A recent sting operation executed by several northern California counties has nabbed dozens of fraudsters and will likely deter others from ever committing such a crime.

Insurance Commissioner Steve Poizner announced that, beginning January 28, 2009, the California Department of Insurance's Fraud Division (CDI) and investigators from the district attorney offices of El Dorado, Placer, Sacramento, San Joaquin, Stanislaus, and Yolo executed nearly 40 arrest warrants during "Operation Cover Me."

This operation investigated alleged auto insurance fraud over a two-month period. The end result was 28 cases with 38 suspects. To date, authorities have arrested 28 suspects and issued notices to five others to appear for arraignment. There are also outstanding arrest warrants on five remaining suspects.

The district attorney offices of the respective counties are prosecuting these cases. Insurance fraud, a violation of California Penal Code ?550, is a felony. If convicted, suspects face up to five years in prison and a maximum $50,000 fine on each count.

"Insurance fraud is not victimless; it is ultimately paid for by other California consumers," said Commissioner Poizner. "In these tough economic times, the temptation to commit insurance fraud may be great but the lesson could not be simpler: Do not do it; it is not worth it."

CDI initiated Operation Cover Me after detecting a rise in suspected fraudulent cases in which a claimant is either uninsured or inadequately insured, at the time of a loss. The claimant(s) subsequently obtains an insurance policy, and then allegedly lies about the date, time, or circumstances of the loss so as to gain benefits to which they are not legally entitled. This specific operation focused on three types of automobile fraud scenarios:

?Suspects were involved in automobile accidents but obtained insurance coverage after the fact.

?Suspects were victims of auto theft but purchased coverage after that theft.

?Suspects did not have insurance coverage for certain excluded drivers on the policies, but these excluded drivers are involved in accidents.

In several of the cases, the suspects allegedly conspired with or solicited friends, family members, and other drivers involved in the accident to help perpetrate the fraud.

Allegedly fraudulent claims were paid up to $9,800. Potential losses in other claims were approximately $35,000. Among the insurance companies allegedly defrauded were 21st Century Insurance Company, Amco Insurance Company, Anchor General Insurance Company, California State Automobile Association, Progressive Advanced Insurance Company, and numerous others.

Interested in more fraud news and in-depth articles? Head over to Claims' fraud channel for more information.

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