Calif. Crash for Cash Ringleader Arrested

November 25, 2005

California Insurance Commissioner John Garamendi on Wednesday announced the arrest of the suspected ringleader of a major operation that has allegedly staged more than 60 auto collisions over the past 18 months, bilking insurers and consumers out of $2 million to $3 million.

Huntington Park attorney Bernard Laufer, 52, was arrested Tuesday by California Department of Insurance Fraud investigators, the latest break in a 7-month investigation of the case by the Department. Laufer is suspected of filing false claims for members of the collision ring after they caused dangerous crashes with innocent victims. He faces charges of insurance fraud, grand theft and conspiracy.

In April the CDI Fraud Division received a tip that a man named Humberto Carlon, 22, of La Verne, Calif., was recruiting people to participate in staged collisions on various Southern California freeways. Carlon was arrested earlier in the course of the investigation and is currently serving a two-year state prison sentence for his involvement.

During the resulting probe, investigators found evidence of as many as 70 “swoop and squat” type staged collisions allegedly caused by the group, most targeting SUVs or commercial trucks. Such an operation typically involves two cars driven by suspects who box in a victim’s car on a freeway, causing a collision. The scam participants then file fraudulent insurance claims for alleged injuries.

Although none of the victims was seriously injured, the financial consequences forced at least one victim to close his business after his company truck was totaled in a collision.

Further investigation by the CDI investigators led to Laufer, who allegedly purchased the cases from Carlon and filed the fraudulent insurance claims against the victims’ insurance companies. Many of the suspects Carlon recruited included friends and family, who would then allegedly recruit additional suspects and bring them to Carlon. Several suspects were enticed to join the ring at a church bible study group.

To date, 23 suspects have been arrested for their alleged roles in the staged collisions. All will face felony charges of insurance fraud, and in addition the alleged drivers in the collisions could also face charges of assault with a deadly weapon.

“It is reprehensible to put people’s lives at danger in the greedy pursuit of cash,” Garamendi said.

The investigation is being conducted in cooperation with several insurance companies, as well as the National Insurance Crime Bureau. The case is being prosecuted by the Los Angeles County District Attorney’s Office, Auto Insurance Fraud Unit.

Other suspects arrested in connection with the case include: Ontario residents Daniel Hernandez, 26, Karinna Valenzuela, 22, Martha Deniz, 19, Veronica Santillan, 26, and Carlos Meza, 34; Chino residents Sonia Alburto Alvarez, 35, Alberto Espinoza, 29, Jorge Covarrubias Jimenez, 31, Angelina Alverez, 56, Jorge Jimenez, 31, Cesar Salas, 29, and Sofia Hernandez, 34; Riverside residents Juan Cervantex, 24, Maria Gonzalez, 23, Ernesto Navarro, 18, and Armando Gonzalez, 22; South Gate residents Luis Alberto Lopez, 25, and Fernando Ramirez, 30; Lakewood resident Lorena Campos, 21, Bell Gardens resident Bertha Villa, 55, and Pomona resident Veronica Contreras, 26.

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