More than 30 charged, prosecuted in auto insurance fraud ring
Operation Dealer’s Choice busted up a car ring that had filed nearly $1 million in fraudulent insurance claims.
A total of 32 defendants have been charged or prosecuted, with four already being sentenced, for their involvement in an organized auto insurance fraud ring that bilked 12 insurance carriers out of more than $820,000, the California Department of Insurance reported.
During a four-year period, 45 possible fraudulent claims were filed involving more than 55 vehicles, according to the insurance department.
The scheme centered on the purchase of vehicles at auction that had already been damaged, had high miles or both at “significantly reduced costs,” according to the insurance department. After the vehicles were bought, registered and insured, a fraudster would file a total damage or total theft claim. Investigators also believe ring members staged collisions, rolled back mileage to increase vehicles’ values and failed to report significant pre-existing damage to their insurance providers.
Additionally, the suspects would at times file claims shortly after taking out an insurance policy, collect the check from the claim and then let the policy lapse without paying the premium.
“Bilking companies into inflated payouts for insurance claims hurts consumers because ultimately the cost is passed onto them,” San Diego County District Attorney Summer Stephan said in a release. “This investigation began with our office and demonstrates the power of the multi-agency task force to hold the individuals who were part of this fraud ring accountable.”
The ring’s plot began unraveling after a consumer called the attorney general’s office to file a report. The call kick-started Operation Dealer’s Choice, a fraud investigation by The San Diego County Organized Automobile Insurance Fraud Task Force, a coalition made up of the California Department of Insurance, San Diego District Attorney’s Office and the California Highway Patrol.
“Through the hard work of our multi-agency task force, we are taking down this organized fraud ring and protecting consumers who should not have to pay the cost from false and inflated auto insurance claims,” Ricardo Lara, California insurance commissioner, said in a release.
Related: