Major Fraud
Fraud is a serious crime. In worst case scenarios, fraud artists can bilk millions of dollars from unsuspecting victims, companies, and government agencies. Such criminal operations are often quite sophisticated and require special attention from law enforcement.
To that end, the District Attorney’s Major Fraud Division works with the Bureau of Investigation, the sheriff’s department, local police, and state agencies to investigate and prosecute individuals engaged in complicated fraud schemes throughout the County. The Division’s specially trained deputy district attorneys prosecute frauds in which losses exceed $300,000. The Division also handles fraud cases that require expert prosecution because of their complex nature.
Real Estate Fraud
Some individuals attempt to steal the money or home equity of homebuyers and homeowners through fraudulent real estate transactions. This type of crime can have a serious impact on its victims. As a result, the District Attorney’s Major Fraud Division has a Real Estate Fraud Section dedicated to prosecuting fraudulent real estate transactions.
The Los Angeles County Department of Consumer Affairs runs a Real Estate Fraud and Information Program. For more information, you can visit them online at http://consumer-affairs.co.la.ca.us/. You can also call the Los Angeles County Real Estate Fraud Hotline at (800) 973-3370, 24 hours a day.
Major Fraud Division
Los Angeles County District Attorney's Office
201 N. Figueroa St., Suite 1600
Los Angeles, CA. 90012
Phone: (213) 580-3200
Identity Theft
Each year, identity theft – one of the fastest growing crimes in the nation – harms thousands of consumers throughout Los Angeles County. Ultimately, the identity thief aims to obtain personal information about you – your Social Security number, birth name, credit card numbers, or birth date. With this information, the identity thief can assume your identity and establish bank accounts or credit in your name, leaving you to deal with the fallout. Identity thieves also can pose as you in the commission of a crime, perhaps leaving you with a false criminal record.
The District Attorney’s Office is committed to protecting the community from identity theft and prosecuting those responsible for this crime. As with all types of fraud, however, the most effective protection is a consumer’s own awareness and vigilance. The following information explains how to Prevent Identity Theft and offers Solutions For Victims. You can also download the District Attorney’s pamphlet, "Identity Theft – A Growing Concern," by clicking here.
New California laws offer help for victims of identity theft. As with all types of fraud, however, the most effective protection is a consumer’s own awareness and vigilance.
Criminals can only assume your identity if they have access to your personal information. Be careful when you disclose any personal facts, and keep in mind the following tips:
- Never give anyone a credit card number or related information over the phone unless you initiated the call or are dealing with someone you know. Similarly, avoid confirming such information to a stranger on the telephone.
- Do not carry your Social Security number, birth certificate, passport, or extra credit cards with you.
- When using an ATM or public telephone, shield the viewing screen or keypad so that others cannot read your Personal Identification Number (PIN).
- Do not write your Social Security number or credit card numbers on checks. The Social Security number is a prime target of criminals and provides them with the key to unlock a variety of personal information.
- Order a copy of your credit report once a year from the three major credit bureaus – Experian (formerly TRW), Equifax, and Trans Union (See Contact Information). Check for false charges that may indicate fraud. Credit report order fees range from $8.
- Shred all documents containing account numbers or other personal information before disposing of them. Bank and other financial statements, ATM and credit card receipts, and pre-approved credit offers are among criminals’ favorite sources of information. . Bank and other financial statements, ATM and credit card receipts, and pre-approved credit offers are among criminals’ favorite sources of information.
- Finally, keep a list of all credit card account numbers and expiration dates so that you can contact creditors quickly.
Most importantly, remember that personal information about you – your Social Security number, account numbers, maiden name, and PIN numbers – is the key to your identity. In the wrong hands, such information can be used at your expense.
If you believe somebody has stolen your identity, California law entitles you to relief. Your local police agency – or the agency where the crime took place – must take a police report from you, and must provide you with a copy of that report to help clear your name. In cases of imposters creating false criminal histories for innocent victims, the law provides a system for clearing your good name and correcting state criminal history records.
