"Auto insurance fraud is not a victimless crime," said CDI Commissioner Poizner. "We all pay when our fellow consumers try to defraud an insurance company by not playing according to the same rules as the rest of us."
On February 11, 2008, Munoz reported to the Los Angeles Police Department that his 2005 Mercedes Benz E500 was stolen, indicating he had parked the vehicle around 8:45 a.m. on a street adjacent to the superior court in city of Los Angeles. Munoz also reported these same facts to Allstate Indemnity Insurance Company. He claimed that he realized by 10:15 a.m. that his vehicle was allegedly stolen.
The investigation revealed, however, that this vehicle had already been recovered at 2:41 a.m. that same morning, albeit fully burnt and completely destroyed, in the city of Riverside by the Riverside Police Department (RPD). This discovery occurred prior to the time Munoz said he drove and parked the car in Los Angeles. RPD reported the vehicle was not drivable.
The potential loss of this claim was $47,000.
The criminal charges, specifically Penal Code Section 550 (a) (1) - knowingly present[ing] a fraudulent claim for the loss of a motor vehicle, were filed against Munoz by the Riverside County District Attorney's Office, which is prosecuting the case. Munoz faces a penalty of up to five years in prison and/or $10,000 in fines if convicted.
The arrest resulted from an investigation by the Auto Fraud Interdiction Team operating out of the California Department of Insurance's (CDI's) Inland Empire Regional Office. The Auto Fraud Interdiction Team is comprised of CDI and the California Highway Patrol. Allstate also provided integral assistance during the investigation.
Commissioner Poizner oversees 16 CDI Enforcement Branch regional offices throughout the state. Approximately 2,000 insurance fraud-related arrests have been made by the Department of Insurance's enforcement division since Commissioner Poizner took office in 2007 - more arrests than have been made during any other two year period, under any previous insurance commissioner.