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Phoenix Auto Scams Come to a Screeching Halt
By Susan E. Clarke
A multimillion dollar insurance fraud ring in the Phoenix area was busted recently when 25 people were charged with various counts of conspiracy to operate a fraudulent scheme, participating in a criminal syndicate, illegally conducting a fraudulent enterprise, reckless endangerment and filing false and fraudulent insurance claims. Nineteen of the 25 people indicted were arrested in a series of raids that took place on November 16, 1994.
A ten-month investigation conducted by the Phoenix Police Department, the National Insurance Crime Bureau and the FBI resulted in search warrants being served at twenty-one locations in the Phoenix area, including six chiropractic offices and ten attorney’s offices. In related developments, ten search warrants were served in the Los Angeles area and one in Houston.
Ed Salem, an NICB agent located in the Phoenix area, said investigators are now going through hundreds of files, matching insurance carriers to accidents, looking for red flags and searching for names of additional people who may be involved. Many insurance companies assisted in the investigation, including Allstate, CNA, Farmers, GEICO, Hartford, Metropolitan, State Farm and USAA.
Among the Phoenix area locations searched were the Dobson Medical Group in Chandler, Arizona, and the Desert Oasis Chiropractic office in Mesa. Authorities arrested Muhammed Sonday,D.C., his wife I laliina and liner other family members at Desert Oasis Chiropractic. Others arrested in connection with this case were: Nasim Ahmed, Alexander Borshch, Carmen Calderon, Anatoly Friedman, Leon Gelfand, Eliozar Gutgarts, Laurie Martinez, Alireza Nezam, Adia Nikravesh, Yelena Pyatigorsky, Tuhin Rahman, and Steven Sanders.
The usual scheme involved accidents set up by a capper and placed “victims” in both cars. In some cases, however, unsuspecting drivers were targeted in California style “swoop and squat” accidents. It is estimated that over 300 accidents were staged with a claim value of up to $16 million. At least 31 insurance companies are known to have been defrauded.
The investigation, dubbed “Operation Crash” by the Phoenix Police Department got off the ground in January 1994 when Detective John Vasquez was tipped off to an auto scam ring working in the area. He gained the confidence of several members of the organization and soon found himself working as a capper, recruiting people to stage auto accidents. From this position he “hired” several other undercover detectives from the Phoenix Police Department.
Eventually, the police crossed paths with the Phoenix office of the FBI, which had been investigating the same operation on a tip from its Los Angeles office.
Investigators found the organization was made up of foreign nationals from several different countries, each nationality apparently with its own job. The accident victims were generally Hisp’nic, from Mexico or Central America. They were recruited by Bangladeshis who acted as cappers, hiring the victims and then referring them to chiropractors and attorneys. Iranians ran the chiropractic and law offices. And at the top of the organization were a group of Russians.
According to Lynn Hunt, Supervising Special Agent of the Phoenix FBI office, many of the scam artists involved in the Phoenix schemes did not reside in the area. They would come in from other states, stage the accidents and then return home. In fact, she indicated, the FBI first became involved in this particular case because there was evidence of interstate criminal activity.
Hunt said this type of staged accident scam, so familiar to investigators in many large cities, has virtually exploded in the Phoenix area in the last two years. It has been suggested that the success of the California Department of Insurance in fighting staged auto rings has caused many would-be fraud artists to move to greener pastures. Phoenix is a likely target since it has many of the desirable characteristics for these scams, including a large transitory population, lots of traffic and an abundance of doctors and attorneys.
Hunt praised the efforts of all of the investigators involved, especially the Phoenix Police Department and the NICE. She is anxious to get the word out to all prospective fraud artists that they are not welcome in the Phoenix area.
Another hotbed of criminal activity in Maricopa County was halted when police put a crimp in the phony auto registration trade. On December 21, 1994, Diana Thompson, an auto licensing clerk, was arrested along with two associates who allegedly paid her to obtain fraudulent registration documents. Thompson, who had been employed at her clerical job for about two years, is suspected of issuing the phony documents for as many as three cars per day for the last year. Police say she could have registered up to 600 vehicles over the course of the year.
Maricopa County issues about 500,000 titles per year and officials believe the majority of the 225 auto registration clerks in the I I auto-license offices in Maricopa County arc honest. However, since crooks eagerly seek out clerks who will issue fraudulent docu ments, this case has triggered an informal audit. It is suspected that there may be some others like Thompson.
Thompson’s associates in the scheme, Michael Jimenez and his wife Analisa Jimenez, let it be known on the street that they could help people who were unable to register vehicles legally. These drivers, who may have had DUI problems or may have been trying to register a stolen vehicle, would pay the Jimenezes $150 plus the normal vehicle registration fee. Jimenez would then give the paperwork and the registration monies to Thompson – who would then issue the legal registration documents.
Police in the Phoenix area, who investigate approximately 25,000 stolen vehicles per year, knew something was wrong when they began to recover stolen vehicles with legitimate registrations. The police put it all together when they arrested two people suspected of auto theft. The suspects told officers about the Jimenezes.
Once the police knew about the Jimenezes, they followed the trail to Thompson. Investigators obtained permission to set up a surveillance camera after Thompson’s supervisors did a review of her work and found some major discrepancies. The camera showed Thompson systematically working from a list to produce registrations and titles, even when no one was at her window.
The Jimenezes have been charged will) par= ticipating in a criminal syndicate, part it~il^;Iting in fraudulent schemes and forgery. Thompson has been charged with the same above three charges plus an additional charge of tampering with public documents.
© 1995 John Cooke Fraud Repor