Nearly Dozen Arrested for $2 Million California Insurance Fraud Scam

April 4, 2008

California Insurance Commissioner Steve Poizner announced the arrests of nearly one dozen alleged Bay Area fraud perpetrators. Eleven subjects were arrested over the past week on numerous felony counts including insurance fraud, identity theft, possession of stolen property and filing a false tax return. Wireless phone dealers, employees and customers were arrested for their purported involvement in a $2 million insurance scam. the Department of Insurance said.

The California Department of Insurance (CDI) Fraud Division, with assistance from the California Highway Patrol and the Santa Clara County District Attorney’s Office, launched investigations into several Bay Area cellular telephone stores in 2005 after insurance administrator Asurion Corp. (previously lock/line) reported suspected fraudulent claims. CDI said its investigation revealed that Nikki Tang, 29, and Bao Vu Ha, 36, both of San Jose, Calif., the owners of Streetel One in San Jose, were engaging in dealer fraud. The investigation further revealed that store employee Xuan Tran, 50, and former store employee Natalie Huynh, 24, both of San Jose, also allegedly engaged in multiple counts of insurance fraud. Streetel One customers Douglas Duong, 40, and Khang Truong, 24, both of San Jose, were also arrested for their alleged involvement in insurance fraud.

Asurion Corp. administers wireless insurance protection plans which provide coverage for lost, stolen or damaged wireless phones. The administrator provides a replacement phone when an insurance claim is filed and approved.

Dealer fraud occurs when a customer purchases a policy on a wireless phone to cover against loss, theft or damage. After selling a wireless phone to a customer, a store employee, associate, or owner will file a claim with the insurance company for a lost or stolen phone. After the insurance company sends a replacement cellular phone, the dealer sells or gives away the replacement phone free to a new customer. CDI said this scheme is often repeated on new wireless phone accounts, without the original customer’s knowledge that an insurance claim was made on his or her account.

CDI’s said its investigation uncovered approximately $2 million worth of replacement wireless phones that were shipped out by Asurion as a result of this fraud scheme. This investigation continues, and CDI said it expects to make more arrests.

The CDI said the investigation also revealed that Trina Nguyen, 25, of San Jose, former owner of EZ Wireless in San Jose was also allegedly involved in dealer fraud. Former employees of EZ Wireless, Gigi Nguyen, 32, and Jordan Pham, 35, both of San Jose were also arrested for their alleged involvement in insurance fraud, possession of stolen property and identity theft.

It was further discovered through the CDI investigation that Travis Tiet, 43, his brother Vincent Tiet, 45, and sisters Muoi Tiet, 51, and Khanh Tiet, 54, all of Oakland, were allegedly involved in multiple counts of insurance fraud and possession of stolen property. The Tiets owned and operated the now closed Voicetel Wireless and V-Wireless stores in San Jose, in addition to the Globotel cellular telephone store, currently known as V-Wireless in Oakland. Three of the siblings were arrested in Alameda County on April 2, while Khanh Tiet remains outstanding.

The Santa Clara County District Attorney’s Office is prosecuting this case.

Source: CDI

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