Criminal Prosecution For Auto Insurance Fraud Continued To Rise: 2 Recent Cases

Up until a few years ago, if someone had filed a false auto insurance claim claiming their car had been hit in an accident – all that usually would have happened is for the insurance claim to be denied. The matter was handled as a civil dispute between the auto owner and his or her insurance carrier except in extreme cases. Those days are over. In these post-Madoff days, any type of fraud is being investigated and prosecuted. Moreover it is being punished more harshly. As an insurance fraud attorney, I review recent cases to see the trends in prosecution and sentencing.

Two cases from Ventura County illustrate what can happen when people make false insurance claims when they are either under financial stress or find themselves uninsured. Like most criminal cases, only a small percentage of insurance fraud is discovered – but when it is discovered, it is being punished harshly to deter others. In both cases, the individuals charged were first-time offenders and ordered to serve jail time for both a misdemeanor and a felony plea (30 to 60 days).

1^st Case – Falsely Reporting That Accident Occurred On A Different Date To Obtain Insurance

On December 9, 2009, Lauro Aguilar-Martinez of Glendale, California was sentenced after pleading guilty to misdemeanor auto insurance fraud. The facts alleged were as follows. On June 13, 2009, Mr. Aguilar-Martinez rear-ended a vehicle on Interstate Highway 5 in Los Angeles. At the time, Mr. Aguilar-Martinez was not insured.

He decided to become insured. Thus, on June 19, 2009, he purchased auto insurance from Alliance United Insurance Company in Ventura. On June 23, 2009, Aguilar-Martinez contacted the Alliance United claims department and made a claim for the June 13 rear-end collision. However, he falsely reported that the collision occurred on June 23, 2009, after he was insured.

Mr. Aguilar-Martinez was placed on probation for three years and ordered to serve 30 days in the Ventura County jail.

The new aggressiveness in prosecution is also evidenced by the fact that in the first case, the accident at issue occurred in Los Angeles but the Los Angeles County resident purchased auto insurance from a company in Ventura County while allowed Venture to prosecute the case.

2^nd Case – False Report of Stolen Truck

Last month, on December 9, 2009, Hidalgo Lopez Gomez of Oxnard was sentenced to serve 60 days in the Ventura County jail after having pleaded guilty to felony auto insurance fraud. Mr. Gomez was placed on formal probation for three years and was ordered to pay Infinity Insurance $3,547 in restitution prior to his sentencing.

The facts in this case are as follows. On January 29, 2009, at 5:00 a.m., Mr. Lopez contacted the Oxnard Police Department and reported his 2008 Dodge truck was stolen after he went inside a market on Saviers Road. Mr. Lopez claimed he left his truck running as he went inside the market to buy coffee. When he returned outside, his truck was gone. Later that same day, Mr. Lopez contacted Infinity Insurance and made a claim for the theft.

Mr. Lopez's claim was assigned to Infinity's Special Investigations Unit (SIU). An SIU investigator made an inquiry with the Department of Homeland Security and learned the license plate readers at the San Ysidro border crossing recorded Lopez's truck traveling into Mexico at 3:37 a.m. on January 29, 2009. There was no record of the truck returning to the United States.

Since Mr. Lopez's account of how and when his vehicle was “stolen” did not add up, Infinity Insurance referred the case to the California Department of Insurance, Fraud Division. After additional investigation by fraud detectives, Mr. Lopez was subsequently arrested and charged with felony auto insurance fraud.

Any questions or comments regarding this post or your own situation should be directed to: tgreen@greenassoc.com or 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California and focuses her practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. She has significant experience in defending individuals, licensed professionals and businesses in insurance fraud investigations. The firm website is: http://www.greenassoc.com/