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SIU Spotlight

The "Inherent Risk" of Staged Collisions and the Limits of Sentencing Stipulations

May 15, 2026

by Ariel C. Brownstein

In a significant win for law enforcement and the insurance industry, the Tenth Circuit recently affirmed a 48-month sentence for a defendant who orchestrated a sophisticated, multi-year insurance fraud scheme involving staged car wrecks. The court’s ruling in United States v. Brown, No. 25-7026 (Dec. 30, 2025) underscores a powerful legal precedent: the act of staging an automobile collision is inherently dangerous and justifies strong sentencing enhancements, regardless of whether a particular crash resulted in actual injury.

A. Background

Defendant Sebron Dejuan Brown operated a four-year conspiracy involving odometer tampering and staged accidents. The scheme was twofold:

  • Vehicle Value Inflation: Brown replaced or "rolled back" odometers in high-mileage vehicles to artificially inflate their market value.
  • Orchestrated Crashes: He and his co-conspirators then deliberately crashed these vehicles—sometimes involving unsuspecting third parties—to submit fraudulent insurance claims for vehicle repairs and bodily injuries.

While the parties initially stipulated to a lower loss amount and offense level, the district court rejected the stipulated guidelines. Instead, the court applied a two-level sentencing enhancement for an offense involving the "conscious or reckless risk of death or serious bodily injury" and imposed an 11-month upward variance, resulting in a four-year prison term.

B. The Tenth Circuit’s "Inherent Risk" Ruling

On appeal, Brown argued that the "serious bodily injury" enhancement (U.S.S.G. § 2B1.1(b)(16)(A)) was misapplied because there was no evidence that anyone was actually at risk of grave harm during his "controlled" low-speed collisions.

The Tenth Circuit rejected this "semantic and evidentiary over-demand.” The panel held that because cars are "big pieces of machinery traveling at speed," the risk of serious injury is intrinsic in any deliberately caused accident. The court clarified that sentencing judges do not need to quantify the specific degree of risk for each individual collision; the criminal method itself—staging wrecks—is enough to trigger the enhancement.

Takeaways

1. The Power of "Inherent Risk" in Litigation

The most important takeaway for carriers is the judicial recognition that staged accidents are inherently dangerous. Carriers can leverage this "inherent risk" logic in civil litigation—especially in RICO or fraud counterclaims—to emphasize the egregious nature of the claimant’s conduct. By framing staged accidents as acts of reckless endangerment rather than mere paperwork fraud, carriers can more effectively push for punitive measures and deter future schemes.

2. Beware of Sentencing Stipulations

Brown highlights that courts are not bound by the stipulations between prosecutors and defendants regarding loss amounts or offense levels. Carriers, often acting as victims in these cases, should ensure their "actual loss" statements are strongly documented. Even if the parties agree to a lower loss figure for a plea deal, the carrier’s impact statement can lead the court to apply enhancements or adjustments that better reflect the true scope of the harm.

3. Identifying the "Sophisticated Means" Red Flags

Although Brown’s scheme was simple in its execution (crashing cars), the court noted the "repetitive and consistent nature" of the fraud for over four years as a reason for the upward variance. Carriers should look for these patterns early in the Special Investigations Unit (SIU) process:

  • Commonalities in Vehicle Acquisition: Vehicles with high mileage that have recently "lost" significant mileage on their odometers.
  • Recruitment Patterns: Schemes involving five or more participants often share common medical providers or legal representatives.
  • Frequency Limits: Tracking how often the same individual appears as a passenger or "witness" across different claims.

4. Proactive Defense Strategies: Beyond Affirmative Defenses

Carriers should move beyond simple denials of claims. As seen in Brown, the criminal justice system is increasingly willing to treat these cases as serious threats to public safety. In civil court, carriers should consider:

  • Declaratory Judgment Actions: Seeking an early court ruling that no coverage exists due to the fraudulent nature of the incident.
  • Aggressive Counterclaims: Filing counterclaims for fraud or RICO violations rather than just asserting fraud as an affirmative defense. This shifts the burden and signals that the carrier will not settle "low-value" nuisance claims.

Accordingly, United States v. Brown serves as a solid reminder that the "staged accident" is not viewed by the courts as a victimless white-collar crime. By affirming that these schemes pose an inherent risk of death or serious injury, the Tenth Circuit has provided insurance carriers with a potent rhetorical and legal tool to use in the ongoing fight against organized fraud rings.

Firm Highlights

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

graphic with Maria Granaudo photo text announces she has joined the firm as a shareholder in the Health Care Dept.

News

Maria R. Granaudo Joins Marshall Dennehey’s Wilmington Office As a Shareholder in the Health Care Department

Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

A five-year-old special education student was enrolled in the Wyoming Valley West School District and attended the State Street Elementary School during the 2024-2025 school year. The student refused to clean up classroom toys at dismissal. When his teacher allegedly grabbed him by the wrist to walk him back to his seat, the student dropped to the floor and began crying. The teacher then allegedly grabbed the student by the ankle and dragged him across the floor. Following an investigation, criminal charges were not advanced by the county DA, and the school permitted the teacher to return to the classroom. The student’s parents sued, lodging thirteen legal counts under both state and federal law, which sought monetary damages from the teacher, the school district, the superintendent, the principal, and the director of special education. The plaintiff’s 42 USC 1983 claims were dismissed as to the school district for failure to allege a policy or custom violation, and the failure to alleged deliberate indifference in the failure-to-train context. As to the superintendent, building principal, and special education director, the Section 1983 claims were also dismissed for failure to allege personal involvement on the part of the individuals. Regarding an equal protection claim asserted against all defendants, the motion to dismiss was also granted for a failure to advance a plausible equal protection claim, holding that “plaintiffs' single-act allegations do not include a factual basis to even infer that the act was motivated by discriminatory animus rather than some other non-discriminatory impulse.” The court further dismissed the plaintiff’s negligence-based claims including negligence against the teacher and district administrators, NIED, and vicarious liability under the Political Subdivision Tort Claims Act (PSTCA). The federal claims under the IDEA, Section 504, and the ADA were also dismissed in various respects. The IDEA claim was dismissed against all defendants with prejudice for failure to exhaust administrative remedies. The Section 504 claims against the individual defendants were also dismissed with prejudice, as districts, not individuals, are the recipients of federal funds under Section 504. However, the Section 504 and ADA claims were dismissed without prejudice as to defendant Wyoming Valley West, and the plaintiff was permitted leave to amend.

Thought Leadership

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

News

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blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Thought Leadership

Marijuana Legalization and Workplace Risk: What New Jersey Employers Need to Know

While the legalization of recreational marijuana usage poses a risk of increased work-related accidents for younger workers, employers can work to curb this increase by investing in education, effective drug policies, and employee assistance programs.

Event

29th Annual FDLA Florida Liability Claims Conference

Jim and Erica will team up to present, "Supporting the Next Generation: Connecting with Associates." This panel-style presentation will explore communication best practices from the perspective of a senior shareholder and newer associate. The discussion will focus on the communication styles of different generations and effective strategies to avoid communication breakdowns. Topics to be discussed include the hiring process, perceptions of defense work among newer lawyers, work-life balance issues after hiring, and mentoring.

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.