According to KFI radio illegal immigrants were recruited in the fraud scheme.

www.latimes.com

Lawyer Among Those Arrested for Bogus Auto Insurance Claims
By Amanda Covarrubias
Times Staff Writer

11:51 AM PST, November 23, 2005

A lawyer who allegedly headed a fraud ring that staged automobile crashes and took as much as $3 million in payments from insurers for bogus claims has been arrested, along with 22 others, officials announced this morning.

Insurance Commissioner John Garamendi said Huntington Park lawyer Bernard Laufer, 52, was taken into custody Tuesday morning at his office by California Department of Insurance Fraud investigators.

Although no one was seriously injured in the scheme, one victim was forced to close his business after his truck was totaled in a collision.

"Everybody who purchases auto insurance is paying for the fraudulent costs," said Garamendi at a news conference in City of Commerce. He estimated that 25% of all insurance costs go to fraud.

The defendants face charges of insurance fraud. Drivers could be charged with assault with a deadly weapon, according to officials.

The ring focused on SUVs and commercial trucks. Two cars driven by suspects would typically box in a victim's car on a Southern California freeway, causing a collision.

According to the department, investigators received a tip in April that Humberto Carlon, 22, of La Verne, was allegedly recruiting people to participate in staged collisions. Carlon is now serving a two-year state prison sentence.

Investigators then identified Laufer, who allegedly purchased the cases from Carlon and filed the fraudulent insurance claims against the victims' insurance companies.

"Many of the suspects Carlon recruited included friends and family, who would then allegedly recruit additional suspects and bring them to Carlon," according to a written statement by the department. "Several suspects were enticed to join the ring at a church bible study group," in the Inland Empire.

Other suspects arrested in connection with the case include: Ontario residents Daniel Hernandez, 26, Karinna Valenzuela, 22, Martha Deniz, 19, Veronica Santillan, 26, and Carlos Meza, 34; Chino residents Sonia Alburto Alvarez, 35, Alberto Espinoza, 29, Jorge Covarrubias Jimenez, 31, Angelina Alverez, 56, Jorge Jimenez, 31, Cesar Salas, 29, and Sofia Hernandez, 34; Riverside residents Juan Cervantex, 24, Maria Gonzalez, 23, Ernesto Navarro, 18, and Armando Gonzalez, 22; South Gate residents Luis Alberto Lopez, 25, and Fernando Ramirez, 30; Lakewood resident Lorena Campos, 21, Bell Gardens resident Bertha Villa, 55, and Pomona resident Veronica Contreras, 26.

"It is reprehensible to put people's lives at danger in the greedy pursuit of cash," said Garamendi. "Let this be a lesson today: if you commit a scam we will pursue you, catch you, and prosecute you to the fullest extent of the law."