Eastvale resident arraigned on 14 felony counts of insurance fraud in “paper collision” scheme
News: 2021 Press Release
LOS ANGELES — Farrukh Hussain, 37, of Eastvale, was arraigned on 14 felony counts of insurance fraud after allegedly stealing consumers’ identities to file 14 fraudulent insurance claims with six different insurance companies using a “paper collision” scheme, meaning most of the accidents never occurred and only existed on paper.
“Insurance fraud impacts consumers and businesses through higher costs, which in turn has the potential to slow our state’s economic recovery from the pandemic,” said Insurance Commissioner Ricardo Lara. “Fraud of any kind will not be tolerated by the California Department of Insurance. We will continue to work with our district attorney and industry partners to protect consumers and fight insurance fraud.”
The Department of Insurance launched an investigation after multiple insurance companies flagged claims that they had received. An investigation found that Hussain stole his victim’s insurance information and posed as that person to report accidents where he was the other party involved. While posing as his victims, Hussain would admit fault to the accident and request their contact information be updated to his own phone number so the insurance company would contact him regarding the claims instead of the real policyholder in order to get away with the scheme.
Detectives discovered Hussain obtained his victims’ insurance information while their vehicles were being worked on at a stereo and tint shop in Covina where he was previously employed for a short time as a “sales-helper”, and is suspected of obtaining victims’ information while brokering vehicle purchases for them. Hussain used two BMWs, which he owned, that possessed pre-existing damage and presented the same damage on each claim he filed. Many of the claims were for “paper collisions”; however, in one instance, Hussain was able to obtain one victim’s information from a traffic collision report through a legitimate accident.
Hussain’s alleged actions resulted in a total loss of $17,293 to six different insurance companies.
This case is being prosecuted by the Los Angeles County District Attorney’s Office.
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Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
