On May 23rd, 2014

Busted: Million Dollar Fraud Ring Targeting Auto Dealers And Insurers 18 Charged, 13 Arrested

A four-year investigation into an organized ring that netted a million dollars by using 21 high-end vehicles to defraud auto loan and insurance companies has resulted in the arrest of 13 people.

California Department of Insurance detectives and investigators made the arrests early Friday morning,  May 23, 2014. Seventeen suspects are from the Los Angeles area, one is from Fresno.

"Insurance fraud is a multi-billion dollar drain on California's economy, that results in higher insurance premiums for California businesses and consumers," said California Insurance Commissioner Dave Jones. "This organized fraud ring filled their pockets by ripping off insurance companies and auto dealers. These individuals conspired to purchase and lease vehicles with the sole intent to default on the loans and make bogus insurance claims. Thanks to the combined efforts and dedication of our enforcement team and District Attorney Jackie Lacey, we are bringing these alleged fraudsters to justice."


The alleged fraud ring purchased or leased high-end vehicles, including Mercedes Benz, BMW, Audi and Lexus, many of which were acquired fraudulently by various individuals who lied about their employment or income on credit applications to qualify for loans or leases. The suspects then defaulted on the loans and leases while at the same time filing false insurance claims on the defaulted vehicles.

A total of 18 dealerships were defrauded. The scheme involved more than 20 new luxury vehicles and five used vehicles as well as an additional three that have been exported from the country.

"Our law enforcement members in the California Department of Insurance conduct some of the lengthiest and complex investigations you can imagine," said Alan Barcelona, president of the California Statewide Law Enforcement Association which represents CDI law enforcement professionals.  "They have proven, time and again, they will invest the time, energy and expertise necessary to put a stop to those who scheme, scam and take money out of the pockets of law-abiding citizens through fraudulent means."

The accused filed fraudulent claims with Geico, Farmers, Safeco, Esurance, Progressive, Ameriprise, Unitrin, State Farm, Nationwide, Allstate, and Wawanesa; 18 dealerships were defrauded.

The charges filed include: Theft of a Vehicle by False Pretenses, Insurance Fraud, Grand Theft of Money from the insurance companies for taking money to repair the vehicles, and not making the repair, Perjury, on DMV documents and False information on a government document

Assisting in the investigation were:  Bureau Automotive of Repair, Franchise Tax Board,LA County-Task Force Regional Auto Theft Prevention (TRAP), Ventura County Vehicle Theft Task Force (VenCATT), Los Angeles County District Attorney Investigators, Riverside and San Bernardino District Attorney’s office.

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