just want some things clarified:
1) cars 1, 2, and 3......did they even hit each other?
2) was the cop on duty or off duty? as far as i am aware, he cant charge you for anything if he isnt on duty, he can only report you to someone else. Was he even anywhere near seeing the accident, or did he just use his "better judgement"? I am pretty sure that he can only tell what he sees and not come up with some conclusions as its not his speciality ie him being a water cop.
3) dont quote me on this, in the eyes of the insurance company, its always the last person in the queue that is to blame. Either way, if the lady behind you hit you, it means she was too close. But i dont know the circumstances of hard everyone was breaking.
In any case, if you want free advice, go see Legal Aid. Its free and it might be worth while if you dont want to spend big bucks on lawyer fees. Good Luck.