Individuals in LA-based organized fraud ring sentenced to prison for staging auto collisions to collect insurance money
News: 2021 Press Release
LOS ANGELES — Los Angeles residents Victor Valle-Diaz, 55, Eduardo Retana, 25, and Ausencio Gomez, 46, were sentenced to serve in state prison after pleading no contest to charges of insurance fraud and assault for their involvement in the organized ring. The three defendants were involved in 15 staged collisions involving 21 victims, some who were severely injured, in a scheme to fraudulently collect nearly $330,000 from insurance companies.
Valle-Diaz was sentenced to seven years in state prison, Retana was sentenced to six years in state prison, and Gomez was sentenced to four years in state prison. All three admitted to an enhancement of more than $100,000 in losses and were ordered to pay $343,883 in restitution to the victims.
“These defendants staged collisions that put innocent motorists in harm’s way. This is not just a 'white collar' fraud scheme that only results in property damage, these types of schemes can result in serious injuries and cause financial loss to innocent victims and insurance companies," said Insurance Commissioner Ricardo Lara. “Thanks to the excellent work of department detectives and aggressive prosecution by the Los Angeles County District Attorney’s office, we were able to take down these fraudsters and bring them to justice."
The Los Angeles Auto Insurance Fraud Task Force, comprising of Department of Insurance detectives and California Highway Patrol investigators, began an investigation after a CHP officer responded to what he suspected was a staged collision. The investigation revealed Retana and Gomez intentionally staged a collision on a Los Angeles freeway for the purpose of insurance fraud. Both admitted to participating in the scheme in exchange for money and stated a third party orchestrated it, providing them with a vehicle and a fraudulent identification card. The third party was later determined to be Valle-Diaz.
The staged collision was completed by performing a “Sudden Stop” on the freeway while traffic was flowing, forcing the victim who was driving a Mercedes SUV, to rear-end the vehicle driven by Retana and Gomez. A driver of a Toyota Tacoma became an unintended victim when it collided with the rear-end of the Mercedes. Both the driver and passenger of the Toyota were transported by ambulance from the scene of the collision. The driver of the Toyota suffered the loss of a tooth and a broken foot, which required surgery.
The “Sudden Stop” scheme of staged collisions is orchestrated in a manner in which an innocent victim is intentionally targeted and forced to be the “at fault” driver in a rear-end collision, so that the suspects can profit from a fraudulent insurance claim against the victim driver’s insurance company.
Further investigation found Retana and Gomez colluded with Valle-Diaz to coordinate 14 additional staged collisions involving over 20 victims between January 2020 and September 2020. Valle-Diaz acted as the “capper” for the staged collisions, meaning he ensured policies are obtained, often using false identities, developed “scripts” for claimants, coordinated staged collisions and followed through with filing the insurance claim.
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- More information on staged collisions and other types of fraud: http://www.insurance.ca.gov/flipbook/fraud/16/
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.