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California fraud cases closed

The book is closed on the 53 California repair shop owners who were charged with fraud in a wide-ranging sting conducted in 2010 by the Orange County District Attorney’s (OCDA) office.

The OCDA conducted 152 undercover operations in Orange County from January to May 2010, targeting shops that had been identified by the California Bureau of Automotive Repair (BAR) as having consumer complaints filed against them in the last three years. Additional shops were referred by the National Insurance Crime Bureau. Some independent auto repair facilities that were not registered with the BAR also were targeted.

Of the 53 arrested, 36 accepted an offer from the OCDA to have their charges reduced to a misdemeanor in exchange for paying a $1,000 fine and attending a fraud prevention class held by the California BAR and the OCDA's office. Provided they complied with the terms of the deal, their cases have been dismissed. Two cases destined for jury trails were dismissed by the court. The repairers originally faced felony fraud charges that carried a maximum sentence of five years in state prison.

Another dozen or so defendants held out and had their charges dismissed on the merits. One shop owner took his case to a jury and won.

In the sting operation, an OCDA investigator would bring a vehicle (either a Ford Expedition or Mercedes Benz) to the shop asking for a written estimate to repair damage caused by a recent collision. During the inspection, the undercover investigator would note that the vehicle also had some existing damage (either a missing bumper or a damaged fender) and ask if those repairs could be added to the estimate. They would then ask that the estimate be sent to an out-of-state insurance company called Mendota.

While the majority of repairers targeted in the sting declined to provide such an estimate, the OCDA says that those charged had agreed to provide an estimate with the knowledge that it would be used to commit insurance fraud.

Only one case went to a jury trial and shop owner Mike Rocha of Placentia Auto Body won that case. It cost him about $5,000 and much time away from his shop. Despite winning the case, Rocha has put up a sign in his shop telling customers he will not provide a written estimate without a claim number, he will not waive deductibles and that unrelated damage will not be included in the estimate.

Reader comments about this article are pouring in and they are all over the map. Several say OCDA should investigate insurers due to the harm they inflict on customers with their direct repair programs. One reader likened the OCDA sting to a Nazi-type operation while another wants all charged shops to lose their licenses and have to pay for the substantial cost of the investigation.

The comments appear at the bottom of each of the five pages of the article.

 

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