Arson — California

Amount: More Than $4 Million

The ringleaders of a vast arson ring were arraigned yesterday and face over 30 felony counts of fraud and arson. A man and his wife were arrested for multiple felony counts of insurance fraud and arson for their role in setting fires in a fraud scheme scamming five insurance companies out of $4 million. Four co-conspirators were also arrested.

In January of 2014 the California Insurance Department received a tip through its consumer hotline regarding a connection between a string of home, business, and warehouse fires that occurred from December 2011 to September 2013. Along with this information, the tipster gave the address of where the next staged house fire would occur. The Department, working with the San Jose Fire Department and two surrounding District Attorney's offices, launched a joint investigation that revealed two fires occurred at a business owned by the couple, and soon after, their homes also burned. The couple reported the residential fires, noting that the fires began when chicken that was being fried was left unattended on the stove. The couple made it appear as though the fire was the result of unfortunately careless cooking, and planted smoke damaged items, which had already been claimed in other alleged fires, in other staged fire locations. Investigators allege that the man and his business partner used smoke-damaged belongings to also claim that fire damage occurred in their warehouses which they rented for an import and export business they owned. Investigators also discovered that some goods that had been claimed lost in the fire had been purchased, but had not yet been received. The couple recruited three other individuals to participate in the scheme, even allowing them to use the same smoke-damaged personal property used in the original fires. The damages claimed in all of the fires totaled $5,653,665 but the five victim insurance companies only paid out $4,009,008 before the fraudsters were caught.

The man faces 5 counts of arson of an inhabited structure, 3 counts of arson in a structure, 11 counts of insurance fraud, and one count of destruction of property. The business partner will be arraigned on June 5th and the couple and their co-conspiring fraudsters will return to court in July.