Fraud News: Auto Fraud Rings Busted, Fake Boat Insurance Claim Uncovered
Arrest warrants were issued this week in connection with an automobile insurance fraud ring centered in the Columbus, Georgia area, according to an announcement by Insurance Commissioner Ralph Hudgens.
The fraud ring, comprised of 26 suspects, allegedly staged automobile collision and filed false claims resulting in estimated payments of $155,925 from 12 different insurers.
The warrants, according to Hudgens, are the culmination of a 16 month investigation by the Georgia Department of Insurance’s Special Fraud Division. The suspects face 326 charges, ranging from insurance fraud, theft by deception, racketeering, identity theft and exploitation of an elderly person.
The investigation uncovered that the suspects were involved in an organized auto insurance fraud ring that submitted more than 50 suspicious claims to multiple insurance companies for damage to vehicles that occurred before the vehicle was insured. In addition, the suspects used multiple aliases and stole identities on the insurance claims to avoid detection by insurers. Fraud investigators allege that the ring attempted to get payouts totaling more than $500,000.
Insurers victimized by the scam included GEICO, State Farm, Nationwide, Safe Auto, Allstate, Progessive, USAA, Georgia Farm Bureau, Safeway, Everest National, Direct Auto and General Insurance.
Mark DeGross, of Snohomish, Wash., faces one charge of first-degree attempted theft and one charge of insurance fraud, both felonies. A bench warrant for his arrest was issued on June 2 and bail is set for $5,000 cash, according to the Washington State Office of the Insurance Commissioner.
According to the investigation, DeGross filed a $9,351 claim with Progressive Insurance for damage to his boat that he said occurred in January 2015 while he was wakeboarding at Lake Entiat near Wenatchee. Investigators determined that the accident actually happened in July 2014, before DeGross purchased a boat policy in September 2014.
New York’s Attorney General Eric T. Schneiderman announced a 42-count indictment, charging six individuals for their participation in an auto insurance fraud scheme in which the defendants allegedly cheated insurance carriers out of over $120,000 by submitting fake property damage claims for high-end vehicles. Four of the charged defendants, including the ringleader, were arrested and arraigned this week in Kings County Supreme Court.
According to the Attorney General’s indictment, between January 2014 and September 2015, members of this insurance fraud ring allegedly conspired to submit 11 fake property damage claims, which included multiple false misrepresentations, including the manner in which car accidents and purported damages occurred. The defendants also allegedly resubmitted claims for the same vehicles with preexisting damages multiple times. In order to maximize insurance payments, the defendants utilized high-end vehicles, including a Lexus, BMW, Audi, Mercedes, and Bentley. The defendants received payments ranging from $5,000 to over $20,000 for their property damage claims.
In addition, prosecutors allege that in three of the charged claims, the defendants used the stolen identity of a United States serviceman. As a result of their alleged conspiracy, the defendants fraudulently obtained a total of over $120,000 in insurance payments for their counterfeit claims and cashed insurance checks at two Pay-O-Matic check cashing branches in Kings County, New York.
The Attorney General’s 42-count indictment charges the defendants with Insurance Fraud in the Second Degree (a class C felony), Insurance Fraud in the Third Degree (a class D felony), Identity Theft in First Degree (a class D felony), Grand Larceny in the Third Degree (a class D felony), Falsifying Business Records in the First Degree (a class E felony), Scheme to Defraud in the First Degree (a class E felony) and Conspiracy in the Fifth Degree (a class A misdemeanor).
If convicted of the top count charged, ringleader Carlington Haye will face up to 5 to 15 years in prison, and the remaining defendants face up to 2 1/3 to 7 years in prison.
The charges against the defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty in a court of law.