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News: 2012 Press Release

For Release: October 4, 2012
Media Calls Only: 916-492-3566
Insurance Commissioner Dave Jones Announces $3.2 Million In Grant Funds To Combat Insurance Fraud In Alameda County
Grants for Investigation, Prosecution of Workers' Comp; Disability and Health; Auto Fraud

Insurance Commissioner Dave Jones, joined by Alameda County District Attorney Nancy E. O'Malley, today announced $3.2 million in grants to the Alameda District Attorney's Office to fight workers' compensation, disability and health, and automobile insurance fraud. These funds will assist the Alameda County District Attorney with the investigation and prosecution of fraud.

"I am pleased today to announce $3.2 million in grants to the Alameda District Attorney to fight workers' compensation, disability and health, and auto insurance fraud," said Commissioner Jones. "Workers' compensation insurance fraud drives up the cost of workers' compensation insurance and hurts honest businesses and our economy. Disability and health insurance fraud leads to higher premiums for policyholders and higher costs for providers. Auto insurance fraud drives up the price of auto insurance for consumers."

"Insurance fraud, of all kinds, and at all levels, severely impacts our businesses as well as those who live and work in Alameda County," says District Attorney Nancy E. O'Malley. "As Alameda County's District Attorney, I have made it a priority of my office to stop insurance fraud, to hold those committing fraud accountable and to seek and secure full restitution. I have committed significant resources to the investigation and prosecution of individuals who commit workers' compensation, health and auto insurance fraud. My Office places extreme importance on prosecution of medical provider fraud, including professional treatment providers, and medical-legal fraud. These efforts represent our commitment to ensuring safe and ethical medical treatment for all residents Alameda County. These grant funds will be put to excellent use in our efforts to investigate and prosecute insurance fraud. I thank Commissioner Jones and the Department of Insurance for this grant as well as for the ongoing collaboration between our two offices."

One of the top priorities of Insurance Commissioner Jones is to fight insurance fraud. The California Department of Insurance (CDI) investigates insurance fraud and then works with the District Attorney of each County, who prosecutes the fraud. The Insurance Commissioner awards anti-fraud grants to assist the DAs to prosecute these types of fraud. 

Alameda County was awarded four grants to combat fraud in 2013:

  • $1,425,916 to combat workers' compensation insurance fraud
  • $959,669 to combat regular automobile insurance fraud
  • $736,161 to combat organized (urban) automobile insurance fraud
  • $106,755 to combat disability and health insurance fraud

Grant funds have been used recently in successful investigations and prosecutions of workers' compensation insurance fraud and automobile insurance fraud. In June 2011, a building contractor was sentenced in Alameda County to four years in state prison and ordered to pay $1.2 million in restitution for committing workers' compensation insurance fraud. In August, 2011 a Los Angeles-based attorney, three chiropractors, and nearly 100 suspects in total were sentenced in an automobile insurance fraud conspiracy in Alameda County spanning several years. Operation Phantom Menace, a multi-agency effort and task force, investigated this conspiracy for staging approximately 90 collisions in a combined effort to defraud insurance companies.

The state is preparing to provide more funding to district attorneys to help fight disability and health insurance fraud in California. Just last month Governor Jerry Brown signed AB 2138, which was sponsored by Commissioner Jones and the Department of Insurance, which will increase funding to local district attorneys to investigate and prosecute disability and health insurance fraud throughout California.

The new law takes effect Jan 1, 2013.

CDI announced the 2013 Workers' Compensation Insurance Fraud Grants in a press release in June.


The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.