Thursday, February 5, 2009

Northern California auto insurance fraud sweep nets 28 arrests - - 04 Feb 09

Northern California law enforcement officials investigating a rise in auto insurance fraud cases have arrested 28 people since Jan. 28 in a multi-county joint operation.

Participants in the sweep involving alleged auto fraud over the past two months were investigators from the district attorney offices of El Dorado, Placer, Sacramento, Yolo, San Joaquin and Stanislaus counties and the California Department of Insurance’s fraud division.

In all, officials have 38 suspects from 28 cases, according to a Department of Insurance news release. The suspects include six people from Woodland, three from Sacramento and one each from El Dorado Hills, Auburn, Davis, Elk Grove, Orangevale and Roseville.

Conviction for insurance fraud, which is a felony, can result in up to five years in prison and a maximum $50,000 fine on each count.

The Department of Insurance initiated Operation Cover Me, the release said, after determining that a rising number of people are buying insurance and then lying about the date, time, or circumstances of the loss in order to get benefits to which they are not legally entitled.

The operation focused on three types of fraud scenarios:

• Suspects were involved in automobile accidents, but bought insurance coverage after the fact

• Suspects were victims of auto theft, but purchased coverage after the theft

• Suspects did not have insurance coverage for certain excluded drivers on the policies, but the excluded drivers were involved in accidents.

In several cases, suspects allegedly conspired with or solicited friends, family members, and other drivers involved in the accident to help defraud insurance companies.

Payments made in the suspected fraudulent claims were as large as $9,800. Potential losses in other claims were about $35,000, the news release said.

“In these tough economic times, the temptation to commit insurance fraud may be great but the lesson could not be more simple — do not do it, it is not worth it,” Commissioner Steve Poizner said in the release. “Insurance fraud is not victimless, it is ultimately paid for by other California consumers.”

The insurance companies allegedly defrauded were:

• 21st Century Insurance Co.

• Amco Insurance Co.

• Anchor General Insurance Co.

• California State Automobile Association

• Danielson National Insurance Co.

• Esurance Property and Casualty Insurance Co.

• Government Employees Insurance Co. (GEICO)

• Infinity Insurance Co.

• Mercury Insurance Co.

• Progressive Advanced Insurance Co.

• Permanent General Assurance Corp.

• Scottsdale Insurance Co.

• Titan Indemnity Co.

• Unitrin Direct Insurance Co.

• Victoria Fire and Casualty Co.

• Western United Insurance Co.

by Kelly Johnson


Mark said...

There's no questions that there's a significant amount of fraud and some people don't realize that insurance fraud is a felony. Additionally, there seems to be an increase in insurance fraud these days...

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