Investigators with the California Department of Insurance (CDI) Criminal Investigations Branch’s Fraud Division announced the service of arrest and search warrants in an ongoing investigation of insurance fraud at an auto body repair shop.
Search warrants were executed at four Calif. residences and one auto body repair shop. The residences searched belonged to Art Mercado, 56, of Alameda, Scott Carey, 31, of Pleasanton, Martin Randisi, 34, of Tracy, and Eduardo Enerio, 49, of San Leandro. The auto body shop is located in Oakland. The four individuals were arrested and have each been charged by the Alameda County District Attorney’s Office with more than 20 felony counts of insurance fraud and grand theft. Bail was set for the four individuals as follows: Mercado – $1.7 million; Randisi – $1.1 million; Carey – $1.07 million; and Enerio – $990,000.
CDI was assisted in this investigation by the Alameda County District Attorney’s Office, the California Highway Patrol, the Bureau of Automotive Repair and the National Insurance Crime Bureau. Several insurance companies, including Farmers Insurance – Major Operations Unit (MOU), State Farm Insurance, Allstate Insurance, and CSAA, also provided assistance during the investigation.
In Jan. 2002, Farmers Insurance – MOU met with CDI about an alleged major insurance fraud ring operating out of Phil-Am Auto Body in Oakland and the case was assigned to the Benicia Regional Office Urban Auto Task Force. Investigators say that former Farmers Insurance employees, Carey and Randisi were allegedly involved in an extraordinarily large number of suspicious claims with Phil-Am. In less than two years, Farmers issued more than $650,000 in payments for claims associated with Phil-Am. This shop, previously owned by Enerio and Mercado, was allegedly involved in numerous cases of inflating damages to vehicles, staged and paper collisions, and intentionally inflicting damage to vehicles. Farmers examined 14 vehicles involved in claims with their company and Farmers investigators concluded that damages in photos taken by Carey or Randisi depicted manufactured, simulated, and/or staged damages.
A CDI investigator examined more than 100 Farmers insurance claims filed through Phil-Am. Twenty-seven collisions were identified where a person insured with Farmers alleged that they had swerved to avoid something in the road and subsequently struck two to four parked, unoccupied vehicles. CDI investigators found that all 27 collisions were allegedly fictitious. Suspects Enerio and Mercado were allegedly responsible for orchestrating these fictitious collisions. The investigation also revealed that Carey and Randisi were allegedly receiving kickback payments for creating fraudulent estimates and issuing property damage settlement checks. Investigators allege Mercado personally received $90,297.80 in checks from Farmers.
This investigation continues and numerous additional arrests are anticipated in the near future.
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