Fraud News: Crash and Buy Scheme, Workers’ Comp Scammers Busted

April 12, 2017
California Woman Convicted of ‘Crash and Buy’ Auto Insurance Fraud

Yolo County District Attorney Jeff Reisig announced that on March 23, 2017, 32-year-old Alicia Hernandez of West Sacramento was convicted of filing a false insurance claim and providing false statements of her traffic collision on March 23, 2017. The conviction resulted from a joint investigation between the District Attorney’s Office and the California Department of Insurance.

On June 2, 2015, while driving her Nissan Maxima, Hernandez’s involved in a traffic collision in West Sacramento, CA. The West Sacramento Police Department responded to the scene of the collision and took a collision report. At the time of the collision, Hernandez did not have auto insurance coverage for her car. Approximately two hours after the collision she purchased an automobile insurance policy from Esurance. During the phone call with Esurance, Hernandez made false statements regarding the collision in an effort to obtain coverage from her insurance claim.. This strategy is often referred to as a “crash and buy” in the insurance industry.

Hernandez later provided a recorded statement to Esurance stating that she purchased the policy a few hours before the collision. However, the insurance company already had the police report from the West Sacramento Police Department and the recorded conversation from when Hernandez attempted to purchase her automobile insurance. The investigation showed Hernandez’ version of the events, including her timeline, were suspicious and inconsistent.

Hernandez pled no contest to misdemeanor insurance fraud. Yolo County Superior Court Judge Daniel MaGuire placed her on three year’s summary probation and sentenced her to 10 days in county jail. Hernandez also pled no contest to driving on a suspended license and was sentenced to five days in county jail.

Purchasing an insurance policy after a collision has occurred and then reporting that a collision took place after the inception of the policy is a crime. Insurance Fraud is the most costly white-collar crime in America behind tax evasion. Insurance industry studies show that about ten percent or more of property/casualty claims are fraudulent. Insurance fraud costs Americans billions of dollars each year. District Attorney Jeff Reisig stated that, “Everyone pays substantially higher insurance premiums because of the crooks who commit insurance fraud. We are committed to investigating and prosecuting this type of fraud in our community.”

Ohio Siblings to Reimburse Over $6000 for Taking Dead Dad’s Workers’ Comp Benefits

A judge has ordered a Fulton County sister and brother to reimburse $6,657 to the Ohio Bureau of Workers’ Compensation for taking their father’s BWC benefits in the immediate months following his death in 2014.

Cecilia Williams pleaded guilty Dec. 20 in the Fulton County Court of Common Pleas to a fifth-degree felony count of workers’ compensation fraud. She was sentenced Feb. 27 to two years of community control and a suspended jail term of seven months. She also must take a theft education course.

Her brother, James Miller was sentenced March 17 to a suspended sentence of six months in jail and a $100 fine after pleading guilty to attempted workers compensation fraud, a first-degree misdemeanor. Both have already paid restitution to BWC.

BWC’s Special Investigations Department learned in 2014 that Williams’ and Miller’s father had passed away on March 15 that year, but no one had reported his death or returned his BWC cash benefits to the agency. Agents later discovered that a total of $6,657 had been withdrawn from ATMs between the dates of March 27, 2014, and July 17, 2014.

Williams admitted to agents that she withdrew the funds using her deceased father’s debit card for personal monetary gain and then provided half of the money to her brother.

Jail for Washington Man Who Used Fake Name in $114K Workers’ Comp Scam

A drywall worker who admitted stealing workers’ compensation benefits and then evaded authorities for a year must serve 60 days in jail.

Pablo Francisco Castillo Murguia of Auburn was sentenced in Thurston County on Wednesday for felony first-degree theft. Superior Court Judge Chris Lanese also ordered the 40-year-old to repay $114,752 for cash benefits along with medical and vocational services he wrongfully received over more than five years.

The Washington Attorney General prosecuted the case based on an investigation by the Washington State Department of Labor & Industries (L&I).

Castillo Murguia pleaded guilty in March 2016, but he failed to appear for sentencing later that month. The court issued a warrant for his arrest, yet he remained on the loose for a year. Last month, he was arrested by an officer who noticed the warrant while serving him with an order in an unrelated case.

The case started when Murguia fell from walking stilts as he taped drywall at a Seattle job site, injuring his right knee. He filed a workplace injury claim, calling himself Juan Pedro Castillo.

Treating physicians confirmed that his injury prevented him from working, allowing him to receive cash payments to make up for part of his lost wages. In addition, Castillo Murguia repeatedly stated on official forms that he couldn’t work, and wasn’t working, due to the on-the-job injury.

L&I’s investigation revealed that he not only used a fake name in the claim, but was working while receiving workers’ compensation benefits, charging papers said.

On Aug. 30, 2012, he reached a settlement with L&I and received a final lump sum of nearly $7,700 for additional vocational training necessitated by his knee injury. L&I closed his case.

Within three weeks, Murguia filed a claim for another workplace injury. He claimed he injured his left leg while working as a drywall taper on Bainbridge Island on Sept. 7, 2012 — just eight days after his original case closed. This time he filed under his real name.

L&I was tipped off to the ruse by a Spanish-language interpreter, who had interpreted for Murguia on his first claim. When he asked her to interpret on his second claim, she learned he was using a different name.

Along with L&I’s work on this case, charging papers show the Washington Department of Licensing used its facial recognition system to determine that Murguia had fraudulently obtained two state-issued identification cards and a driver’s license under fake names. In early 2012, Licensing cancelled the identification cards and suspended the driver’s license with the false names.

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