Insurance Fraud Division
Insurance fraud costs consumers an estimated $80 billion per year nationwide or about $950 per family. It’s the second-largest economic crime in America, exceeded only by tax evasion. The San Diego County District Attorney’s Insurance Fraud Division is comprised of a team of specialists who handle complex insurance fraud prosecutions from inception to sentencing, with the assistance of several task forces.
The Insurance Fraud Division was led by Division Chief David Lattuca
in 2009, and Assistant Chief Fiona Khalil.
In 2009, the division collected $4,319,438 in restitution for victims. Grand
jury indictments were obtained against 20 defendants and criminal complaints
filed against another 342. Annual grant funding awarded to the Insurance Fraud
Division for 2009 was approximately $10 million.
This division consists of six grant-funded units:
- Workers’ Compensation Fraud
- Auto Insurance Fraud
- Urban/Organized Auto Insurance Fraud
- Disability Healthcare Insurance Fraud
- Life Insurance Fraud
- The Regional Auto Theft Task Force (RATT)
Workers’ Compensation Fraud
Employers are required by law to have workers’ compensation insurance in case their employees suffer job related injuries. Some companies obtain a competitive advantage by violating these laws, undercutting legitimate businesses to a point where they can no longer fairly compete and can no longer provide well-paying jobs to San Diegans. In 2009, the DA’s Office filed 74 cases involving employers who did not pay workers compensation premiums, convicting all but one. More than $101,000 in restitution was ordered in these cases.
Premium Fraud Task Force
Premium fraud involves businesses misrepresenting their true payroll to an insurance company in order to purchase workers’ compensation insurance at less than the proper premium. These employers often also evade taxes by paying workers in cash. This cash-based payroll is known as the "underground economy." In California, the underground economy is estimated at $60 billion, with an annual tax loss of $3 billion. San Diego’s Premium Fraud Task Force helps maintain a level playing field by prosecuting businesses that commit premium fraud.
Provider Fraud Task Force
The Insurance Fraud Division also has a Medical and Legal Insurance Fraud Task Force which investigates and prosecutes medical and legal providers committing insurance fraud. The unique nature of this task force, the first-of-its kind in the nation, is that we have combined federal, state, and county agencies together into one cohesive unit.
Life and Annuity Consumer Protection Program
The Life and Annuity Protection Program investigates and prosecutes unscrupulous life insurance agents and others who seek to steal the savings of victims through power of attorney abuse, and fraudulent claims upon a legitimate policy. San Diego County was only one of four counties in the state of California to receive funding for this program.
Life insurance and annuity scams are often targeted at senior citizens. The effect is profound and life-altering since seniors do not have the time or opportunity for financial recovery. Our program is committed to working diligently to protect senior citizens and their finances from those who would do them harm.
Uninsured Employer Program
Insurance Fraud Division staff work with the California Labor Commissioner’s Office to investigate and prosecute employers without workers’ compensation insurance. Workers’ compensation provides injured workers the security of knowing they will receive compensation and medical treatment as a result of their work-related injury.
Regional Auto Theft Task Force (RATT)
RATT investigates and prosecutes professional auto thieves. RATT is a model of cooperation as peace officers from the following departments work in conjunction with one another: the District Attorney’s Office; the California Highway Patrol; San Diego Sheriff’s Department; the San Diego Probation Department; the California Department of Insurance; the National Insurance Crime Bureau and the Chula Vista, La Mesa, El Cajon, Escondido, Carlsbad, and Oceanside Police Departments.
Significant cases prosecuted by the Insurance Fraud Division
during 2009 include:
Operation Southside Blitz, an undercover operation in which detectives
purchased more than 150 stolen vehicles from car thieves who also sold
drugs and guns. The project, which began in 2007, resulted in the prosecution
of 73 defendants by the Regional Auto Theft Task Force. In 2008, 71 of
the 73 defendants were arrested and convicted. Thirty-nine of the defendants
received prison sentences, with one of the defendants being sentenced to
25 years-to-life.
In 2009, the District Attorney’s Office prosecuted the owners and three office
employees of a large roofing contractor who falsified accounting records to conceal
millions of dollars in unreported cash payments to employees. The president of
the company was sentenced to 365 days custody and ordered to pay nearly $1 million
in restitution to various insurance companies and state tax agencies.
