California Department of Insurance Arrests Suspects In San Diego Organized Auto Fraud Ring In $500,000 Operation Dealer’s Choice
By Lonce Lamonte and the California Department of Insurance - December 6, 2019
Investigators from the California Department of Insurance, San Diego County District Attorney’s Office, and the California Highway Patrol arrested four suspects yesterday for alleged involvement in an organized auto fraud ring where dealers purchased damaged vehicles and then filed inflated claims and even staged thefts — among other schemes — costing insurers a $500,000 loss. In total 10 suspects have been charged in this joint task force investigation dubbed Operation Dealer’s Choice.
The four suspects arrested yesterday will be arraigned today at 1:30 pm in Department 101 of the Central Courthouse.
Operation Dealer’s Choice was initiated after the San Diego District Attorney’s Office received a consumer call claiming the ring was purchasing vehicles at local auto auctions, and after insuring and registering them, filing fraudulent total damage or theft claims to receive unearned payouts from insurance carriers. The case was investigated by the San Diego County Organized Automobile Insurance Fraud Task Force made up of the California Department of Insurance, San Diego District Attorney’s Office and California Highway Patrol.
“The alleged scam we uncovered in Operation Dealer’s Choice was a bad deal for drivers who have to pay more through higher premiums as a result of insurance fraud,” said Insurance Commissioner Ricardo Lara. “The hard work of our multi-agency task force stopped this alleged organized insurance crime ring that stole more than $500,000 in fraudulent auto claims.”
The investigation determined the ring purchased vehicles at auction that were already damaged, had high mileage, or both, at a significantly low dollar amount. Once the vehicle was purchased, registered and insured by a carrier, the suspects filed a total damage or total theft claim and the ring shared the profits. Investigators discovered 35 possible fraudulent auto insurance claims were filed over a 4-year period. Approximately 56 vehicles were used by the ring.
“Stealing from insurance companies hits all of us in the wallet because the loss is passed on to the consumer,” District Attorney Summer Stephan said. “These defendants carried on their criminal enterprise for years until the joint task force’s outstanding work stopped them in their tracks.”
Numerous vehicles purchased by the suspects in this case had the vehicles’ odometer mileages “rolled back” in order to increase the value of the vehicle before it was damaged or reported stolen. The remaining vehicles had significant damage prior to being insured unbeknownst to the carrier, or are believed to be damaged by the group after being insured.
The ring victimized 12 insurance carriers including Nationwide, Stonewood, USAA, California Casualty, Allstate, State Farm, Liberty Mutual, Esurance, GEICO, Kemper, Wawanesa, and AAA. The dollar loss estimate for this case is in excess of $500,000 at this time.
Suspects in this case used various schemes including incepting policies on a vehicle that had pre-existing damage, filing claims shortly after the policy’s date of inception, then letting the policy lapse shortly after collecting a check for their loss due to non-payment. They also filed suspected “staged collisions” in which they would purposely damage vehicles to the point of a “total loss” to collect an insurance claim check for the damage. Suspects also “staged thefts” in which they got paid for the theft of their vehicle after they, themselves, made the vehicle disappear.
List of suspects in custody:
Michael Cusi, 32, of San Diego
Jessica Herrera, 36, of Imperial Beach
Mylipsa Santos, 23, of San Diego
Daniel Santos, 24, San Diego
List of additional suspects:
Luis Cardona Jr., 26, of National City
Francisco Javier Rodriguez, 33, of Chula Vista
Jesus Herrera, 34, of Spring Valley
Betsy Guadalupe Matteoti, 35, of San Diego
Ramon De Jesus Hernandez, 56, of San Diego
Felipe Cardona Villareal, 25, of Tampa, Florida
lonce@adjustercom.com; Lonce Lamonte, editor and journalist of adjustercom; in cooperation with the California Department of Insurance
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