Five Monterey County Shop Owners Arrested in Auto Fraud Ring

January 23, 2004

Monterey County Sheriff’s Department arrested five business in sting concluding what has turned out to be one of the largest undercover insurance fraud sting operation in the history of Monterey County.

Arrested were:
· 40-year-old David Alan Long, owner of California Automotive Tire in Salinas
· 36-year-old Ossie Luis, owner of T.K.O. Sounds in Salinas
· 34-year-old Micky Garibay, owner of Specialty Auto Body in Salinas
. 23-year old Jesus Andrade, owner of 1st Quality Auto Body in Salinas
· 34-year old James Shalens Udesh Pal owner of Auto Touch Up Specialists in Marina

The two part operation began in early 2003 when Allstate Insurance Company and California State Auto Association claim investigators contacted the Monterey County, Multi Agency Detail for Commercial Auto Theft (M.A.D.C.A.T.) when they suspected several Monterey County tire, stereo and body shops of committing insurance fraud.

Information provided by the insurance companies indicated that the tire and auto stereo shops were providing fictitious invoices. The insured would then report to his insurance company that their tires and wheels and/or stereo had been stolen. The insurance company would then pay on the fictitious invoice. Information had also been received that body shop in the area were committing fraud by not charging deductibles and doing fraudulent repairs.

In April 2003 during the first part of the two-part operation, undercover deputies visited approximately 10 tire and stereo shops. Of these, three provided fictitious invoices, even though they had been told that invoices were going to be used for insurance fraud. Two of the three shops charged cash for the fictitious invoices. One of the shops, a stereo shop took the time to work with the undercover Deputy and explain to him the best way to commit fraud. This included the owner of the shop, showing the undercover deputy the proper wiring to make it appear that a stereo had been taken.

At the conclusion of this operation the two shop owners were taken into custody and charged with insurance fraud.

As the tire and stereo shop investigation continued, M.A.D.C.A.T. working with investigators from Allstate Insurance and the California State Auto Association arranged a second operation. Allstate Insurance provided M.A.D.C.A.T. with two vehicles that had been involved in auto accidents. California State Auto Association provided one damaged vehicle. Both insurance companies then issued new insurance policies for the vehicle.

The three vehicles were taken to the Bureau of Automotive Repair in Sacramento, disassembled and inspected by BAR investigators, then reassembled and returned to Monterey County Sheriff’s Dept.

M.A.D.C.A.T. along with the Sheriff’s Department personnel, California State Department of Insurance investigators and Monterey County District Attorney Investigators began the second part of the operation.

Allstate Insurance and California State Auto Association provided a list of suspected body repair shops in Monterey County. Three body shops were contacted. Cars were taken to the shops. The undercover investigator told the shop owner that they could not afford to pay the $500 deductible for repair. They then requested the deductible be waived, this in itself being insurance fraud. All three auto body shop owners allegedly agreed to commit insurance fraud.

The vehicles were left with the shops. Undercover agents returned after the repairs were completed to pick up the vehicles. The shops were given the checks from the insurance companies. No deductible was paid. The vehicles were then returned to the Bureau of Automotive Repair for re-inspection.

It was found that with all three vehicles, repairs had been paid for that had not been completed. Parts had also been billed for that had not been replaced. On one invoice there was a $685 tow bill for a car that had been driven to the shop.

On Jan. 9, 2004 members of M.A.D.C.A.T., S.C.A.R.E., Monterey County Sheriff’s personnel, California State Department of Insurance Investigators, California Highway Patrol Investigators, Monterey County District Attorney Investigators, Bureau of Automotive Repair Investigators and Permit Inspectors from the City of Salinas concluded the investigation. During the inspections components from 3 stolen vehicles were located in the shops. All three-shop owners were placed into custody. Also two of the three shops along with a forth shop located at 245 Front St Salinas were closed by the City of Salinas for numerous violations.

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