A Kentucky man will have to pay almost half a million dollars in restitution to eight different insurance companies after he pled guilty to 11 felony counts including grand theft and insurance fraud. Oh, and he's also going spend the next five years in a southern California prison.
On June 11, Tam Lai, aka Timmy Lai, 33, of Louisville, Ky., was sentenced to five years in prison by a San Diego County Court judge after his elaborate auto insurance fraud ring was busted by investigators.
In Dec. 2004, the Auto Club of Southern California notified the California Department of Insurance (CDI) that they suspected a group of individuals were involved in filing fraudulent claims. The insurer discovered that duplicate claims were being filed for the same vehicles with the same damages, and each had a similar story.
The insurer also observed that all vehicle repairs were completed by the same body shop, Marshall Auto Body in El Cajon. Shortly after receiving the tip, CDI opened an investigation, which involved more than 50 auto insurance claims and 14 different vehicles.
The CDI investigation revealed that multiple claims were filed with various insurance companies, with most of the claims coming from Marshall Auto Body. Lai was the owner of the body shop, and allegedly orchestrated the fraudulent claim-filing scheme. Lai and his accomplices purportedly purchased vehicles, obtained insurance policies on the vehicles, and staged non-injury accidents with them.
Lai and his accomplices would then allegedly file multiple claims with insurance companies. They commonly reported that the insured was traveling on a two-lane road in San Diego County when they were involved in a hit-and-run collision, or that they hit a fixed object. Lai and his accomplices endorsed and deposited claim checks from insurance companies into multiple different bank accounts in an attempt to avoid detection.
The investigation also revealed that insurance claims were pursued by Lai and his accomplices until insurance companies began to question the legitimacy of the claim or opened an investigation. When this occurred, the questionable claim was withdrawn.
Lai will have to pay more than $415,000 in restitution to the insurance companies he defrauded.
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