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The Fraud Report

7 CA Men Indicted for Staged Crash Ring

by FraudReport 5. October 2015 11:27

Seven California men were recently indicted by a federal grand jury for charges related to a staged crash ring, which investigators say brought in over $1 million in fraudulently obtained insurance payouts.

According to the indictment and the Turlock Journal, those charged with mail fraud and conspiracy to commit mail fraud are Juan Ortiz Rivas, 38; Oscar Diaz Landa, 45; Victor Hugo Soriano-Villafan, 25; Liobigildo Vargas, 45; Juan Marquez Cadenas, 29; Cristopher Santiago Sanchez-Becerra, 31; and Alfonso Apu, 47. Landa, Sanchez-Becerra, and Apu were arrested at their homes on September 15th and Vargas was arrested at his business, Vargas Auto Body. Soriano-Villafan was arrested in Las Vegas and arraigned in U.S. District Court in Fresno.

A federal grand jury returned the sealed indictment on August 27th and it was unsealed after the arrests.

The indictment accuses the men of defrauding insurance companies of an estimated $1.2 million between October 2011 and August 2014 by staging dozens of car accidents and filing false claims.

The indictment also states that in each staged accident, the defendants damaged two or three vehicles and caused about $5 – $10 thousand in damage to each vehicle. Then, after each “accident,” all parties involved would submit a similar story to an insurer, along with aliases, false identities, and false addresses. During the collision, the defendants usually used different vehicles, which they obtained using false identities to both register the vehicles with the DMV and obtain insurance on the vehicles.

Investigators say the men were able to continue the scam by recruiting new participants. Those new individuals would allow their vehicles to be damaged in the crashes and then submit their own claims off of instructions from the defendants about which cover story to use.

The defendants also often repaired the recruited individual’s vehicles, usually with less-than-complete repair work, for a fee that was less than the payment from an insurance company.

If convicted, each defendant could face a maximum of 20 years in prison and a $250,000 fine on each count of the indictment.

This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the California Department of Insurance, Fraud Division. 

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Categories: Staged Accidents

Woman Charged with Falsifying over $500,000 in Cancer Treatments

by FraudReport 24. September 2015 07:14

A 60-year-old Pennsylvania woman was recently charged with filing false insurance claims. Over the course of 2 years, she allegedly filed over $130,000 in claims to Allstate Insurance, stating that she and her husband were undergoing expensive cancer treatments.

According to,Detectives Timothy Perkins and Eric Landamia began investigating Cynthia Clarey back in August after they got information from Allstate Benefits, which was doing business as American Heritage Life Insurance Company. The company became suspicious that Clarey was lying to them.

Back in 2011, Clarey took out a cancer policy for her and her husband, who was not charged with any crime. Clarey’s first claim on the policy was filed in February of 2013. According to court papers, she stated her husband had prostate cancer and was undergoing treatment.

Various claims were paid out, until Allstate stopped paying in June 2014. At that time, they had requested medical records from the hospital so they could continue making payments. They never received consent to obtain the records, but also never got any protest from Clarey when they stopped paying for her husband’s alleged treatments. Instead, just a month after Allstate stopped paying for her husband’s alleged treatments, authorities say Clarey herself filed a claim and said she was diagnosed with cancer.

Detectives said several claims were filed with forged paperwork over the following months. An insurance claims examiner also investigated info from Middletown and Yardley medical practices, which Clarey said she was receiving treatment from.

“Both medical providers indicated that the documents pertaining to their respective practices were not created by them, and that no such treatments occurred at their respective facilities,” according to court papers. 

Detectives noted, “Your Affiants reviewed the submissions received by Allstate from Cynthia Clarey regarding the alleged treatments received by both she and her husband. The words ‘receipts’ and ‘adjustments’ are misspelled on several documents as ‘receits’ and ‘adjustents,’ respectively. Other documents were found to have P.O. boxes, zip codes and telephone numbers assigned to medical providers that were incorrect.” 

From February 2013 to December 2014, court papers state that the investigation uncovered that Clarey was paid $134,990 for claims she filed. Over the total length of the alleged fraud, Clarey reportedly submitted 462 claims totaling $503,213.

Clarey admitted during an interview with detectives last month that “she submitted these false claims in order to obtain money to pay bills, as she claimed to be suffering from financial hardship due to her husband’s medical bills and other expenses,” according to court papers. It was not immediately clear what condition prompted Clarey’s husband to have mounting medical bills. 

She also allegedly admitted that she never had cancer and that her husband was never treated for cancer.

Clarey was arraigned on charges of fraud, theft by deception, forgery and identity theft. She was released on $100,000 unsecured bail.

The investigation was funded by a grant, overseen by Assistant District Attorney Gregg Shore, from the Pennsylvania Insurance Fraud Prevention Authority.

Just remember: All individuals are presumed innocent until proven guilty.

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Categories: Scandalous Schemes