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CA Department of Insurance

Million dollar organized fraud ring targeting Southland auto dealers and insurers leads to 13 arrested in LA area

News: 2014 Press Release

For Release: May 23, 2014
Media Calls Only: 916-492-3566
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Million dollar organized fraud ring targeting Southland auto dealers and insurers leads to 13 arrested in LA area
Charges filed against 18 individuals associated with auto loan and insurance fraud

LOS ANGELES, Calif. – A four-year investigation into an organized fraud ring has uncovered a million dollar scheme targeting high-end vehicles through auto loan and insurance fraud. Multiple teams from the Department of Insurance executed coordinated arrest warrants of the suspects in the early morning hours of Friday, May 23, 2014.

"Insurance fraud is a multi-billion dollar drain on California's economy, that results in higher insurance premiums for California businesses and consumers," said California Insurance Commissioner Dave Jones. "This organized fraud ring filled their pockets by ripping off insurance companies and auto dealers. These individuals conspired to purchase and lease vehicles with the sole intent to default on the loans and make bogus insurance claims. Thanks to the combined efforts and dedication of our enforcement team and District Attorney Jackie Lacey, we are bringing these alleged fraudsters to justice."

The alleged fraud ring purchased or leased high-end vehicles, many of which were acquired fraudulently by various individuals who lied about their employment or income on credit applications to qualify for loans or leases. The suspects then defaulted on the loans and leases while at the same time filing false insurance claims on the defaulted vehicles.

A total of 18 dealerships were defrauded. The scheme involved more than 20 new luxury vehicles and five used vehicles as well as an additional three that have been exported from the country.

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Media Notes:

  • This investigation is ongoing. The department will have updates on this case throughout the coming weeks.
  • Auto dealer information is not available due to the ongoing investigation.
  • 17 suspects are from the Los Angeles area and 1 is from Fresno.
  • More than a dozen Department of Insurance detectives and investigators worked on this case and more than 100 law enforcement personnel from CDI and allied agencies executed the arrest.
  • Arrest photos available; please check our Flickr page for more.
  • Operation High End fact sheet
  • Additional visual available
  • The following agencies assisted department detectives with the service of the arrest warrants include: LA County-Task Force Regional Auto Theft Prevention (TRAP), Ventura County Vehicle Theft Task Force (VenCATT), Los Angeles County District Attorney Investigators, Riverside and San Bernardino District Attorney's office, and Franchise Tax Board.

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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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