Fraud Roundup

Auto Fraud Suspect Arrested

A Desert Hot Springs, Calif., resident was arrested for allegedly defrauding his insurance company of $26,000, the California Department of Insurance reported. Robert Andrew Nelson was arrested in Cathedral City, Calif., on charges of filing a false police report and knowingly presenting a fraudulent insurance claim.

CDI said on Oct. 28, 2007, Nelson reported that his 2005 Expedition was stolen from his driveway in the middle of the night, wrecked and returned to his driveway. Nelson claimed that he hosted a gathering of about a dozen acquaintances at his home and went to bed at 8 p.m. on Oct. 27, while his guests remained at his home. He claimed he did not hear his Expedition being driven back to his home on three wheels, but found the damaged vehicle when he awoke the next morning. He filed a claim with his insurance company, which paid $26,000 in replacement costs.

The insurance company was subsequently contacted and informed that Nelson struck a vehicle in the early morning of Oct. 28. A police report and an additional witness also named Nelson as the driver of his vehicle at the time of the collision, CDI said.

CDI investigators revealed that a witness heard Nelson’s vehicle strike another car the morning of Oct. 28. The witness followed the Expedition to Nelson’s home. Another witness claimed to have watched Nelson walking near his vehicle and into his home following the crash. According to another witness, there were no additional cars present at Nelson’s home on the night of Oct. 27, when he claimed he hosted a get together, CDI said.

If convicted, Nelson could face a two- to five-year prison sentence and fine of up to $50,000.

Agent Charged for Defrauding Businesses

An insurance agent was arrested in California for defrauding 18 business owners by stealing more than $2.5 million they had paid him to take out insurance policies for their businesses, the California Department of Insurance reported.

Anthony David Medina was charged with 153 felony counts including 86 counts of forgery, 33 counts of transacting as an insurance company without a certificate of authority, 19 counts of grand theft, five counts of filing false tax returns, four counts of willfully failing to file a tax return, four counts of identity theft, two counts of insurance fraud, and sentencing enhancement allegations for taking more than $50,000 and $150,000. Medina was arrested in Oxnard, Calif., and was being held on $2.9 million bail at press time. He faces a maximum sentence of 54 years and four months in state prison if convicted on all counts.

Medina’s wife, Vanessa Chaverri, was arrested and is charged with five felony counts of filing a false return. She was being held on $436,000. Chaverri faces a maximum sentence of six years in state prison if convicted.

According to the DOI, between June 2003 and November 2007, Medina operated Prompt Insurance Agency in Newport Beach, Calif., where he is accused of collecting more than $2.5 million from 18 business owners, including restaurants, plumbing and painting businesses, and other service oriented businesses, under the pretense of securing workers’ compensation and general liability insurance policies for them.

CDI said Medina is accused of failing to take out insurance policies for many of the businesses and charging the victims more than the stated premiums. In some instances, he is accused of forging documents to finance insurance policy premiums instead of paying the full amount up front to the insurance company, despite the fact that the victims had paid him the total cost of the policy premium.

Medina is accused of issuing false certificates of insurance to some of his victims. The defendant is accused of creating false policy numbers or giving companies policy numbers that actually belonged to other businesses.

As a result of Medina’s actions, CDI said several business owners and employees suffered losses that should have been covered by insurance. In some cases, employees who had been injured at work did not receive the workers’ compensation benefits they were due, and the business owners had to pay for employee care that should have been covered by insurance.

Between 2003 and 2006, Medina is accused of failing to file any tax returns for Prompt Insurance Agency. Chaverri and Medina are accused of failing to report the income from the stolen monies on their personal tax returns. They are accused of failing to pay more than $230,000 in taxes. CDI believes the defendant was using the stolen money for personal use.

This case was jointly investigated by the California Franchise Tax Board, DOI, and Orange County District Attorney’s Office.

Topics California