The following steps will help you block negative information resulting from fraud and reclaim control over your credit and criminal history records:
Financial Identity Theft
- Gather as much information as you can about disputed credit data or other indications of identity theft.
- Immediately close all your credit card accounts and notify the banks of the theft.
- Report the alleged crime to your local police or sheriff’s department and ask the officer to write a police report of the incident.
- Ask for a copy of the police report and make photocopies.
- Send a copy of the police report, with a letter of explanation, to each of the three major credit bureaus: Experian (formerly TRW), Equifax, and Trans Union (See Contact Information). Once the credit bureaus receive a copy of the police report, California law requires them to block negative credit information resulting from the alleged fraud.
- Continue to ask for copies of your credit reports regularly for at least several months to check for any new fraudulent accounts.
- If your Social Security number was used fraudulently, report the problem to the Social Security Administration’s Fraud Hotline at (800) 269-0271.
Criminal Identity Theft
If you believe your identifying information was used to create an erroneous criminal history, contact the California Department of Justice at (888) 880-0240. Provide the Department of Justice with a copy of the police report and other supporting information.
Consult a lawyer to determine if you should go to court to use the new procedures now available for obtaining a judge’s order indicating that you are innocent of the criminal identity theft at issue.
Major credit bureaus:
:Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111
www.equifax.com
Experian (formerly TRW)
P.O. Box 1017
Allen, TX 75013-1017
(888) 397-3742
www.experian.com
Trans Union
P.O. Box 6790
Fullerton, CA 92834-6790
(800) 916-8800
www.transunion.com
Agencies:
:Los Angeles County Department of Consumer Affairs
(213) 974-1452
Consumer Protection Division,
Los Angeles County District Attorney’s Office
(213) 580-3273
High Tech Crimes Unit,
Los Angeles County District Attorney’s Office
(213) 580-3272
Bail Denied
NEW YORK - NY - A New York man accused of pledging allegiance to al-Qaeda in Yemen and buying digital watches prosecutors said could be used as explosives timers, was denied bail on Wednesday in Manhattan federal court. A New York man accused of pledging allegiance to al Qaeda in Yemen and buying digital watches prosecutors said could be used as explosives timers, was denied bail on Wednesday in Manhattan federal court. El-Hanafi pleaded not guilty to one count of conspiracy to provide material support to Osama bin Laden’s al Qaeda network.
Just Busted
Knoxville, TN – Just Busted is a small newspaper distributed in local convenience stores, featuring people who have been arrested or who have skipped bail. The paper allows bondsmen to post pictures of skipped fugitives, in the hope that someone knowing the accused will come forward with information as to there whereabouts. Attorneys, bondsmen, and others are also allowed to use the newspaper as a place to advertise their business. Recently, the Knox County Sheriff’s Department has started posting arrest reports and mug shots on its own website, which also links to mug shots of everyone in the county jail.
Read the full story here.
United States-Mexico Partnership: A New Border Vision
The new framework is based on the principles of joint border management, co-responsibility for cross-border crime, and shared commitment to the efficient flow of legal commerce and travel:
- Enhancing Public Safety – The protection of Mexican and U.S. citizens from the criminal organizations responsible for the traffic in people, drugs, arms, and money across our common land border is a key priority for both countries. In addition to the bilateral Merida Initiative programs currently underway, we must develop joint strategies for key smuggling and trafficking corridors along with regular sharing of information on investigations, prosecutions, and screening practices.
- Securing Flows – The central challenge in managing flows of people and goods is to separate high-risk travelers and cargo from low-risk ones. Tools that help prevent illegitimate trade and travel while expediting legitimate trade and travel include implementing complementary risk management strategies in both countries, establishing a bi-national “model port” to share information on goods and people, and improving trusted traveler and shipper programs. We must work together with the private sector to ensure that we achieve these goals.
- Expediting Legitimate Commerce and Travel – Each day, about a billion dollars of commerce and a million people cross the U.S.-Mexico border. Affirmative steps that accelerate the flow of people and goods through ports of entry enhance both countries’ economic competitiveness. Both countries need work with the private sector to encourage investment in the people, technology, and infrastructure that comprise a 21st century border. Secure transit lanes for pre-cleared rail and truck shipments as well as passenger pre-clearance programs are two tools that could make cross border trade and travel more efficient.
