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Fraudsters flip lemons for insurance payout

Posted On: Jun. 24, 2019 9:28 AM CST

Driving a lemon

Call it creative car flipping.

Four men were arrested last week after detectives with the California Department of Insurance uncovered their alleged get-rich-quick scheme: buy banged-up or totaled cars, get insurance, stage accidents, collect cash.

The fraud ring allegedly collected $22,000 by the filing false insurance claims, the Sacramento Bee reported Sunday.

The ring consisted of owners and associates of several auto sales companies in the Sacramento area who allegedly purchased the vehicles from auctions and staged collisions, thefts, and other incidents to collect fraudulent insurance payments, according to the newspaper.

In one instance a suspect claimed that his 2015 Dodge was stolen and found burned. He reported the staged theft to his insurer, claiming that he bought the vehicle for $12,000 from his own auto dealership. Meanwhile, an investigation revealed the car was bought at an auto action and was already totaled, according to the newspaper.

In a similar instance, a suspect purchased a 2007 BMW with mechanical problems at an auto action. On that same day, he reported a lone vehicle collision to his insurance carrier and collected $9,295, the newspaper reported.