N.Y. Officials Announce Indictments of Auto Body Shop Insurance Fraud Ring

August 14, 2003

Queens District Attorney Richard A. Brown, joined by Police Commissioner Raymond W. Kelly and New York State Insurance Department Superintendent Gregory V. Serio, announced that the owner, manager and employees of a Far Rockaway, Queens automobile body shop and garage have been indicted on insurance fraud and other charges in an undercover “sting” investigation that has closed down an elaborate racket in which false claims of vandalism-related property damage to vehicles led to settlements of thousands of dollars.

Brown noted that the garage’s previous owner – the deceased husband of the garage’s current owner — was convicted of insurance fraud and sent to prison in 1992 for engaging in virtually the same kind of scheme. He said the charges are the result of the latest in a series of undercover operations in Queens County targeting auto insurance fraud that began in 1991.

The undercover investigation was conducted by the NYPD’s Organized Crime Control Bureau Auto Crime Division, the District Attorney’s Economic Crimes Bureau and the New York State Insurance Department with the assistance of the insurance industry.

The defendants — all of whom are associated with Al’s Body Shop and Garage at 10-16 Beach 19th Street in Far Rockaway – have been charged with Insurance Fraud in the Third and Fourth Degree; Grand Larceny in the Third and Fourth Degree; Falsifying Business Records in the First Degree and Scheme to Defraud in the First Degree and face up to seven years in prison if convicted.

The announcement on the NYSID Web site identified the defendants as follows: “(1) Lisaleah Perez Rizzo, 38, of Rural Route 2, Box 2240, Nicholson, Pennsylvania; (2) Anthony Perez, 40, 65-29 Bayfield Avenue, Far Rockaway; (3) Andy Perez, (identified as the brother of Ms. Perez Rizzo, age and address unknown); (4) David Smith, 45, of 420 Beach 64th Street, Far Rockaway; (5) Allen Borland, 41, of 1360 By 24th Street, Far Rockaway; (6) Luis Gonzalez, 34, of 301 Beach 84th Street, Far Rockaway; and (7) the corporation Al’s Body Shop and Garage, Inc., commonly known as Rizzo’s Body Shop.” Lisaleah Perez Rizzo was identified as the widow of Al Rizzo, the deceased previous owner of the garage who was tried, convicted and sentenced to a term of one and one-third to three years in prison in 1992 for running an auto insurance fraud scam out of the garage.

They are charged with allegedly defrauding two insurance companies — Progressive Insurance and Liberty Mutual — by filing property damage claims containing false information that totaled over $17,000 related to three vehicles — a luxury sedan, a pickup truck and a station wagon. The District Attorney said that the defendants are alleged to have fraudulently received $8,070 in August 2002 from Liberty Mutual involving a 1997 BWM 740 sedan; $1,741 in October 2002 from Progressive Insurance involving a 2001 Chevrolet Silverado 4×4 pickup truck; and $7,200 in January 2003 involving a 2000 Chevrolet Suburban station wagon.

The investigation began in September 2001 when New York City Police Department Auto Crime Division detectives received information about alleged wrongdoing involving Al’s Body Shop and Garage at 10-16 Beach 19th Street in Far Rockaway. NYPD detectives, New York State Insurance Frauds Bureau investigators, insurance company investigators and prosecutors of the District Attorney’s Economic Crimes Bureau met and planned a “sting” operation that was to include extensive surveillance.

The bulletin gave details of the investigation as follows: “(1) Procurers solicited car owners whose vehicles were brought to the garage and “surgically stripped” — meaning that various valuable parts such as air bags, seats and stereos were carefully removed from vehicles and stored there. (2) Garage employees drove the now-stripped but still drive able vehicles — which in some instances were also additionally damaged with dents or scratches — to various street locations and provide that location to owners who in turn filed reports to police claiming vandalism-related damage. (3) Owners retrieved their vehicles and drove them to the garage where employees contacted an owner’s insurance company. (4) Insurance adjusters not involved in the scheme responded to the garage and submitted damage repair estimates that owners thereafter used to file damage claims of thousands of dollars. (5) The illicit proceeds from the fraudulent damage claims were shared among the defendants, procurers and vehicle owners.”

Brown and Kelly both expressed their hope that the arrests would send a clear message to would-be fraudsters “that law enforcement is determined to put a major dent in this kind of wrongdoing,” and that they would ultimately benefit all New Yorkers by keeping auto insurance costs down. Serio noted that, “These arrests come at an important time of year following National Fraud Awareness Week when we were reminded to be educated about the threat of fraud and the impact that fraud has on society.”

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