- Engaging Border Communities – Mexico is the number one or number two export destination of twenty-two U.S. states. Cross-border trade contributes enormously to the economic vitality of both countries, especially in the border region. Continuing to engage border communities, as well as state, local, and tribal governments in bi-national strategy development, law enforcement, and communications, is essential to collaborative border management.
- Setting Policy – Achieving rapid policy change requires an agile inter-agency process within each country as well as a means by which both governments can easily coordinate at a bi-national level. Both countries need to reinvigorate their policy-setting architecture to address the statutory, regulatory, systems, and infrastructure changes needed to realize our new vision of collaborative border management.
PRN: 2010/T26-3
Insurance Commissioner Steve Poizner Hosts Fraud Summit
"Insurance fraud is not a victimless crime," said Commissioner Poizner. "The costs are passed onto consumers to the tune of $500 a year for every man, woman and child and that's why I have made fighting insurance fraud one of my highest priorities."
The Task Force also released "Reducing Insurance Fraud in California," a report today that detailed a number of recommendations to reduce fraudulent claims in California. While many of the recommendations require regulatory changes, legislative action, or additional funding, the Commissioner was able to adopt a number of recommendations immediately, including:
- Create a fusion center for insurance fraud investigations so law enforcement can share information more efficiently and quickly to identify emerging trends and crime patterns.
- Better training for the Special Investigation units (SIU) on the recognition, documentation, and reporting of suspected insurance fraud claims.
- Recognize insurance companies that go beyond compliance for their greater commitment to fighting fraud.
- Increase the outreach efforts of CDI about the consequences of fraud, how the public can recognize it and report it.
- Adopt more aggressive recruiting and retention practices, including pay upgrades, so that CDI can recruit and retain qualified investigators.
The Task Force was created by Commissioner Poizner to bring together public and private sector experts to develop innovative methods to combat insurance fraud. The inaugural Task Force meeting was held in May 2007.
"I also want to thank the Blue Ribbon Review committee, other Task Force members and my staff for all their hard work in putting together such a phenomenal report," said Commissioner Poizner. "I can and will immediately enact five of these recommendations and have directed my staff to examine the remaining proposals to determine what steps need to be taken next."
Blue Ribbon Review committee members included Mike Brown, California Business, Transportation & Housing Agency chief deputy secretary for public safety; Frank Scafidi, National Insurance Crime Bureau president & CEO; Steve Cooley, Los Angeles County district attorney; Bonnie Dumanis, San Diego County district attorney; Richard Holober, Consumer Federation of California executive director; The Honorable Harry Low, Justice (Ret.), California Appellate Court and former California Insurance Commissioner; John McGinness, Sacramento County sheriff; Tom Rankin, California Labor Federation, AFL-CIO, president emeritus; Jan Scully, Sacramento County district attorney; David Snowden, City of Beverly Hills chief of police; and Allan Zaremberg California Chamber of Commerce president & CEO.
A copy of the report can be found at www.insurance.ca.gov
Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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Commissioner Poizner Announces Extradition of First Israeli National on State Criminal Charges
"Insurance fraud is a serious crime with serious consequences for the perpetrator and serious costs for every honest Californian," said Commissioner Poizner. "You can try to hide or escape to a foreign country, but we'll find you and bring you to justice."
The California arrest warrant for Assoulin was issued in October 2005, as a result of a Department of Insurance Fraud Division investigation of multiple fraudulent automobile insurance claims that were submitted to car rental companies and insurance companies in 2001 and 2002 by Assoulin, who acted as the ring leader, and co-conspirators. The total loss to various car rental companies and insurance companies was estimated at around $500,000. Nine defendants have since pleaded guilty to various insurance fraud related charges in connection with the case known as "Operation Park & Wreck." Three additional suspects are still fugitives, and believed to be in Israel. The case was prosecuted by the Los Angeles District Attorney's Office Auto Fraud Unit.
