Fraud Roundup

September 24, 2007

Everett man gets three years for arson

A man who admitted torching a friend’s grocery store in Everett, Wash., in a plan by the two to collect insurance has been sentenced to three years in prison.

Naveed Khan, 25, of Everett, was ordered in U.S. District Court to spend three years on supervised release and pay $200,015 in restitution for the arson at Continental Spices, a Pakistani and Middle Eastern grocery.

According to court filings, owner Mizra Akram arranged with Khan to burn down the store, which was failing financially. On the night of July 8, 2004, the pair spray painted anti-Arab slogans on the walls and spread gasoline in the building to fake a hate crime, and early the next morning, Khan returned to set the building ablaze, investigators wrote.

Khan pleaded guilty to arson and conspiracy to commit arson in July 2005 and agreed to testify against Akram, who was convicted of conspiracy to commit arson last February after a one-day bench trial and was sentenced to four years and three months in prison.

During the investigation, police learned Akram had used the store to commit more than $30,000 of food stamp fraud. Akram was sentenced to 18 months for that offense before the arson case came to trial.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Garment employers cited

Investigators with California’s Economic and Employment Enforcement Coalition recently targeted Los Angeles and Riverside county businesses in the garment industry that were operating illegally by not carrying workers’ compensation insurance for their employees, avoiding labor, tax and licensing laws, and skirting safety and health regulations.

Forty-nine citations totaling $232,900 were issued for no workers’ compensation, not taking required payroll deductions, underpayment of overtime and minimum wage, not having a proper work permit for a minor and not having the proper garment registrations.

The EEEC enforces California labor laws and educate business owners and workers on those laws and regulations. The group also aims to root out businesses participating in the underground economy, which cost the state and legitimate businesses millions each year. EEEC is a collaboration of the Labor and Workforce Development Agency’s Department of Industrial Relations (Division of Occupational Safety and Health; Division of Labor Standards Enforcement) and the Employment Development Department.

Former Wash. mayor charged in scheme

Detectives investigating the killing of a former Washington State patrol sergeant last year say they learned that he was involved in an insurance scam with another trooper.

That second trooper, Douglas Merino, 51 — who is also the former mayor of Westport, Wash. — was charged in Thurston County Superior Court with first-degree theft, attempted first-degree theft, conspiracy to commit first-degree theft and forgery. Merino is on long-term disability leave with the patrol.

Prosecutors wrote that Merino and former patrol Sgt. James Earl Varner of Olympia, Wash., were involved in a plan to collect insurance by falsely reporting a 1949 Chevrolet Woody worth an estimated $60,000 stolen in 2005. Farmers Insurance investigated the claim as a potential case of insurance fraud, and on Feb. 1, 2006, the day after Varner gave a deposition to insurance investigators, he was found dead in a vehicle on a U.S. Forest Service road about three miles west of Packwood.

The death remains under investigation, according to the Lewis County sheriff’s office.

The insurance scheme involved Varner and his son, Kenneth Ray Varner, 30, who pretended to buy the 1949 Chevy from Merino, then took out an insurance policy and reported it stolen, prosecutors said. Merino told an insurance investigator he had spent many hours restoring the vehicle and sold it to Ken Varner for $60,000 in cash, they alleged.

“In the ensuing investigation, Doug Merino admitted to (authorities) that the green 1949 Chevy Woody … did not exist in the condition represented to Farmer’s Insurance, that he never delivered an actual working vehicle to the Varners and that Jim and Ken Varner’s insurance claim on the vehicle was fraudulent,” prosecutors wrote.

The younger Varner has pleaded guilty to attempted first-degree theft. Prosecutors agreed to recommend a sentence of one day in jail and 240 hours of community service.

Merino has been on disability leave since 1993, when he was injured while pulling someone out of a vehicle following a traffic accident, Patrol Capt. Jeffrey K. DeVere said. Earlier this year Merino was working as an investigator in the state Department of labor and Industries, according to the state Office of Financial Management Web site.

The elder Varner worked with the State Patrol from 1979 to 1997. He supervised the state patrol’s detachment in Hoquiam in the early 1990s; at the time, Merino was stationed there, DeVere said.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fugitive arrested in $500,000 auto scam

A Sherman Oaks, Calif., man has been arrested for insurance fraud, grand theft, identity theft, and federal charges, the California Department of Insurance reported. Moshe “Sanny” Assoulin, 35, was arrested in Israel on Aug. 19, 2007, by Israeli National Police. Assoulin is an Israeli national who grew up in California’s San Fernando Valley.

A warrant for Assoulin’s arrest was issued in October 2005 following an investigation by the CDI. The investigation revealed multiple fraudulent automobile insurance claims were allegedly submitted to car rental and insurance companies by Assoulin and co-conspirators. Nine defendants pleaded guilty to insurance fraud related charges in connection with the case. In May 2005, Assoulin was awaiting sentencing for federal charges when he became aware of CDI’s investigation. At that point, Assoulin fled to Israel, CDI said.

The CDI Fraud Division’s 2005 investigation revealed that from 2000 to early 2002, Assoulin participated in a scam in which fraudulent insurance claims were submitted to car rental and insurance companies. Under the alleged scheme, a person would rent a vehicle from a car rental company and return it a day or two later with slight damage. The renter would report that he or she had accidentally struck a parked unoccupied vehicle. Another person would then contact the car rental company as the owner of the parked unoccupied vehicle, and submit a claim for property damages. The same vehicles with the same damages were used repeatedly in multiple claims.

One of the vehicles, a 1997 Mercedes Benz SL600, was used in 10 claims, and various insurance companies paid more than $100,000 in settlements for alleged damages to the vehicle. The potential loss to the various car rental and insurance companies is estimated at nearly $500,000. The National Insurance Crime Bureau, as well as multiple car rental and insurance companies, assisted in the investigation.

The CDI Fraud Division and the Drug Enforcement Administration jointly submitted to Israel a request for the arrest and extradition of Assoulin through the U.S. Department of Justice Office of International Affairs. The request was reviewed by the Israeli Ministry of Justice, and an Israeli arrest warrant was issued. On Aug. 19, 2007, Israeli National Police located and arrested Assoulin. The Los Angeles County District Attorney is prosecuting the case.

Topics USA California

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