California Auto Fraud Perpetrator Ordered to Pay $400,000 in Restitution

June 18, 2008

A fraud perpetrator has pled guilty to 11 felony counts including grand theft and insurance fraud in El Cajon, Calif, the California Department of Insurance announced. On June 11, Tam Lai, aka Timmy Lai, of Louisville, Ky., was sentenced to five years in prison and ordered to pay $415,292.96 in restitution to eight insurance companies.

In December 2004, the Auto Club of Southern California notified CDI that it suspected a group of individuals were involved in filing fraudulent claims, CDI said. The insurer discovered that duplicate claims were being filed for the same vehicles with the same damages, and each had a similar story. The insurer also observed that all vehicle repairs were completed by the same body shop, Marshall Auto Body in El Cajon. Shortly after receiving the tip, CDI opened an investigation, which involved more than 50 auto insurance claims and 14 different vehicles.

CDI said the investigation revealed that multiple claims were filed with various insurance companies. Most of the claims came from Marshall Auto Body. Lai was the owner of the body shop, and allegedly orchestrated the fraudulent claims-filing scheme. Lai and his accomplices purportedly purchased vehicles, obtained insurance policies on the vehicles, and staged non-injury accidents with them. Lai and his accomplices would then allegedly file multiple claims with insurance companies. They commonly reported that the insured was traveling on a two-lane road in San Diego County when they were involved in a hit and run collision, or that they hit a fixed object. Lai and his accomplices endorsed and deposited claims checks from insurance companies into multiple different bank accounts in an attempt to avoid detection.

The investigation also revealed that insurance claims were pursued by Lai and his accomplices until insurance companies began to question the legitimacy of the claim or opened an investigation. When this occurred, the questionable claim was withdrawn.

This investigation was conducted by the California Department of Insurance Fraud Division, California Highway Patrol, San Diego County District Attorney’s Office and the National Insurance Crime Bureau. This case was prosecuted by the San Diego County District Attorney’s Office.

Source: CDI

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