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By Susan Clarke
“Once upon a time, there were two brothers, three 1967 Corvette convertibles, three phony insurance claims and five phony registrations.”
Unfortunately, what follows is not a fairy tale, but the details of an actual investigation and prosecution. At the request of the investigators and the District Attorney in charge of the case, the names of the brothers and the title service were changed or deleted to protect the integrity of the ongoing case. We encourage those readers with a valid reason to need additional information to contact the investigators.
In the San Fernando Valley, outside of Los Angeles, is a little-known unit of the Van Nuys Police Department, the Consolidated Effort to Combat Auto Theft (CECAT). This unit concentrates on auto thefts, VIN switchers, and organized auto theft rings. Recently, “The John Cooke Fraud Report” met with several CECAT investigators to discuss one of the unit’s more interesting cases, one exclusively involving 1967 Corvette convertibles.
Greg Hutchinson is the National Insurance Crime Bureau agent assigned to CECAT to assist with investigation of those thefts suspected of involving insurance fraud.
The case of the Corvette convertibles came to light when a vehicle registered in California was reported stolen in Nevada. The owner subsequently collected $29,000 from Farmers Insurance.
The active investigation began when the Las Vegas Police Department reported the theft to the California Department of Motor Vehicles. The DMV then discovered that there were, in fact, two vehicles registered in California under the same vehicle identification number, one in Northern California and the other, the car that was reported stolen in Las Vegas.
Hutchinson ran a title history on the vehicle in question and discovered the car had come into California through Alabama, a non-title state which will issue a vehicle registration without proof of title. Suspecting a “paper car,” Hutchinson’s next step was to run the owner’s name through the NICB database. This revealed that not only had John Claimant reported a vehicle theft, but his brother, Sam Claimant, had reported two vehicle thefts. One occurred prior to the theft in question and one followed it. Coincidentally, all of the reported thefts involved black over red, 1967 Corvette convertibles.
With the help of the title service that had issued the Alabama registration, Hutchinson learned that John and Sam Claimant had paid $275 for each of five Alabama registrations for five different VINs, all for 1967 Corvette convertibles. The car reported stolen in Las Vegas had used one of the five Alabama VINs. The other four were unaccounted for.
Using the NICB and state databases, CECAT located the “stolen” Corvette in Los Angeles, already registered under another of the Alabama numbers. The title history indicated that the car had come from Alabama and that the previous owner was John Claimant. CECAT determined that the car had previously been purchased by John’s brother, Sam Claimant. Sam reported the car stolen to State Farm Insurance and collected $26,000. He then switched the VIN to a fake number – one of the five obtained in Alabama – and John Claimant registered the car in his own name. John reported the car stolen and collected $29,000 from Farmer’s Insurance. The VIN was then switched a second time, and the car was sold to an innocent purchaser for $17,500. CECAT had now accounted for two of the five Alabama numbers.
A car in Sherman Oaks with a VIN matching one of the remaining three Alabama numbers was determined to be a true car. But one found in Ohio was inspected and found to have been VIN switched. The title history of the Ohio car showed it had previously been owned by Sam Claimant, and, to no one’s surprise, it was previously registered in Alabama. In truth, the car had been leased by Sam Claimant and reported stolen. The insurance company, 20th Century, had paid a total of $43,000 to Sam and the leasing company. Sam had then switched the VIN plate and sold the car in Florida. After several owners, the car reached Ohio where it was sold to the innocent purchaser for $42,000.
About this time, John Claimant was arrested in Van Nuys. During a search of his house, officers found a photograph of Sam Claimant. In the picture, Sam was dressed in a police recruit uniform from Gainesville, Florida. CECAT contacted the Gainesville Police Department and was told Sam was an applicant. He had gone through the police academy and was constantly pestering the department to hire him. The Gainesville Police Department assured CECAT they would cooperate if a warrant was obtained for Sam’s arrest.
Once the warrant was issued, the Gainesville police called Sam Claimant and told him they were ready to hire him. Sam, thinking his day had finally come, rushed to the department to pick up his badge and his gun. He thought the handcuffs that were placed on him when he arrived were only part of his initiation into the department. It took him about twenty minutes to realize that this was no joke.
A search of Sam’s apartment revealed that he had leased a third 1967 Corvette convertible and had already registered and insured it twice, once under the true VIN and once under one of the Alabama VINs. The car, which was parked in front of the apartment, had a third VIN plate in place and was already registered. It appeared from the evidence that Sam was preparing to submit two phony claims and then sell the car under the last Alabama number.
All told, Sam and John Claimant collected approximately $100,000 in insurance payoffs and nearly $50,000 from the sale of the first two vehicles. The timely arrest of Sam probably saved the two new Florida insurance companies another $30,000 each.
The case, which is being handled by Mitch Harris of the Van Nuys District Attorney’s office, is currently in the preliminary stage. At this writing, the preliminary hearing is set for October 20, 1994. John Claimant has been charged with one count of insurance fraud and one count of grand theft. Sam Claimant has been charged with seven counts, with the enhancement of excessive taking, a non-probational offense. In the opinion of the CECAT investigators, this case may not proceed to trial because of the overwhelming evidence (including the identification of Sam Claimant by both of the innocent purchasers). Instead, the plaintiff attorneys may be eager to reach plea bargains on behalf of the sibling clients.
