Massachusetts Men Charged with Insurance Fraud

October 2, 2000

Albert F. Melchione, 71, of Rockland, Mass., and his grandson, Richard J. Melchione, Jr., 30, of Hull, Mass., have been indicted by a federal grand jury on conspiracy and mail fraud charges in connection with a scheme to defraud numerous insurance companies.

The indictment alleges that Melchione and his grandson devised a scheme to defraud auto insurers by causing others to file false vehicle theft reports and affidavits. The indictment charges that vehicle owners gave their autos and keys to the duo in order to get rid of them so the owners could report them stolen.

The Melchiones in turn gave the vehicles and keys to an undercover Massachusetts State Police trooper who purported to be a ramp truck driver who could get rid of the motor vehicles by transporting them across state lines and out of the country.

The indictment further alleges that the Melchiones told the car owners to file false stolen vehicle reports with the police several days after they had given the motor vehicles to the undercover trooper. The indictment also alleges that motor vehicle owners filed false stolen vehicle reports with the police, and then filed claims and affidavits of vehicle theft with their insurance companies, in which they claimed that their vehicles had been stolen, when they knew that such claims were false.

This indictment is the culmination of a two-year investigation into insurance fraud that has been conducted by federal, state, and local law enforcement agencies. As part of the investigation, the Massachusetts Attorney General’s Insurance Fraud Bureau has prosecuted nine car owners involved in the Melchiones’ fraud scheme. Eight of those car owners have already pleaded guilty to a variety of charges in state court, including motor vehicle insurance fraud, larceny over $250, perjury in a statement to the police alleging vehicle theft, and removal or concealment of a motor vehicle to defraud an insurer. One car owner remains under indictment in Norfolk County.

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