Calif. Fraud Cases Pile Up Past Several Days
Continuing Insurance Commissioner John Garamendi’s commitment to fight insurance and workers’ compensation fraud, the California Department of Insurance, Fraud Division (CDI) was involved in the arrest or surrender of three individuals over the past several days in three separate cases involving reported fraud.
On May 6, 2004, Gaetano Chirco, 55, San Jose, self-surrendered in Santa Clara County on a felony arrest warrant – three counts of workers’ compensation insurance fraud and one count of perjury. Bail was set at $50,000 and he was released on his own recognizance. The case is being prosecuted by the Santa Clara County District Attorney’s Office.
On May 11, 2004, Allen Delord Alexander, 35, Stockton, was arrested without incident and booked into the San Joaquin county jail on three felony charges – identity theft, altering a driver license, and display of an altered driver license. Bail was set at $50,000. The Sacramento County District Attorney’s Office is prosecuting the case.
Also on May 11, Julie Valdez (aka Julie Lynn Nelson and Julie Valdez Nelson), 36, Merced, self-surrendered in Merced County Superior Court on an arrest warrant for two felony counts of insurance fraud. Valdez was cited to appear in Merced County Superior Court on June 7, 2004. The case is being prosecuted by the Merced County District Attorney’s Office.
If convicted, Chirco could face up to five years in state prison and/or a maximum fine of $50,000. Chirco reportedly injured his back on August 21, 2000, while working as a tile setter for Roma Tile. Chirco submitted a workers’ comp claim with Travelers Property Casualty (Travelers), the company’s workers’ comp carrier.
Chirco continued working for Roma Tile while he received treatment for his alleged back injury until he was put on total temporary disability by his treating physician on August 15, 2002, and consequently began receiving total temporary disability payments from Travelers.
Travelers received information from Roma Tile that Chirco could be performing paid construction work on the side and not reporting the income. Over four days in September 2002, Travelers reportedly observed Chirco performing construction work on a private residence, and subsequent interviews with the homeowner revealed that Chirco was paid approximately $6,780 in cash for this work.
On November 5, 2002, however, Chirco told his examining doctor that he had not worked since leaving Roma Tile, and on January 17, 2003, Chirco gave a sworn deposition wherein he again denied working. To date, Travelers has paid approximately $147,000 on Chirco’s claim, of which an estimated $27,000 would not have been paid if Chirco had been truthful about his activities.
Alexander, if convicted, could face up to three years in state prison and/or a maximum fine of $10,000. Alexander is a licensed automobile insurance broker, but has already reportedly been convicted for insurance fraud in previous cases. He is on probation in both San Joaquin and Sacramento Counties for those convictions.
The present investigation began when Alexander’s employer reported that he was using one of their client’s identifying information on an altered driver license. Consequently, the CDI Legal Division is reviewing Alexander’s license status as well.
Finally, Valdez could face up to five years in state prison and/or a maximum fine of $50,000 in convicted. This case was initiated by a referral from USAA Insurance (USAA) who suspected fraudulent activity in a 2002 automobile insurance claim filed by Valdez. Her policy had been cancelled due to non-payment, but she was involved in an accident after her policy had lapsed.
Valdez reportedly misrepresented the date of her accident to USAA in order to pay for the damage to her car. Valdez later filed a second claim with USAA alleging that her vehicle had been damaged while insured during a hit-and-run collision.