Suspects accused of staging crashes in Santa Clara Co. car insurance scam
SANTA CLARA COUNTY, Calif. (KTVU) - It could be the biggest car insurance fraud scam in Santa Clara County in recent history.
More than 30 suspects allegedly staged car crashes, bilked money from insurance companies, which resulted in higher insurance premiums.
Authorities busted 33 suspects in an elaborate, complicated scam that even the deputy district attorney on the case has never seen before. The fraudulent claims cost insurance companies like Geico, Allstate and Century $500,000.
“That half a million dollars and loss from insurance fraud is passed onto the consumer,” said Santa Clara County Deputy District Attorney Charlotte Chang. “Every person who pays for an auto insurance policy, a portion of that is for fraud.”
Ten of those suspects were arraigned in South Santa Clara County following a three-year long investigation. It began in November 2012 after a CHP investigator uncovered several suspicious claims.
Authorities said the suspects would stage fake crashes all over Santa Clara County, damage their cars and then call the insurance companies with false information.
“Often the person would say they were somewhat distracted,” said Chang. “For example, it was often coffee spills. They said they spilled coffee on themselves and it caused them to hit one to two parked cars.”
The name for the operation is “Coffee Break.” Investigators aren't sure if any of the crashes happened.
“This is a huge scam and we hope these arrests deliver an effective blow to this type of insurance scam,” said Chang.
Most of the suspects are from San Jose. Some of them owned body shops getting more money from insurance companies for storing and towing the alleged damaged cars.
One of the suspects pleaded not guilty.
Each felony insurance fraud count is up five years in prison. Some of the suspects face multiple counts.