Friday, 30 June 2006 17:00

Farmers sues two California shops for insurance fraud

Farmers Insurance Exchange and Mid Century Insurance Company have sued two California body shops and their owners, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders. 

The civil complaints, which are similar to prior Farmers lawsuits against shops who submitted false insurance claims, seek not only damages for the fraud committed, but seek injunctive relief, where the courts are asked to order a halt to these deceptive practices. The lawsuits are pending in Santa Clara and Los Angeles.

Once Farmers suspected fraud, it inspected the cars involved to discover physical evidence of fraud.

In the Santa Clara action, Farmers noticed an unusual billing pattern, initiated an investigation and developed evidence against defendants Tommys Body Shop and its owner, Gia Van Tran. Farmers' Special Investigations Unit, which includes body shop experts, inspected all 12 vehicles, allegedly documenting fraud in each invoice.

The expert inspections allegedly revealed substantial discrepancies between the invoices and the work actually performed: The invoices reflected billing for repairs that were not done, billing for replacements where the parts were not replaced, billing for part replacements that were only repaired and other similar billing issues. Farmers is seeking over $320,000 in statutory damages for the intentional actions of the defendants.

The Los Angeles action against Hollywood Auto Body Shop, Inc. and one of its officers, featured similar false claims. Farmers inspected eight vehicles, allegedly finding that 30 percent of each invoice involved billing for parts that were never placed on the vehicles and billing for services that were never rendered. Farmers is seeking over $190,000 in statutory damages for the intentional actions of the defendants.

Farmers said that its investigation is continuing at this time and more claims may be added to the lawsuits and the claim for damages may grow further.

Doug Ashbridge, Director of Special Investigations for Farmers, said, "We will assist law enforcement on criminal matters and file our own civil actions to deter anyone who is contemplating submitting fraudulent insurance claims."

The lawsuits are filed under the California Insurance Fraud Prevention Act, Insurance Code section 1871.7, as well as Business and Professions Code section 17200 for unfair business practices.


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