Department of Insurance Coordinates with Law Enforcement to Arrest Suspects in Organized Auto Fraud Ring in $500,000 Operation Dealer’s Choice

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By Brittany Hodgson

In December 2019, investigators from the San Diego County Organized Automobile Insurance Fraud Task Force, which includes investigators from the California Department of Insurance, the San Diego District Attorney’s Office, and California Highway Patrol, arrested several suspects for their involvement in an organized auto fraud ring. According to a press release on December 6, 2019, task force investigators found that the suspects had purchased vehicles at local car auctions that were already damaged, had high mileage, or both for a low dollar amount.  After insuring and registering them, these individuals staged collisions and thefts, and even had the odometer mileages rolled back to increase the value of the vehicles before they were “damaged” or reported stolen, and then filed fraudulent total damage or theft claims to receive payouts from insurance carriers. The task force estimated over $500,000 in fraudulent auto claims over a four year period, involving 12 insurance companies and over 50 vehicles.

Insurance Commissioner Ricardo Lara called the scheme a “bad deal for drivers who have to pay more through higher premiums as a result of insurance fraud.” San Diego District Attorney Summer Stephan also highlighted the impact of insurance fraud on consumers, noting that “[s]tealing from insurance companies hits all of us in the wallet because the loss is passed on to the consumer.”

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