The December 2004 undercover investigation into body shop-related insurance fraud targeted 13 shops within San Mateo County. Suspect shops were identified as a result of fraud-related consumer complaints to CDI and the National Insurance Crime Bureau (NICB). State Farm Insurance and the Civil Service Employees Insurance Group also assisted in the investigation.
Investigators reported that nine of the shops provided undercover officers with fraudulent repair estimates, and three of them instructed "customers" to further damage their auto. Investigators also said that one shop actually inflicted additional damage upon the undercover vehicle.
The estimates were for alleged accidents that were both covered and not covered by insurance. The undercover officer asked the body shop owner/estimator to combine the insured and uninsured damage in the claim submitted to the insurance company. The fraudulent estimates were $3,000 - $4,000 each, with approximately half of the estimates' total amount going towards the uninsured damage.
Six of the suspects arrested are shop owners. Those arrested include:
•Luis Manuel Amador, 42, of San Bruno
•Adrian Balmore Bonilla, 44, of South San Francisco, owner of Bonilla's Auto Collision in South San Francisco
•John Robert San Filippo, 67, of San Mateo; owner, A & J Auto Body in South San Francisco
•Gabriel Campos Guzman, 23, of Newark
•Ricki Jay Ingalsbe, 42, of San Bruno; owner, A Touch of Class Automotive in South San Francisco
•Yohannes "John" Mesfine, 45, of Palo Alto; owner of Mesfine Auto Body and Paint in Redwood City
•Don Steven Reimer, 53, of Santa Clara
•Jose Rolando Santos, 47, of Los Banos; owner of Sanchez Auto Repair in San Mateo; convicted of insurance fraud in 1999
•Cristian Velazquez, 22, of South San Francisco
•Robert Otto Waldschmidt, 56, of San Carlos, owner; Automotive Enterprise in San Carlos
The cases will be prosecuted by the San Mateo County District Attorney's Office and could result in prison terms of up to five years, and/or a maximum fine of $50,000 for each suspect.
Investigators keep busy
Since 2001 more than 400 body shops in northern California have been visited by CDI, California Highway Patrol and local district attorney investigators as part of a continuing series of insurance-related sting operations. In total, nearly 100 auto body shop owners and/or employees have allegedly committed insurance fraud.
"These are serious crimes that ultimately victimize all insurance consumers," stated Insurance Commissioner John Garamendi. "Insurance fraud is a major cost driver in the price Californians pay for premiums. Our mission is to protect consumers, and that includes aggressively attacking insurance fraud whenever and wherever we find it."
On January 13, 2005, Victor Morales Delgado, 35, and his brother-in-law, Jose Guerrero, 54, both of Sacramento, self-surrendered to Task Force investigators for falsely reporting their vehicle stolen and filing a fraudulent insurance claim.
The suspects were booked into the Sacramento county jail. The Sacramento District Attorney's Office is prosecuting the case. If convicted on both counts, each suspect could face up to five years in state prison and/or a maximum fine of $150,000.
The California Highway Patrol's (CHP's) Mexico Liaison Unit contacted Task Force investigators in April 2004, advising that Mexican authorities had located and impounded Delgado's 2002 Lincoln Continental after receiving an anonymous call of a vehicle fire. Although the vehicle had not been reported stolen at the time, Mexican and CHP authorities believed the situation was suspicious.
Task Force investigators discovered that Delgado and Guerrero reported Delgado's vehicle was stolen from the Florin Mall parking lot in Sacramento on March 19, 2004. The next day Delgado filed an insurance claim with Progressive Insurance for the theft of his vehicle, including the loss of a $4,000 lap top computer as part of the claim. Delgado claimed a total loss of more than $20,000.
The investigation revealed that Delgado could no longer afford the monthly car payments, and so Guerrero took the vehicle to Mexico and flew back to Sacramento, where he accompanied Delgado to Florin Mall to help report the vehicle stolen to mall security and CHP.
In late 2004, Cameron Antonio Wilkins, 30, of Colfax, self-surrendered to CDI investigators. Wilkins was booked into the Sacramento county jail on one felony count of insurance fraud associated with the reported theft of his vehicle. Ironically, Wilkins was employed as a customer service representative in Progressive Insurance's Rancho Cordova facility.
The Sacramento County District Attorney's Office is prosecuting the case. If convicted, Wilkins could face up to five years in prison and/or a maximum fine of $50,000.
Wilkins had reported to CHP that his 2001 Mitsubishi Eclipse had been stolen from his employer's parking lot. Later that day Wilkins provided his auto insurance carrier, Mercury Insurance, with a recorded statement regarding the theft of his vehicle.
The next day, however, CHP recovered Wilkins' vehicle in Colfax and the recovering officer discovered that it had been pushed or rolled down a hill with its transmission placed in park and no signs of either forced or keyed entry. CHP subsequently contacted CDI regarding possible insurance fraud stemming from the alleged theft.
A two-month investigation by CDI revealed that Wilkins gave the vehicle's keys to his two juvenile brothers on the night of August 2, 2004, who were instructed to "get rid of" the vehicle because it had mechanical problems. Wilkins claimed he could not afford to repair it.
Later, Wilkins admitted he had his brothers dispose of his vehicle because he owed more than it was worth. Due to Wilkins' fraudulent claim, Mercury Insurance was prepared to pay $12,500 for the loss of the vehicle.
San Jose father and son arrested
In 2004, Virgil Ray Blackmer, 51, and his son, Brian Blackmer, 19, both of San Jose, were arrested on one felony count each of insurance fraud. The suspects were booked into the Santa Clara county jail after they were apprehended by investigators with the CDI.
The case is being prosecuted by the Santa Clara County District Attorney's Office. If convicted, each Blackmer could face up to five years in state prison and/or be fined a maximum of $50,000.
Virgil Blackmer made an automobile collision insurance claim with Infinity Insurance, stating that he crashed his 2003 Volkswagen GTI into a wall on private property while trying to avoid a deer in the roadway. Infinity Insurance deemed his vehicle to be a total loss.
However, Infinity Insurance and CDI later learned that Virgil's son, Brian, was actually driving the car at the time of the accident. Although Brian was an excluded driver on Virgil's Infinity Insurance policy, both Virgil and Brian gave false recorded statements to Infinity Insurance stating that the father was driving his car at the time of the accident.
Blackmer's claim would have cost Infinity Insurance approximately $18,000 for damage to the car and approximately $2,500 for the damage to the wall.