Dozens Charged in Auto Insurance Fraud Investigation

A District Attorney investigator notifies a defendant of the charges against them as part of Operation Insure. More than 40 people in San Diego have been charged in connection with the operation.
December 20, 2012 | 12:03pm

An investigation into auto insurance fraud has resulted in felony charges filed against 42 defendants, the District Attorney’s Office announced Thursday.

As part of Operation Insure, law enforcement investigators from the D.A.’s Office and California Dept. of Insurance fanned out across San Diego County on Dec. 19 and 20, serving defendants with Notification Letters informing them of the charges. 

The ­­­­­four-month investigation targeted defendants who obtained auto insurance after an accident or theft, and then made fraudulent claims for the loss.  The investigation was initiated after law enforcement agencies and the National Insurance Crime Bureau determined this is the most common type of auto insurance fraud occurring in San Diego County.  The defendants were charged with knowingly presenting a false or fraudulent claim for the payment of a loss or injury under a contract of insurance, a felony.   If convicted, the defendants face up to five years in state prison and a $50,000 fine.

“Insurance fraud costs the insurance industry billions of dollars a year and that cost is passed on to the consumer.  Operation Insure is a warning to individuals considering auto insurance fraud that we’re investigating and prosecuting these cases, and the penalty can be steep,” said District Attorney Bonnie Dumanis.  “Since this is one of the most common types of insurance fraud in San Diego County, we worked collaboratively with the Department of Insurance to hold these individuals accountable and send a strong message to the public.”

The DA’s Insurance Fraud Division partnered with the California Department of Insurance to initiate Operation Insure.   All of the investigations involve fraudulent auto insurance claims being filed against insurance companies.  The majority of the investigations involve fraudulent auto insurance claims filed by people who have purchased a new insurance policy or re-instated an expired policy after an accident, theft, or loss has occurred, in an attempt to fraudulently gain coverage from the insurance company for the loss.  At the time of the loss, the suspects did not have valid insurance coverage and they either lied or omitted information to the insurance company when purchasing or re-instating a policy and subsequently filed a false claim.  These types of fraud are felonies under California Penal Code Sections 550(a) & (b).

“Combating insurance fraud is one of my top priorities as Insurance Commissioner,” said California Insurance Commissioner Dave Jones. “When suspects allegedly collude to defraud insurance companies for financial gain, it drives up the costs of premiums for law-abiding consumers. I commend the investigators from my Department and the District Attorney’s office for their joint efforts and hard work in this case.”

The defendants were not arrested, but were notified of the charges through hand-delivered letters.  The defendants have all been given arraignment dates in January, 2013, in San Diego Superior Court downtown, North County or East County.  Any defendant who does not appear in court as scheduled is subject to the request for the issuance of a warrant for their arrest.

“The National Insurance Crime Bureau works to expose this kind of fraud wherever it occurs,” said NICB President and CEO Joe Wehrle. “However, exposing it is only part of the solution—prosecution delivers lasting impact.  NICB commends Commissioner Jones and District Attorney Dumanis for taking an aggressive stand against insurance fraud and we will continue to provide our support to law enforcement and prosecutors as we all seek to eradicate this illegal activity.”        

"The crime of purchasing insurance after a loss and then lying about an accident or theft perverts the concept of insurance and forces honest consumers to pay more. We applaud the law enforcement agencies for cracking down and sending an unmistakable public message that driving without auto coverage and trying to bilk your insurer is a dead-end street,” said Dennis Jay, Executive Director of the Coalition Against Insurance Fraud.

The California Department of Insurance has a Consumer Hotline to serve the needs of the public. Individuals with information regarding fraudulent insurance activity may call the Consumer Hotline at 800-927-HELP (4357). Callers who reside out-of-state dial (213) 897-8921. All suspected fraudulent insurance claims reported to the Consumer Hotline are forwarded to the Fraud Division.  It is important to know that notification of insurance fraud may be made anonymously. The Insurance Code states that no insurer, or the employees or agents of any insurer, shall be subject to civil liability for libel, slander, or any other relevant cause of action by virtue of providing information, in good faith, concerning a suspected fraudulent claim to law enforcement, including the California Department of Insurance Fraud Division.