Thursday, 30 September 2004 17:00

Insurance Fraud Task Force arrests 38 in CA sting

California authorities arrested 38 people for alleged auto insurance fraud at more than 30 auto body shops in the Sothern California cities of Riverside and San Bernardino Counties. If convicted, each suspect faces up to five years in state prison and a maximum fine of $50,000. 

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Task force investigators visited a total of 66 auto body shops in San Bernardino and Riverside Counties. Undercover investigators approached auto body shop estimators and told them about fraudulent claims they would be making to obtain new, complete paint jobs on their vehicles. The undercover investigators also made it very clear they would return to the body shops to get the car painted once the claim had been "cashed out" by the insurance company. The estimators arrested at 35 shops subsequently supplied undercover officers written estimates supporting the fraudulent claim. Some suspects even coached the undercover officers as to how to make the damage worse on the vehicle so the insurance company would pay to have the whole car painted.

In one case, the auto body shop owner refused to conduct business fraudulently but directed the investigator to another shop that would more likely provide an estimate for false claims.

"Unfortunately, dishonest auto body shops were prevalent and plentiful in the region," said Insurance Commissioner John Garamendi. "Undercover fraud task force agents found that multiple auto body shops were ready and willing to support fraud."

"This multi-agency operation sends a message to auto repair businesses and others to think twice before committing insurance fraud," said Riverside County District Attorney Grover Trask. "You will be prosecuted. The high cost of this crime has been passed along to the insurance industry, businesses, and most importantly, the consumer for too long."

Operation Cash Out was the first ever sting of auto body shops in the Inland Empire and the successful conclusion of the operation has already led the task force to explore other regional, undercover operations in various auto insurance areas.

The suspects were booked into their respective county jails on one felony count each of automobile insurance fraud. The District Attorney's Offices in each county are prosecuting their respective cases.


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