“Paper” Chase Leads to Arrests

The Organized Auto Fraud Interdiction Task Force, comprised of investigators from the CDI Criminal Investigations Branch’s Fraud Division, the California Highway Patrol, and the National Insurance Crime Bureau, announced the execution of nine arrest warrants and nine search warrants in Los Angeles, North Hollywood and Glendale. USAA Insurance Company assisted the task force during the investigation.

The search warrants included two chiropractic clinics and one attorney’s office. Thirteen individuals were charged for their alleged involvement in an automobile insurance fraud ring. The Los Angeles District Attorney’s Office, Auto Insurance Fraud Unit is prosecuting the case.

The 13 suspects were each charged with a felony violation of insurance fraud. The two primary suspects, Jose Morales and another co-conspirator who, at the time charges were brought in November remained at large, were each charged with 13 counts of felony insurance fraud. Bail for each was set at $1,000,000 each. Eight of the suspects were held on $25,000 bail.

An investigation was initiated upon receipt of information on a group of individuals staging “paper” accidents in the Los Angeles area.

Task Force undercover investigators who infiltrated the ring maintain that Morales recruited insured and at-fault drivers for alleged collisions. The investigators also stated that Morales would then cause damage to the vehicles of his recruits and introduce the participants to his partner, who was responsible for recruiting the “claimant” participants for the alleged collisions.

Investigators claimed Morales and his partner provided both parties with scripts containing the “details” of the accident in order to submit their claims with their respective insurance companies.

During the course of the investigation, it was established that Morales and his partner allegedly orchestrated specific staged collisions. After they orchestrated the crashes, they utilized the services of an attorney to represent claimants of the alleged accidents.

Additionally, the involved claimants were sent to two chiropractic clinics to receive treatment for their alleged soft tissue injuries. Investigators claimed fraudulent medical billings were ultimately submitted to the insurance companies for payment.

In one particular case, an insurance company paid out $25,000 for medical bills from a staged collision.

Topics Fraud