Fraudsters behind “crash for cash” insurance scams are using their illegal money to finance serious organised crime like drug trafficking and gun running, investigators have revealed.

The Bradford district, and in particular Keighley, is one of the country’s “hotspots” for such insurance frauds, with 23 fraudulent claims – with potential payouts of more than £1 million – being uncovered by investigators.

And police say that figure is just “the tip of the iceberg”.

Detective Sergeant Ben McDonald, of Airedale and North Bradford CID, said the fraudsters used three methods – claiming for accidents that had not happened, staged accidents and contrived collisions, or “slam-ons,” where innocent third party motorists were deliberately involved.

He said systems in the competitive insurance industry were open to abuse and needed to be reviewed. Det Sgt McDonald said many more accidents and insurance claims were being recorded but claims were now being questioned more vigorously.

And he said successful prosecutions, like that of Keighley businessman Mohammed Rashid last week, sent out a message to other criminals.

Rashid, 37, the owner of Autotransform in Bradford Street, Keighley, was jailed for five years by a Bradford Crown Court judge after orchestrating false, staged and exaggerated road accidents to fleece insurance companies.

John Beadle, chairman of the Insurance Fraud Bureau, which is working closely with police, said there was growing evidence to show that the proceeds from this type of fraud are used to fund other forms of serious crime including drugs trafficking and gun running.

Det Sgt McDonald said that a substantial amount of pure heroin had been found during raids in another crash for cash inquiry in Keighley.

He said: “It suggests to me that ‘crash-for-cash’ is being used to fund the purchase of hard drugs ready to cut up for street dealing, which is very concerning. It is organised crime.

“This is a multi-million pound industry. It is fraud on an industrial scale.

“Last week’s sentence was a good one. Such sentences act as a deterrent to organised criminal leaders. It sends out a message that we will target big criminals and we hope it will have a ripple effect on criminal organisations. We hope they will look at this and realise they are not untouchable.”

The public can report insurance fraud by ringing the IFB Cheatline on 0800 328 2550 or online at www.insurancefraudbureau.org/report/