A group of family and friends are facing the consequences for taking part in an auto insurance scam ring that was in operation in California for at least four years, according to the California Department of Insurance (CDI), which reported 23 people are facing felony counts of insurance fraud and conspiracy for their roles.
Gerson Castro Martinez, the alleged mastermind behind the criminal enterprise, was arrested late last month on eight felony counts. CDI reported Martinez and his crew netted more than $174,000, filed at least 33 claims and used around 40 different vehicles, including some that were already damaged at the time of purchase.
The crew’s MO was to stage an accident and make a claim on a policy that was purchased using a fake identity. The crew would also stage accidents between two parties that knew each other, but acted as strangers to collect on the bogus losses, according to the state’s insurance department.
The fraudster’s scheme began to unravel after Rene Murillo Hernandez of Santa Clara said he hit a parked vehicle after being struck by another car that fled the scene. Murillo then left a note, which included his insurance information, on the parked vehicle he hit. However, the owner of that car was another member of the fraud ring, who filed an insurance claim. Investigations into that claim uncovered the damages were inconsistent with two cars colliding, according to CDI.
Additional research into the claim uncovered that the damages sustained in the incident were also reported in a prior loss while the car had a different owner. Further, a number of similar claims used the PO Box address, which the fraudsters said is where they housed their vehicles.
“This alleged auto insurance fraud ring is a prime example of the type of fraud that increases premium prices for all California drivers,” Ricardo Lara, California insurance commissioner, said in a release.
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