Arrest Made In Auto Fraud Ring [Los Angeles]

Daily Breeze ^ | November 24, 2005 | Alison Shackelford Hewitt

[DumpsterDiver]

Schemes that trapped drivers into rear-end collisions netted $3 million from insurers, California officials say.

The leader of a major auto insurance fraud ring that tricked unsuspecting drivers into rear-end collisions has been arrested, state Insurance Commissioner John Garamendi announced Wednesday. Huntington Park attorney Bernard Laufer, 52, was arrested Tuesday morning.

Laufer's recruiter in the scheme, La Verne resident Humberto Carlon, 22, was arrested earlier in the investigation and is serving a two-year prison sentence, Garamendi said.

The San Gabriel Valley-based scheme is nearly identical to one in the South Bay that Garamendi's office shut down in December, and one that has grown in scope as his office continues to investigate.

In both schemes, a "stager" recruited drivers to target expensive cars or company-branded big-rigs that appeared likely to have insurance. The ring's drivers -- often illegal immigrants in rental cars or junkers -- would swerve in front of their victims and slam on the brakes in a move known as a "swoop and squat," members of the state's Insurance Fraud Department explained.

The San Gabriel case involves as many as 70 crashes and at least 25 recruits.

The South Bay case began with 30 known collisions, and continued investigations have expanded the number to at least 100, state officials said.

A Koreatown ringleader staged the crashes on the Harbor (110), San Diego (405) and Century (105) freeways.

Recruits in both cases were paid perhaps $100 per collision, while the ringleaders made their money by submitting fraudulent insurance claims, Garamendi said. The two schemes each netted more than $3 million from insurers.

"When these kinds of insurance frauds occur, it's not just about money out of the insurance companies' pockets and ultimately out of the consumers' pockets. We're talking about life-and-death situations," Garamendi said.

"This is not a victimless crime. People have died, others have been injured, and there's an extraordinary risk whenever this kind of swoop-and-squat freeway insurance fraud takes place."

The crashes also contributed to rising insurance rates, Garamendi noted, attributing as much as 25 percent of the overall cost of insurance to fraud.

Holiday drivers should be sure to maintain a safe distance from the cars in front of them, Garamendi added.

"If you're on the freeways and somebody stops in front of you for no reason at all, just slams on the brakes, you ought to be thinking, 'This may be a staged auto accident,' " he said.

[DumpsterDiver]

Among those particiating in the scam were members of a Bible study group. The church seemed to be one of the places [Carlon] recruited from. Humberto Carlon, 22, of La Verne also recruited friends and family members to participate. State officials did not give the name of the church.

Many of the suspects were illegal immigrants who were promised they would earn hundreds if not thousands of dollars. Officials did not have the names of all of the arrested suspects, but authorities identified:

Ontario residents Daniel Hernandez, 26; Karinna Valenzuela, 22; Martha Deniz, 19; Veronica Santillan, 26; and Carlos Meza, 34. Chino residents Sonia Alburto Alvarez, 35; Alberto Espinoza, 29; Jorge Covarrubias Jimenez, 31; Angelina Alverez, 56; Jorge Jimenez, 31; Cesar Salas, 29; and Sofia Hernandez, 34.

Riverside residents Juan Cervantex, 24; Maria Gonzalez, 23; Ernesto Navarro, 18; and Armando Gonzalez, 22.

South Gate residents Luis Alberto Lopez, 25; and Fernando Ramirez, 30.

Lakewood resident Lorena Campos, 21,

Bell Gardens resident Bertha Villa, 55, and

Pomona resident Veronica Contreras, 26.

Source

[Mark was here]

The rule is the car in the rear is always at fault. This rule may need revision.

Drivers may help protect themselves (and even get a break in their insurance rates) by installing dash cameras.

[ex-Texan]

I was the victim of a "stop and squat" MVA set up Luckily, I was going very slow at the time. The car ahead of me simply fell apart when I taped it. No damage at all to my car which at the time was a 1989 Mazda 626. There was not even a mark on my bumper. Four people piled out of the car head of me. One was a young Mexican woman wearing a T-shirt advertising a chiropractor's services. The cops look at my car and inspected at the car ahead of me. He was just shaking his head. I was not ticketed for the accident and informed the officer it was a "stop and squat." He agreed with me.

I was outraged because my insurer paid out about $ 5 k for alleged injuries. The insurer did a very poor job of investigating the accident. California is beset by fraud schemes.

[AllingtonCastle]

And this is exactly why armed border guards should be authorized to "shoot-on-sight".

Animals.

[Mark was here]

Lots of insurance companies raise their rates if you are simply involved in an accident

[Aggie Dad]

"...I was outraged because my insurer paid out about $ 5 k for alleged injuries. The insurer did a very poor job of investigating the accident..."

Their rationale is it is cheaper to simply pay off than go to trial. And if your insurance company won the case they probably wouldn't be able to recoup ANYTHING since the complaintants wouldn't have insurance themselves and no assets to seize.

[WatchingInAmazement]

This little bit was announced on Lou Dobbs last night. I wonder if anyone else has heard more about it.


And this just in to CNN. A jury in New York today convicted a Pakistani man of trying to help an al Qaeda terrorist to slip past U.S. Custom officials. The man was found guilty of providing material support to terrorists and other charges. He could face up to 75 years in prison when he is sentenced in March next year.
http://transcripts.cnn.com/TRANSCRIPTS/0511/23/ldt.01.html
aired 11.23.05

[DumpsterDiver]

Here's a ping for ya!

[kstewskis]

bastards.

One of the prime reasons I am switching careers in the near future, investigating insurance fraud.