Automobile Insurance Fraud Program
The Fraud Division is the primary law enforcement agency responsible for investigating automobile insurance fraud crimes, and it coordinates enforcement operations with municipal, state and federal enforcement agencies throughout California. Completed investigations are filed with the local district attorney or the United States Attorney General’s Office.
Fraud Division detectives enforce the provisions of California Penal Code Sections 548 –550. Detectives focus on five major categories: medical mills, organized crime,staged collision rings, false and fraudulent claims, and organized economic automobile theft groups. Organized criminal elements continue to use these types of schemes.
During Fiscal Year 2012-13, the Fraud Division received 17,981 suspected fraudulent claims (SFCs), assigned 721 new cases, made 401 arrests, and referred 304 submissions to prosecuting authorities. The potential loss amounted to $120,079,146.
District Attorneys' Automobile Insurance Fraud Program
During Fiscal Year 2012-13, 34 counties received funding totaling $15,259,000 through the Department’s Auto Insurance Grant Program. The financial support provided to each county is based on county population, the number of Suspected Fraudulent Claims (SFCs) reported, and the Insurance Commissioner’s evaluation of the county’s historical performance and plan description.
For Fiscal Year 2012-13, California district attorneys initiated 2,651 investigations and made 1,343 arrests, culminating in 1,127 convictions. This number includes the Fraud Division’s enforcement actions, and local law enforcement investigations.
Chargeable fraud amounted to $16,191,501, with $5,031,603 in restitution ordered by the courts.
Organized Automobile Fraud Activity Interdiction Program
The California State Legislature has determined that organized automobile fraud activity operating in major urban centers of the State represents a significant portion of all individual fraud-related automobile insurance cases. This fraudulent activity drives higher insurance premiums in certain urban and low-income areas of the state. The problem demands coordinated effort by all appropriate agencies and organizations. California Insurance Code Section 1874.8 requires the Insurance Commissioner to award three to ten grants for a coordinated program targeted at the successful prosecution and elimination of organized automobile fraud activity. The primary focus of the program is organized criminal activity that occurs in urban areas and which often involves the staging of collisions and filing accident or damage claims.
Typically, legal and medical professionals or their associates mastermind these cases. In recent years, highly sophisticated groups have captured the attention of the Fraud Division, prosecutors and allied law enforcement.
During Fiscal Year 2012-13, the Fraud Division assigned 231 new cases and made 222 arrests and 172 referrals to prosecuting authorities. Potential loss amounted to $5,149,466.
District Attorneys' Organized Automobile Fraud Activity Interdiction ProgramDuring Fiscal Year 2012-13, ten counties were awarded grant funding totaling $6,692,000. The grant awarded to district attorneys reported 232 arrests, which included many Fraud Division arrests. District attorneys prosecuted 204 cases involving 448 defendants with chargeable fraud totaling $8,264,578. District attorney prosecution resulted in 180 convictions.
Organized Automobile Insurance Fraud Interdiction Program Regulations