A five-year undercover investigation into a staged auto collision ring came to a conclusion Friday with the sentencing of the final attorney implicated by the joint efforts of the California Department of Insurance (CDI) Fraud Division and the Federal Bureau of Investigation.
Attorney Inna Gofman was sentenced in Los Angeles County Superior Court, the last of the 52 people indicted in the case, dubbed Operation Twisted Metal. Gofman was sentenced to three years formal probation, a $500 fine and six days county jail credit. In February, Gofman’s paralegal, Irma Palacios was sentenced to one year probation and a $200 fine. Gofman and Palacios’ restitution payments will be determined in a hearing held April 30.
“The efforts of this Department’s Fraud officers and the FBI saved California insurance consumers millions of dollars that would have lined the pockets of these criminals,” said Insurance Commissioner John Garamendi. “This should send a message to all of those who seek to scam the system – you will be caught, and you will be prosecuted.”
The investigation began in 1995, when an undercover operative from CDI infiltrated a crime ring that ultimately staged 11 “accidents” and faked two auto thefts. In Gofman’s case, an insurance company was bilked of more than $107,000 in the scheme. During the course of the investigation more than $219,000 in fraudulent claims was submitted.
Investigators said that had the crime ring not been discovered, the defendants were on pace to accumulate more than $624,000 in fraudulent claims annually.
The multiple undercover operations by the Fraud Division of CDI resulted in the arrests and convictions of two attorneys, three chiropractors, a law office administrator, a law office paralegal, a physical therapist, two cappers (those who recruit participants), and 42 additional participants, including “passengers” in the wrecked automobiles.
Some of the subjects were tape recorded describing the manner in which they staged the collisions, how the scheme was conducted with the participating attorneys and doctors, and how the participants divided the proceeds.
The case was prosecuted by the United States Attorney General’s Office and the Los Angeles County District Attorney’s Office. The Department of Insurance received assistance during the investigation from a number of insurance companies, including Farmers Insurance Group, GEICO, 21st Century, Wawanesa, Prudential, Liberty Mutual and State Farm.
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