California Arrests Dozens in Fraud Operation

California Insurance Commissioner Steve Poizner announced that, beginning Jan. 28, the California Department of Insurance's Fraud Division (CDI) and investigators from the district attorney offices of El Dorado, Placer, Sacramento, San Joaquin, Stanislaus, and Yolo counties executed nearly 40 arrest warrants during Operation Cover Me.

The operation investigated alleged auto insurance fraud over a two-month period, and resulted in 28 cases with 38 suspects. To date, 28 suspects have been arrested and five were issued notices to appear for arraignment; there are outstanding arrest warrants on five remaining suspects.

CDI initiated Operation Cover Me after detecting a rising trend of suspected fraudulent cases where a claimant is either uninsured or inadequately insured, at the time of a loss. The claimant(s) subsequently obtains an insurance policy, and then allegedly lies about the date, time, or circumstances of the loss in order to get benefits to which they are not legally entitled. Operation Cover Me focused on three specific types of automobile fraud scenarios.

1. Suspects were involved in automobile accidents, but obtained insurance coverage after the fact;
2. Suspects were victims of auto theft, but purchased coverage after that theft; and
3. Suspects did not have insurance coverage for certain excluded drivers on the policies, but these excluded drivers are involved in accidents.

In several of the cases, the suspects allegedly conspired with or solicited friends, family members, and other drivers involved in the accident to help perpetrate the fraud.

Allegedly, fraudulent claims were paid up to $9,800. Potential losses in other claims were approximately $35,000.

The insurance companies allegedly defrauded were:

• 21^st Century Insurance Company
• Amco Insurance Company
• Anchor General Insurance Company
• California State Automobile Association
• Danielson National Insurance Company
• Esurance Property and Casualty Insurance Company
• Government Employees Insurance Company (GEICO)
• Infinity Insurance Company
• Mercury Insurance Company
• Progressive Advanced Insurance Company
• Permanent General Assurance Corporation
• Scottsdale Insurance Company.
• Titan Indemnity Company
• Unitrin Direct Insurance Company
• Victoria Fire and Casualty Company
• Western United Insurance Company