The history of the brothers’ exploits shows that, in some ways, they got smarter as they continued to work their scheme. On the first claim, Sam purchased the vehicle and insured it with State Farm. When it came time for the payoff, there was some question as to the value of the car. To avoid this problem, after the VIN was switched, the Claimant brothers purchased a stated value policy with Farmers Insurance. When John reported the car stolen, there was no bickering about the value.
With the second vehicle, Sam got even smarter. He didn’t bother to pay the full price of the car up front; he simply leased the car for a few thousand dollars down. When the car was reported stolen, the lease company was paid $37,000 and Sam received a payment of approximately $6,000 due to increased value. He was then able to switch the VIN plate and sell the car to another innocent purchaser for $27,000. Net profit on the second vehicle? About $30,000 in just a few months.
Additionally, the Claimant brothers knew enough to convince insurers that the cars in question were highly valuable. They obtained appraisals indicating that the Corvettes had matching numbers on the engine and transmission, that they had the most valuable optional equipment and the most powerful engines. And they always took the cars to different DMV offices for the registration so that they would not risk running into the same inspectors.
But in other ways the two brothers were less than intelligent. For example, the Farmers Agent who sold John’s policy noted that Sam Claimant had specifically questioned whether the car was covered. When the agent said it was covered, Sam asked, “Well, if I go to Las Vegas this weekend and the car is stolen, it’s covered, right?” The agent suspected there was something fishy when it was reported stolen the next Monday but he was unable to prove any wrongdoing.
Whether it was arrogance or stupidity, the brothers never bothered to use aliases or to change their appearances when they bought, leased, registered, insured or sold the cars. Everything was done under their actual identities. In fact, both of the innocent purchasers, who bought the VIN-switched cars from Sam, picked him out of lineups as the person who sold the vehicle.
It was the little details that helped to trip up the brothers.
The investigation began because of a simple piece of bad luck. Of the five registrations the Claimant brothers obtained from Alabama, the one they used for John’s scam matched a VIN on a car that was already registered in California. Although CECAT has checked all available databases, they have been unable to locate any more cars with VINs matching the Alabama numbers purchased by the brothers. It is unknown what happened to the other three real cars. Had the brothers chosen one of those three numbers to register John’s car, they might not have been caught. If they had registered that particular VIN in another state, there would have been no match in the DMV computer.
Another detail that assisted in the investigation was the existence of a DMV inspector’s notation that the car he was inspecting was currently red but had originally been blue. Once the car was located, its true identity was verified by a description of custom equipment and a spot of blue paint on the door hinge.
Along with the luck was simple hard work by the officers of CECAT and NICB’s Hutchinson. He, Detective Mike Lewin and Officer John Motto were able to follow the paper trail, working backwards until they could put the case together. According to Hutchinson, all of the agencies involved – the Gainesville Police Department, the Ohio State Highway Patrol and the Alabama title service – were very cooperative during this six-week investigation.
One of the problem areas pointed out by this case is the availability of services such as the one used in Alabama. Although the title service is a legitimate business which advises applicants it will actively participate in the prosecution of those who engage in fraudulent registration of vehicles, some scammers apparently are not deterred by such warnings.
The CECAT investigators suggested several ways insurance carriers can fight back against scams such as these:
* THOROUGH DOCUMENTATION BY THE DMV INSPECTOR AND THE INSURANCE
COMPANY IS ESSENTIAL. The case against the Claimant brothers was aided by the notes of the DMV inspector who indicated the car had previously been blue and by the notes of the Farmers agent indicating the brothers had asked about the possibility of theft immediately after the policy was issued.
* ANY TIME A CLASSIC COLLECTOR CAR – SUCH AS THESE CORVETTES – IS INSURED, THE CARRIER SHOULD REQUIRE A VERIFIED APPRAISAL FROM A REPUTABLE APPRAISER. Although the Claimant brothers submitted appraisals for the vehicles they insured, these were performed by “fly-by-night” appraisers. None of the appraisers in question can be located and they may exist only on paper.
* NICB MEMBER COMPANIES MUST MAKE SURE ALL NECESSARY INFORMATION IS REPORTED TO NICB TO ASSURE THE DATABASE IS COMPLETE. Not only vehicle thefts, but recoveries and salvages need to be reported.
* NON-TITLE STATES SUCH AS ALABAMA EXIST. ANY TIME A CLAIMS
PROFESSIONAL IS FACED WITH A QUESTIONABLE LOSS OR WHAT MAY BE A “PAPER CAR,” HE OR SHE SHOULD CHECK THE TITLE HISTORY VERY
CAREFULLY. If the car was previously registered in one of the non-title states – especially if the registration in question was fairly recent in the title history – it would be advisable to check carefully to see if the car is legitimate.
Our thanks to the CECAT team, especially NICB agent Greg Hutchinson, Detective Mike Lewin and Officer John Motto, for their help in the preparation of this article.
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