$4 million insurance fraud and arson scheme unfolds in Calif.
The ringleader of a family arson crew pleaded guilty last week to an insurance fraud case after claiming damages from five victim insurers.
The ringleader of a family arson crew recently pleaded guilty to a $4 million insurance fraud case, the California Department of Insurance reported.
Tyler Chen and his wife, Kim, pleaded guilty last week in the Santa Clara County Superior Court on multiple felony counts of insurance fraud and arson. Business associate, Ha Nguyen, and three other co-conspirators, recruited by Chen, were also arrested and charged. Nguyen pleaded guilty to multiple felony counts of insurance fraud and arson on September 16, 2019.
Arson investigation
The scam appeared on the DOI’s radar in January 2014, when the department received a tip regarding a string of home, business and warehouse fires that occurred between December 2011 and September 2013. The tipster also gave details on the next planned house fire. Subsequently, the DOI launched an investigation named Operation Firebird with the San Jose Fire Department, the Santa Clara County District Attorney’s Office, and the San Joaquin County District Attorney’s Office to look into fires that ignited at a business and two homes owned by the Chens.
The Chens claimed that both house fires were started whilst frying chicken on an unattended stovetop; however, it was discovered that Chen arranged the scene to make it appear as if the fire was caused by a cooking accident, even going as far as planting smoke damaged items in the house that were already used in previous scams at warehouses owned by Chen and Nguyen.
Furthermore, investigators discovered that items claims as damaged in the fire were only just purchased and not in possession, which led to the arrest of Nguyen for his role in the scheme.
In total, Chen and Nguyen successfully claimed damages of $4,009,008 from five victim insurance companies after filing a claim for damages totaling $5,653,665.
“We stamped out this dangerous and costly scam thanks to the hard work of Department of Insurance detectives who pursued a tipster’s alert and launched a joint investigation,” Insurance Commissioner Ricardo Lara said in a statement. “Operation Firebird is a great team effort and shows how our department works with local investigators and district attorney’s offices to combat complex insurance fraud.”
The Chens and Nguyen will return to court on January 3, 2020, for sentencing.
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