Tuesday, June 9, 2009

Vehicle Insurance Fraud Cases Increase - What To Do If You Are Under Investigation

In April of 2009, we wrote about the increase in vehicle insurance fraud due to the economic downturn.

This week's Los Angeles Times has an article on this same issue entitled "Vehicle Fraud Cases Heat Up Amid Economic Downturn." See:

Here is a recent criminal case that illustrates the type of mistakes that desperate people are making when they are under financial stress and want to cut down on their automotive costs.

On May 28, 2009, San Bernardino County District Attorney investigators arrested Ted Chavez Jr., of Fontana, for perjury, insurance fraud and disposing of insured property. The criminal complaint alleges that in October 2007, Chavez claimed that he drove his 2007 Chevy Avalanche to a swap meet in Fontana. He alleged that he parked and locked his vehicle before going shopping. Chavez claimed that when he came back to his vehicle a couple hours later, the Chevy was gone. He filed an auto theft report with the Fontana Police Department and a theft claim with Infinity insurance company.

During a check of vehicles passing through the border, it was discovered that Chavez' Avalanche crossed into Mexico at the San Ysidro crossing about 12 hours before he claimed to have driven it to the swap meet. The District Attorney's Office filed several felony charges against Chavez. Chavez's bail was set at $105,000. A criminal complaint contains only allegations against an individual and Chavez must be presumed innocent unless and until proven guilty.

Attorney Commentary: First, as noted in our prior post, the special units at the county district attorney's office are funded by a surcharge on vehicle insurance premiums which was created by legislation. Thus, there is funding to prosecute these cases and even relatively "small" cases will often result in charges.

Second, the insurance companies have their own special investigation units (SIU) with investigators and attorneys which conduct their own investigations. They conduct their own investigation and put together a package which is then referred for criminal prosecution. If an insured vehicle owner has made some bad decisions, the time to turn around the investigation if possible is while the case is still at the insurance company or its SIU unit.

Third, if you are dealing with interviews with the insurance company and it is a suspicious claim, it is time to hire an attorney. For example, if you submit an insurance claim and the company suspects fraud, you will receive a letter or request for an “Examination Under Oath” or EUO under the penalty of perjury. An EUO is similar to a deposition since there is a court reporter present taking down your statements. This can be used for future criminal prosecution.

If you receive a letter for an EUO, it is time to hire an attorney experienced in insurance fraud to represent you. The earlier you seek to engage in damage control, the better. These cases are not usually going to get better, but will get worse especially if you are making inconsistent statements or providing information that is inconsistent with the actual physical evidence.
The best time to prevent a case from being filed is early on. If you can save being charged with insurance fraud, it will be a worthwhile investment. Once a case is filed, it is much more difficult to obtain dismissals or acquittals -- especially if you have given already given a damaging EUO to the insurance company.

Any questions or comments should be directed to: tgreen@greenassoc.com 
Tracy Green is a principal at Green and Associates, Attorneys at Law, in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. The firm's attorneys have represented numerous individuals and businesses in insurance fraud investigations and criminal filings.


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