10 People Charged in $500K San Diego Car Insurance Fraud Ring
County prosecutors announced multiple charges of insurance fraud against 10 individuals believed to be members of a San Diego auto fraud ring that operated for several years. Those charged are accused of purchasing damaged vehicles and then staging car thefts in order to collect on insurance claims. All told, the group is reported to have collected approximately $500,000 by filing numerous fraudulent claims. Of the four suspects apprehended by authorities, one was arrested on four counts of insurance fraud, while the other three were each booked on five counts.
According to authorities, the scheme essentially involved purchasing high mileage vehicles, typically with significant damage, at auctions. The suspects registered and insured the vehicles and subsequently submitted false damage or theft claims to a dozen different insurance companies, according to the California Department of Insurance. Investigators with the District Attorney’s Office, the California Highway Patrol, and the state Department of Insurance were all involved in the arrests.
Investigators believe that 56 vehicles were used throughout the scheme. Over the course of approximately four years, the defendants are suspected of filing nearly three-dozen insurance claims. Additionally, according to prosecutors, the suspects would roll back the cars’ odometers in an effort to increase their value prior to reporting them stolen.
The genesis of the case against the 10 defendants came via a tip to the District Attorney’s office, which ignited an investigation dubbed ‘Operation Dealer’s Choice.’
State Insurance Commissioner, Ricardo Lara, issued a public statement regarding the effects that such a widespread insurance scam can have, and noted the far-reaching ramifications that impact each of us as drivers:
“The alleged scam we uncovered in Operation Dealer’s Choice was a bad deal for drivers who have to pay more through higher premiums as a result of insurance fraud.”
Three of the four arrested defendants pleaded not guilty on the afternoon of December 6 at the San Diego Superior Court. The fourth suspect posted bail, but is due for arraignment on Dec. 12. The aforementioned three defendants accounted for, according to Deputy District Attorney, Luis Mendez, over $320,000 in the overall scam. All members of the fraud ring are alleged to have shared in the profits of the scheme that garnered over $500,000 on a reported 35 separate insurance claims.
District Attorney, Summer Stephan, issued a statement reading, “Stealing from insurance companies hits all of us in the wallet because the loss is passed on to the consumer,” while adding, “These defendants carried on their criminal enterprise for years until the joint task force’s outstanding work stopped them in their tracks.”
Of the ten defendants charged, only four are currently in police custody. Of the four defendants taken into custody, three are residents of San Diego, while the fourth lives in Imperial Beach. Six individuals allegedly involved in the insurance fraud scam remain at large. Additionally, six defendants are named in the criminal complaint, though they have yet to be arrested.