Insurance fraud through false reports has become more
common.
Another player in Wednesday’s raids that cracked down on auto theft, drug dealing and gun running was the California Department of Insurance.
Laurel Robinson, chief investigator for the Department of Insurance’s fraud bureau in San Jose, said insurance fraud through false stolen-car reports has become a common practice.
Robinson said a criminal will sell a car to an unsuspecting buyer and then report it stolen to claim the insurance. Proving such fraud took place – called “owner give up” – can be difficult, she said.
In the 23-month investigation recently concluded by local, state and federal law enforcement agencies in and around the Hollister area, undercover agents were used to buy such vehicles, Robinson said.
Agents were then able to provide a timeline for prosecutors to show up when suspects sold the vehicle as used, reported it stolen and began the insurance claim process, Robinson said.
Such claims result in higher rates for everyone else, Robinson said.
“It’s not a victimless crime,” Robinson said. “We all pay for it.”
When prosecuting such crimes, courts typically look for restitution for the parties at a loss, Robinson said.
Chris Armstrong, a public information officer for the Hollister-Gilroy Area office of the California Highway Patrol, said buyers should be aware of car sale offers that are “too good to be true.” Armstrong said that buyers should complete the necessary Department of Motor Vehicles documents to transfer ownership of the vehicle as soon as possible after the sale.
