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An undercover insurance fraud sting at auto body shops resulted in the arrests of 32 people last week, including 11 shop owners in Sacramento, Yolo and San Joaquin counties.
Two prominent Sacramento County shops were involved: Senator Ford in the Florin area and Gamboa''s Body & Frame in Rancho Cordova. Arrest warrants were issued for 43 people at 39 body shops ranging from small independent businesses to large dealerships, all accused of conspiring to commit insurance fraud.
The sting, called Operation FX, is part of a continuing effort throughout California to crack down on insurance fraud. Similar busts have already occurred in San Francisco, Santa Clara and Monterey counties. The goal of these stings is to discourage other body shops from committing insurance fraud, to "dampen the enthusiasm" as Insurance Commissioner John Garamendi put it.
For a six month period, investigators posed as insurance policyholders and asked body shops to provide documents to support fraudulent insurance claims. Visits were made to about 460 shops, an "extraordinarily large" percentage of the total in the three counties, according to Garamendi.
The "customer" would ask the body shop to do such things as falsify a document that his car had been vandalized with a key, requiring a new paint job. Owners and/or employees at 39 (14%) of these shops supplied a total of about $137,351 in fraudulent repair estimates. Three insurance companies assisted with the investigation: Progressive Insurance provided the vehicles, while USAA supplied insurance policies.
Insurance fraud is punishable by up to five years in prison and $50,000 in fines. Bail is set to range from $5,000 to $10,000.
In addition to the charges of insurance fraud, fifteen of the shops were cited and ordered to suspend operations because they allegedly lacked worker''s compensation insurance. Local district attorneys'' offices may decide to press misdemeanor charges against shops that did not provide the coverage.
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