Four Arrested in Staged Auto Theft Ring

May 23, 2005

An investigation conducted by the California Department of Insurance (CDI) Santa Clara County Urban Organized Auto Fraud Task Force (SCC Auto Fraud Task Force) has resulted in the arrest of four men for insurance fraud. One of the four suspects, Jeffrey McCallion, 22, self-surrendered at the Santa Clara County Sheriff's Office in San Jose last Tuesday afternoon. Brian Gutierrez, 22, Arnoldo Chavez Jr., 18, and Jayme Rivera, 18, were arrested at the California Highway Patrol (CHP) Office in Modesto on May 13, 2005. Each suspect faces one count of automobile insurance fraud and bail was set at $10,000 each. If convicted, the suspects could each face up to five years in prison and/or $50,000.00 in fines.

"Staging an auto theft of your own vehicle is strictly a crime of greed, pure and simple," said Insurance Commissioner Garamendi. "The Auto Fraud Task Force is committed to uncovering and stopping these scams. Our investigators will continue to examine every scrap of evidence in each case and work with local District Attorneys to put fraudsters behind bars."

This CDI Auto Fraud Task Force is comprised of investigators from the Santa Clara County District Attorney's Office, CHP and the CDI Fraud Division. The case is being prosecuted by the Santa Clara County District Attorney's Office.

Investigators found that on Sept. 5, 2004, McCallion reported to the Sunnyvale Police Department that his 1997 Honda Prelude had been stolen from the front of his residence. The vehicle was recovered in an irrigation canal by Modesto CHP on Sept. 9, 2005. On Sept. 10, 2004, an insurance claim for the reported theft was filed with 21st Century Insurance. As a result of the claim for the reported theft, 21st Century Insurance paid out approximately $10,000.

The SCC Auto Fraud Task Force received information that the reported theft of McCallion's vehicle was a staged auto theft, and that McCallion was involved. Based on this information The Auto Fraud Task Force initiated an investigation into the alleged insurance fraud and the investigation revealed that McCallion allegedly conspired with Gutierrez, Chavez, and Rivera to orchestrate the theft of his vehicle in order to obtain payment for the loss.

On Sept. 4, 2004, Gutierrez, Chavez, and Rivera traveled from Modesto to McCallion's residence in the City of Sunnyvale, and as part of a prearranged plan with McCallion, allegedly staged the auto theft of McCallion's 1997 Honda Prelude. The vehicle was driven back to Modesto where it was subsequently stripped and dumped into an irrigation canal and recovered later by the CHP.