Hawaii Continues Crackdown on Car Insurance Fraud

March 3, 2004

Insurance Fraud Investigators in the Department of Commerce and Consumer Affairs Insurance Division continue to wage a campaign against Hawaii motorists who engage in the illegal activity of insurance fraud.

“Fraud inflates the cost of car insurance for everyone,” said Insurance Commissioner J.P. Schmidt. “Law-abiding drivers should be upset with their neighbors who file false claims.”

During the past six months, attorneys have successfully prosecuted cases against seven individuals:

* Hernani Mercado filed a claim with GEICO and received full compensation for an accident that happened on Aug. 31, 2001. He reportedly did not repair his vehicle, and after scraping a guard rail on the Pali in January of 2003, he reportedly filed another claim in which he tried to get paid a second time for the earlier damage to his vehicle. Mercado was sentenced in September and ordered to pay $ 500 to the general fund, perform 200 hours of community service and pay restitution to GEICO.

* Lisa Faipea had her insurance policy cancelled on Sept. 12, 2002. Two days later, while her car was being driven by another driver, it was involved in an accident. Faipea reportedly authored a false certified mail receipt to support her claim that she had her insurance cancelled in error because she had sent in a postal money order. Investigators found she never purchased the money order. She was sentenced in October.

* Stephen Scheele was also sentenced in October on charges of Insurance Fraud, Attempted Theft and False Reporting to Authorities. Scheele attempted to obtain benefits from State Farm Insurance by reportedly concealing the fact that his vehicle had been damaged in an accident and falsely claiming that his car had been stolen. Before filing his theft claim, Scheele reportedly stripped his vehicle of accessories with a value of $ 3, 900. He then towed it to the parking lot of the Waianae City Mill where it was recovered by police.

* A man who was driving Brandiann Corpus’s car was involved in an accident last year. Corpus had not renewed her insurance policy, but called AIG and obtained coverage immediately upon hearing about the accident. Several hours later she reportedly filed a false insurance claim and reported that the accident had occurred after she had purchased insurance coverage. She was fined $ 1,250 and ordered to repay AIG $ 1,597.

* David Wilson reported his car stolen to Liberty Mutual. He received $ 16,000 in insurance proceeds. The vehicle was recovered two years later. Investigators discovered that Wilson had reportedly arranged for another person to dispose of his vehicle and that his theft claim was fraudulent. In December, Wilson was sentenced to jail. A hearing scheduled for early March will determine the amount of restitution Wilson will pay.

* 65-year-old Marie Nakachi had her car stolen. After it was recovered, she reportedly claimed it had suffered about $3,800 in damage. Investigators found however that Nakachi had reportedly provided false information to AIG Hawaii about the condition of her
vehicle prior to the theft. Nakachi was sentenced for Insurance Fraud and Attempted Theft in December.

* And on Christmas Eve, Shaun Murakami was sentenced for Insurance Fraud. Murakami had reported that he accidentally set his vehicle on fire in the parking lot of a park in Manoa. However, an investigation revealed that Murakami had reportedly intentionally set the fire in an attempt to collect insurance proceeds totaling nearly $9,600.

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