The federal warrant was issued in May 2005, after Assoulin skipped federal bail and fled to Israel. Assoulin was arrested by Drug Enforcement Administration DEA and Immigration and Customs Enforcement ICE agents in June 2004, for possession for sale of Ecstasy. The arrest was made in connection with "Operation Money Man" involving a group that imported Ecstasy from Europe to the Los Angeles area.
Assoulin pleaded guilty in December 2004 to possession for sale of Ecstasy, and was released on bail from federal custody to await sentencing. He learned of the insurance fraud investigation against him, and in May 2005 he fled to Israel.
The Fraud Division and the Drug Enforcement Administration submitted to Israel requests for the arrest and extradition of Assoulin through the US Department of Justice Office of International Affairs. On August 19, 2007, Israeli National Police located and arrested Assoulin in Tel Aviv, Israel, pursuant to the extradition requests.
Commissioner Poizner oversees sixteen CDI Enforcement Branch regional offices throughout the state. Close to 1900 insurance fraud-related arrests have been made by the Department of Insurance's Enforcement Branch since Commissioner Poizner took office in 2007 - more arrests than have been made during any other two year period, under any previous insurance commissioner.
Insurance Commissioner Poizner Highlights Unintended Consequences
Insurance Commissioner Steve Poizner today warned Sacramento policymakers that their proposal to eliminate the discretion that prosecutors currently have to classify dozens of crimes - including types of insurance fraud - as either a felony or a misdemeanor and instead make them all misdemeanors would have the unintended consequence of severely eroding the state's efforts to fight insurance fraud and convict criminals.
"Fighting insurance fraud is a complex and time-consuming task," said Commissioner Poizner. "Luckily, we have hundreds of the most dedicated sworn police officers at the Department of Insurance who fight insurance fraud every day. This proposal would severely limit their ability to go after career criminals, making simple and complex illegal enterprises much harder to prosecute -- and in the process let criminals off the hook."
This change in the classification of crimes will have at least three unintended consequences related to fighting insurance fraud, including:
- Search warrants can only be served in felony cases. If types of insurance fraud are deemed a misdemeanor, search warrants cannot be issued and executed.
- The statute of limitations is much shorter for misdemeanors. For a felony, the statute of limitations is at least three years from the date the crime was discovered. For a misdemeanor, the statute of limitation is one year from the date of the crime - in many cases the crime is not uncovered until years after the act occurred, rendering prosecution impossible.
There are a number of recent, high-profile cases that could not have been prosecuted under the new proposal.
On April 30, Commissioner Poizner and Orange County District Attorney Rackauckas announced arrests in connection with a $38 million workers' compensation fraud scheme - the largest in the history of the state. A husband and wife were charged with 106 felony counts including conspiracy to commit a crime, grand theft, insurance fraud, filing a false tax return, willfully failing to file or filing fraudulent tax returns, misrepresenting facts to State Compensation Insurance Fund, making fraudulent statements, making false statements to discourage an injured worker from claiming benefits, misrepresenting facts to a workers' compensation insurance company, and failing to file a return with the intent to evade tax.
On April 15, Commissioner Poizner announced the arrests of couple in a $6.3 million workers' compensation fraud scheme. Bell Building Maintenance Company allegedly purposefully misrepresented the number of employees working for the janitorial company in an effort to reduce the proper rate of workers' compensation insurance premium. The criminal investigation was launched in September of 2006 based upon a referral from State Fund. According to payroll reports allegedly submitted to State Fund by Kim, from 2000 to 2005, the only employees of the company consisted of the owner and his wife. As a result, the company was only required to pay the minimum amount of premium to receive a workers' compensation insurance policy during this period. However, the investigation revealed that, in reality, Bell Building Maintenance Company was a much larger operation that employed hundreds of janitors servicing numerous private companies and public entities in Los Angeles, Ventura, Orange, San Bernardino and Riverside counties.
Both of these cases began as premium fraud investigations. From that investigation, additional insurance fraud-related crimes were discovered through the execution of search warrants. Had the current proposal become law, these two cases may not have been discovered and prosecuted.
