Authorities have arrested two men in connection with allegations of auto insurance scams at eight Monterey County stereo and tire/wheel shops. John Edward Close, of Gonzales, Calif., and Antonio Jaramillo Fonseca, of Greenfield, Calif., were arrested August 18 and booked into the Monterey county jail on one felony count each of automobile insurance fraud. Fonseca also faces a single misdemeanor charge for not carrying workers’ compensation insurance.
The arrests are the result of an undercover investigation of the shops, conducted by the Monterey County Sheriff’s Department’s Multi-agency Detail for Commercial Auto Theft (MADCAT), the California Department of Insurance’s Fraud Division and the Monterey County District Attorney’s Office. If convicted, each suspect faces up to five years in state prison and a maximum fine of $50,000. The Monterey County District Attorney’s Office is prosecuting the case.
The undercover investigation began after MADCAT received information that stereo and tire/wheel shops were providing fictitious receipts for use in insurance fraud. During the course of the investigation, Close, manager of R.A.C. Muffler & Tire in Gonzales, allegedly provided a fictitious receipt for tires and wheels in the amount of $1,567. Fonseca, owner of Tony’s Stereo & Hydraulics in Greenville, allegedly provided a fictitious receipt for a stereo system in the amount of $1,439. Fonseca allegedly had his employee wire the undercover officer’s vehicle to make it appear as if the stereo had been stolen.
In this scam, a policyholder would report to their automobile insurance carrier that the stereo and/or tire and wheels were stolen from the vehicle. The policyholder would then obtain a fictitious receipt from the stereo or tire and wheel shop, which would be submitted to the carrier for reimbursement for parts that were actually never purchased. Upon receiving “reimbursement” from the insurance company, the policyholder would either purchase the item or pocket the money.
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