17 More Arraigned in $822K California Auto Insurance Fraud Ring – Insurance Journal

February 1, 2022 By admin

Another 17 defendants were arraigned for their alleged involvement in an organized auto insurance fraud ring in California in which dealers reportedly purchased damaged vehicles and then filed inflated claims and even staged thefts, costing insurers a roughly $822,000 loss.
Four people were already sentenced in the multi-agency investigation, dubbed Operation Dealer’s Choice, and 32 defendants were charged or prosecuted in total.
The case was investigated by the San Diego County Organized Automobile Insurance Fraud Task Force made up of the California Department of Insurance, San Diego District Attorney’s Office and California Highway Patrol.
Operation Dealer’s Choice began after the San Diego District Attorney’s Office received a consumer call claiming the ring was purchasing vehicles at local auto auctions and filing fraudulent total damage or theft claims to receive unearned payouts from insurance carriers.
The investigation determined the ring purchased vehicles at auction that were already damaged, had high mileage, or both, at a significantly reduced cost. Once the vehicle was purchased, registered and insured by a carrier, the suspects filed a total damage or total theft claim and the ring shared the profits.
Investigators discovered 45 possible fraudulent auto insurance claims were filed over a four-year period, involving approximately 56 vehicles. Numerous vehicles purchased by the suspects reportedly had the vehicles’ odometer mileages rolled back in order to increase the value of the vehicle before it was damaged or reported stolen. Other vehicles reportedly had significant damage prior to being insured that was not disclosed to the carrier, or are believed to be damaged by the group after being insured.
Investigators believe that ring members staged collisions in which they would purposely damage vehicles to the point of a total loss to collect an insurance claim check for the damage. Suspects also staged thefts to get insurance payouts. In some cases, suspects filed claims shortly after taking out an insurance policy, collected a check for their reported loss, then let the policy lapse without paying the premium.
The ring reportedly victimized 12 insurance carriers, including Nationwide, Stonewood, USAA, California Casualty, Allstate, State Farm, Liberty Mutual, Esurance, GEICO, Kemper, Wawanesa, and AAA.
The San Diego County District Attorney’s Office is prosecuting this case.
Defendants who have been sentenced:
Defendants who have been arraigned:
Additional suspects who have been charged:
Topics California Auto Fraud
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