Nine people were charged in a fraud ring out of San Jose that collected more than $140,000 in insurance for phony accidents involving older-model luxury cars, the Santa Clara County District Attorney’s Office said Wednesday.
Juan Ortiz Velazquez and his common-law wife Deisy Ramirez Robles, both 27, along with seven other people face felony charges in the case, district attorney’s officials said.
They allegedly filed 20 fraudulent claims between 2011 and 2015, prosecutors said.
Velazquez, who owns Carlos Body Shop, has been charged with 26 counts and could spend up to 31 years in prison if convicted, according to prosecutors.
Robles was charged with 14 fraud counts and faces up to 19 years in prison if convicted, prosecutors said.
Investigators at the Silicon Valley Auto Insurance Fraud Task Force dubbed the operation “Kings Row,” which is the street in North San Jose where Velazquez, Robles and two other body shop owners operated their businesses, prosecutors said.
Deputy District Attorney Charlotte Chang said in a statement:
“The defendants may have been fraudulently damaging their own cars, but all of us in California that have car insurance are damaged through rising rates caused by the millions of dollars lost to insurance fraud,”
In most of the cases, the defendants purchased insurance policies on cars and falsely stated the vehicles were involved in accidents just days after they were purchased, prosecutors said.
In one case, Velazquez allegedly used an insurance policy for three separate fake accidents on three different cars and the payout checks were traced to Robles, prosecutors said.
The fake accidents ranged from hit-and-run to crashes on state Highway 17, according to prosecutors.
The vehicles were usually luxury brands such as Mercedes-Benz, BMW, Jaguar and Maserati, prosecutors said.
The claims filed in the accidents were made by the defendants, who were either relatives or close acquaintances of one another, and led back to the same Kings Row auto body shops, according to prosecutors.
The defendants will be arraigned at the South County Courthouse in Morgan Hill, with some scheduled to appear on May 10, according to prosecutors.
Eight of the defendants are in custody in Santa Clara County Main Jail while authorities are still looking for the ninth suspect, according to the state Department of Insurance.
state Insurance Commissioner Dave Jones said in a statement:
“California is ground zero for staged auto collisions. … Organized crime rings are responsible for the majority of staged collisions, which are costly to insurers and consumers.”
The other seven defendants in custody are 46-year-old Jose Caro Curiel of Santa Clara; 27-year-old Melissa Duarte of Hollister; 45-year-old Filomena Arreguin Lucatero of Milpitas; 39-year-old Angel Resendiz of Gilroy, 40-year-old Manuel Resendiz of Gilroy; and 25-year-old Lorenzo Robles Ramirez of San Jose.
The investigation began in 2012 with a tip from one of the insurance victimized in the case, state insurance officials said.
While arresting the suspects, detectives learned Lucatero, owner of Filo’s Auto Body, was involved in the alleged scheme, according to state insurance officials.
Velazquez and Lucatero allegedly didn’t follow through with the work ordered on the damage estimate, state insurance officials said.
Velazquez allegedly paid each of his associates $500 in exchange for their permission to damage the vehicles, send the fake claims and collect money from the insurance companies, state insurance officials said.
The companies impacted by the alleged fraud were Farmers Insurance, Progressive, Permanent General Assurance Corporation and Nations General Motors Acceptance Corporation, now known as Ally Financial, according to state insurance officials.