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 2017-18, the Fraud Division received 14,543 suspected fraudulent claims (SFCs), assigned 475 new cases, made 205 arrests, and referred 216 submissions to prosecuting authorities. The potential loss amounted to $6,170,330,074.
District Attorneys' Automobile Insurance Fraud Program
During fiscal year 2017-18, 34 counties received funding totaling $16,280,012 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 2017-18, California district attorneys initiated 2,532 investigations and made 1,142 arrests. This number includes the Fraud Division’s enforcement actions and local law enforcement investigations. District attorneys prosecuted 1,758 cases involving 1,965 defendants with chargeable fraud totaling $20,714,587, which resulted in 981 convictions and $2,029,028 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 2017-18, the Fraud Division assigned 109 new cases and made 186 arrests and 137 referrals to prosecuting authorities. Potential loss amounted to $2,121,976.
District Attorneys' Organized Automobile Fraud Activity Interdiction Program
During fiscal year 2017-18, 8 counties received funding totaling $6,692,000. The California district attorneys reported 307 investigations and 244 arrests, including Fraud Division arrests. The district attorneys prosecuted 255 cases involving 575 defendants with chargeable fraud totaling $16,337,171, which resulted in 284 convictions and $3,841,275 of restitution ordered.
Organized Automobile Insurance Fraud Interdiction Program Regulations