"The costs of insurance fraud are ultimately paid for by consumers," said Commissioner Poizner. "I hope the policymakers carefully consider the unintended consequences of this action and ultimately remove this provision from the budget proposal. California should not send criminals the message that they have a free pass for illegal activity because of the state's budget woes."
The specific code sections affected by the change are:
Penal Code Sections:
182 (a) penalty pertaining to paragraph (4): Conspiracy to defraud
489(b): General grand theft
549: False insurance claim
550 (c)(2)(A); (c)(3): False claims
666.5 (a): Theft with a felony theft prior
Insurance Code:
11880 Unlawful statements re: worker's compensation insurance policy
Vehicle Codes:
4463 (a): Forgery or use of counterfeit vehicle registration or license plates
10801: Own or operate a chop shop
10802: Alteration or counterfeiting of VIN numbers
10803 (a) and (b): Possession/sale of motor vehicles/parts with false/absent VIN number
10851 (a) and (b): Auto theft
Bounty Hunter shooting
Three bounty hunters were involved in a shooting after they tried to arrest a suspect in Sun Valley who was wanted in connection with a misdemeanor DUI arrest, police said.
The shooting occurred at 9:57 p.m. in the 8200 block of Marmay Place, said Officer Karen Rayner of the Los Angeles Police Department. She said the man was shot once in the left thigh and did not appear to be seriously wounded.
The bounty hunters, armed with guns, arrived at the home near the 5 Freeway to arrest the man. He apparently grabbed one of the guns during the scuffle, Rayner said.
"The bounty hunter had his weapon taken away, and his partner fired a least one shot at the suspect," Rayner said.
Officers were at the scene investigating. The bounty hunters and suspects were not identified.
Arrest of Banning police officer
For involvement in the fraudulent reporting of a vehicle theft and subsequent insurance claim, Travis was charged with three felonies; the other three suspects were charged with two felonies each. The San Bernardino District Attorney’s Office is prosecuting this case, which resulted from a year and a half investigation.
"Auto insurance fraud is a horrible way to avoid other financial troubles," said Commissioner Poizner. "It can result in felony charges, making what might be a tough situation only worse."
On September 8, 2008, Travis Jones reported to the Riverside Police Department that his 2005 Dodge Ram pickup truck had been stolen. Jones told police that he drove his truck to a residence in Riverside to attend a birthday party, staying at this residence until the following morning, at which time he discovered the supposed theft. On September 10, 2008, Travis filed an insurance claim with his insurer, Mercury Insurance Company (Mercury) for the loss.
During the claims process, however, Mercury found that Jones' truck had been driven into Mexico on September 7, 2008, disputing Travis Jones’ timeline and causing him to admit that his truck had not been stolen from Riverside – he withdrew his claim to Mercury. Further investigation revealed that Travis Jones wanted to buy a new Dodge Charger, but was financially obligated for the 2005 Dodge Ram pickup truck. Travis knew the insurance settlement would relieve him of this financial obligation, allowing the purchase of the new vehicle.
The investigation also disclosed that Jones planned on using alcohol consumption to account for the timeline discrepancy in the event law enforcement became involved with the insurance claim. Travis Jones allegedly conspired with Mestas, Jeffrey Jones, and Leite to corroborate his story. Mestas admitted later that the birthday party and the theft story were both fabricated. Had the fraudulent claim gone on undetected, Mercury could have been responsible for paying $15,000 to Travis Jones.
This case was part of the Inland Empire Organized Automobile Fraud Interdiction Program and was investigated by detectives from the California Highway Patrol and Department of Insurance. In addition, the investigation was assisted by Mercury’s Special Investigations Unit as well as the National Insurance Crime Bureau.
Commissioner Poizner oversees sixteen CDI Enforcement Branch regional offices throughout the state. Nearly 2,800 insurance fraud-related arrests have been made by CDI since Commissioner Poizner took office in 2007 - more arrests than have been made during any other three year period, under any previous insurance commissioner.
