An alleged “family and friend” organized auto insurance fraud ring was thwarted by the Urban Automobile Insurance Fraud Task Force. On Aug. 15, seven individuals were arrested in connection to this case. In total, 23 individuals face felony counts of insurance fraud and conspiracy.
Alleged ring leader, Gerson Castro Martinez, 34, of San Jose, CA, was arrested July 29 on eight felony counts. Castro allegedly involved family and friends in a fraud scheme that netted defendants more than $174,000.
An investigation uncovered 33 claims that contained a similar modus operandi, where repeat damage claims were made, insurance policies purchased either with fictitious identities or involved parties that knew each other but reported claims as though they were strangers and had been involved in a loss. The ring used at least 40 different vehicles. Some were purchased with damage, and some sustained damages in staged collisions. They ran the scheme for four years.
“This alleged auto insurance fraud ring is a prime example of the type of fraud that increases premium prices for all California drivers,” said Insurance Commissioner Ricardo Lara. “The hard work of our multi-agency task force stopped this organized insurance crime ring that operated for years stealing more than $174,000 in fraudulent auto claims.”
According to Department of Insurance detectives the fraud was uncovered when Rene Murillo Hernandez, 43, of Santa Clara, alleged he hit a parked vehicle after his vehicle was struck by an unknown driver. Murillo left a note with his insurance information on the parked vehicle he struck. When the owner of the parked vehicle, another alleged member of the fraud ring, turned in a claim to the insurance company, the investigation revealed the damages were inconsistent with the two vehicles colliding with each other.
Further investigation revealed the damages allegedly sustained in this incident were previously reported in a prior loss under different ownership, and that the PO Box address that was being used was used in several other similar claims by other individuals all claiming the PO Box address was the address where their vehicles were housed.
The claims were investigated by the Urban Automobile Insurance Fraud Task Force, made up of the California Department of Insurance, Santa Clara County District Attorney Investigators, the California Highway Patrol and the National Insurance Crime Bureau (NICB).
The arrests were carried out by detectives with the California Department of Insurance, the Santa Clara County District Attorney’s Office, California Highway Patrol, Santa Clara County Sheriff’s Office and San Jose Police Department. This case is being prosecuted by the Santa Clara County District Attorney’s Office.
Source: California Department of Insurance
