Filed Under:Claims, Investigative & Forensics

Featured Fraud: Swindling in La-La Land

After recklessly submitting fraudulent insurance claims to multiple insurers, one Los Angeles-area attorney has now been sentenced to formal probation and ordered to pay hundreds of thousands of dollars in restitution.

Between 2003 and 2007, Susana Ragos Chung, 60, participated in a sophisticated organized auto fraud crime ring. The ring was initially discovered in 2004 by the California Department of Insurance (CDI) Urban Auto Fraud Task Force in the fraud division of its Benicia Regional Office, which initiated an investigation known as “Phantom Menace” into organized auto insurance fraud in the Bay Area in 2003.

Members of the task force went undercover in November of 2004 and were solicited to participate in staged collisions by a variety of law offices, including one owned and operated by Chung. Chung’s participation included submitting claims for suspects staging collisions for profit and representing “injured” claimants. Many of these “claimants,” however, had never met Chung or even knew that they had an attorney.

The efforts of the task force have led to the conviction of nearly 100 people, including 90 staged collision participants and three chiropractors. Many of the participants admitted that no accident had ever actually occurred.

Chung has agreed to place herself on inactive status with the California State Bar as the investigation continues, from which disbarment may result. She must pay $117,561 in restitution to insurance companies and $235,123 to the state restitution fund, as well as serve five years of formal probation.

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