victim” to a provider working on a Letter of Protection (LOP) — the provider gets paid from the settlement, but the plaintiff still legally owes the bill
The provider inflates bills (20-30x Medicare/Medicaid/workers’ comp rates) or pushes unnecessary procedures
The lawyer presents these inflated bills to the jury as legitimate — without disclosing the LOP or the lawyer-provider financial relationship
The lawyer then anchors the “pain and suffering” ask to the inflated medical total, inflating the whole verdict
The Insurance Information Institute’s June 2026 report found a national trend since 2014: accident claims are dropping while excessive lawsuits keep rising. Motor vehicle lawsuits alone added $42.8 billion in costs — all passed on to families and businesses through rising premiums.
Florida lawmakers acted to expose medical damages fraud and curb lawsuit abuse, and the payoff is billions in savings, rebates, and rate cuts for home and auto insurance. Texas, by contrast, failed to pass a solution in its 2025 session, and rates have stayed at or near record highs after years of double-digit increases.
A stable legal environment is what made Texas and Florida leaders in the Boom Belt in the first place. Florida keeps building on that, driving down costs for families and businesses. The open question is whether Texas will follow suit — or let billboard lawyers bust the Boom Belt.
Financial Ties: Texas courts don’t require transparency for Letters of Protection or TPLF
Last week, the leader of a statewide independent insurance association penned this Op-Ed highlighting Third-Party Litigation Funding (TPLF) and lawsuit speculation as “the next big money play.” Last month, North Carolina became the first state to issue a full ban on all TPLF activity, while about a dozen other states have focused on transparency and/or banning foreign litigation funding. This interactive map highlights which states have passed TPLF regulations or are currently working on the issue.
Here’s how it works:
TPLF agreements allow outside investors to bankroll lawsuits they don’t belong to.
If the case fails, plaintiffs and their attorneys typically do not need to repay what’s referred to as a “non-recourse” loan.
If successful, the investors take their cut of the settlement or verdict.
The problem? Without regulations, those who turn to funders have no protections against bad actors and Texas courts remain exposed to profit-driven litigation rather than victim-centered justice. From the article:
To make matters worse, these funding deals often don’t have to be disclosed in court, leaving judges in the dark about who has a financial stake, who may be influencing decisions, and whether conflicts of interest exist.
Now, add the problem of staged accident fraud, and you have a complete ecosystem that incentivizes profit over safety and justice. And Texans are the ones who end up paying the cost (more than $4,500 in hidden tort costs each year for Texas households). Other states have put up guardrails to protect civil courts. Texas must once again become a national leader in stopping lawsuit abuse—or risk being left behind by more vigilant states.
