Following an investigation spanning two years, dozens of witness interviews,and examination of thousands of documents, a Calif. Grand Jury hasindicted 22 suspects on more than 100 felony counts. CaliforniaInsurance Commissioner Dave Jones reported that the indictments were handed down by aContra Costa County, Calif. Grand Jury on Sept. 22, 2011, notingthat bail for the suspects had been collectively set at$18,650,000.

Investigators are still unravelling the extent of damageinflicted to the insurance industry as a result of the elaboratescheme, and additional suspects may be detained, pending furtherdevelopments.

The current loss projection, which encompasses both tangible andpotential damage amounts, ranges between $300,000 and $500,000.

Commissioner Jones said Geico, Allstate, State Farm, Balboa,Progressive, Farmers, American Bankers, 21st Century, Travelers,and Unitrin Insurance Carriers, as well as the National InsuranceCrime Bureau (NICB) provided crucial information to further theefforts of CDI fraud division detectives and the Calif. HighwayPatrol.

In July 2009, CDI fraud detectives began a probe in the SanFrancisco Bay area, focusing on a group of subjects who weresubmitting suspicious insurance claims. The claims in questionrepresented a possible smorgasbord of criminal acts and involvedvehicle thefts; theft of personal property from vehicles andresidences; traffic collisions; personal injury; wage loss; andvandalism. The subjects had filed police reports and submitteddocuments to various insurers to try to corroborate the claims.

During the course of the investigation, thousands of documentswere obtained and examined to reveal that the group appeared to beinvolved in several insurance fraud schemes. One scheme involvedthe purchase of jewelry, high-end electronics, and othermerchandise. Detectives suspected that once purchased, items werequickly returned to the retailer, but that sales receipts wereretained so group members could share the receipts to later presentthem as evidence of property ownership in numerous insuranceclaims. Authorities also believe that in certain cases, receiptswere altered and used several times by different subjects whenfiling claims. Other plots entailed signed declarations stating thesubjects “owned” property believed to have been stolen. Thesuspects would then photograph themselves wearing these items tokeep the stream of fishy claims flowing.

Moreover, investigators found that subjects may have filedinsurance loss claims for alleged traffic collisions, stolenvehicles, and vehicle vandalisms. Allegedly, the incidentsrepeatedly involved the same exact suspects with the same damage totheir vehicles. In select cases, the members subsequently submittedinjury claims and professed to have lost wages because of thecollisions, despite evidence to the contrary.

The suspects are charged with more than 100 felony counts forviolating insurance code, grand theft, and burglary. Aftercorralling subjects in the Bay area, authorities took anout-of-state suspect into custody, who will face extradition andthen prosecution by the Contra Costa County district attorney. Thecriminal indictment is the largest of its kind in the Calif.county's history. “The sheer magnitude of this case demonstratesthe extreme degree of conspiratorial lengths these suspectscolluded to perpetrate,” Jones said.